Toyota plans exclusive sales network for Lexus

Toyota, the world's largest car manufacturer, is setting up a separate sales network to sell its Lexus range of luxury vehicles in India.

The Japanese car maker is learnt to have identified dealers in the national capital region and Bengaluru to set up independent Lexus sales outlets. A person familiar with the developments said only existing Toyota dealers are eligible for Lexus dealerships. Last year, the country's largest car maker Maruti Suzuki had set up a separate sales network called Nexa to sell premium cars. Only existing Maruti dealers were allowed to set up such outlets.

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"At the moment, we are only studying and looking at the feasibility of introducing Lexus in India. We cannot set a definite timeline to it, but we are eager to bring Lexus to India," a Toyota spokesperson said in response to e-mailed query.

GEARING UP

• Toyota had considered bringing Lexus to India in the past
• In 2012, it was exploring options to launch Lexus here, but it was dropped due to the sluggish market
• Toyota has not launched any new product for about a year now

It is critical for Toyota to set up a distinct sales network for Lexus since positioning of these cars and the target buyers are quite different from buyers of existing Toyota models such as Etios and Etios Liva.

Sources say the company will bring Lexus cars from Japan as completely knocked down (CKD) units to be assembled in India. By doing it, the company can avoid the 100 per cent basic customs duty that a completely-built unit attracts. CKD units attract an import duty ranging from 10 to 30 per cent. While Lexus prices for Indian market will be known once the vehicles are launched, industry experts said the range could begin around Rs 30 lakh.

Toyota had considered bringing Lexus to India in the past. In 2012, the company was exploring options to launch Lexus here, but it was dropped due to the sluggish automobile market. Lexus is sold in major markets outside India by Toyota.

The Indian luxury car market has seen impressive growth in recent years. In 2015, top player Mercedes-Benz recorded its best ever sales of 13,502 units, growing 32 per cent over 2014. The Indian luxury car market, with vehicles priced upwards of Rs 20 lakh, is estimated at about 3,000 units a month. Other than Mercedes, leading players in this segment include Audi, BMW, Jaguar Land Rover and Volvo.

Toyota, the sixth largest player in the domestic passenger vehicle market, has not launched any new product for about a year now. Its sales in the April-March period declined 5.6 per cent to 120,857 units. The company has been severely impacted by the Supreme Court ban on diesel vehicles with an engine capacity of 2,000cc and above in the national capital region. Sales of its popular models Innova and Fortuner have declined.