Lexus begins assembly in India, prices likely to dip

Having been on the fringes in the highly competitive Indian luxury car space, Toyota Motor Corp-owned luxury car brand Lexus has an assembly line to make vehicles locally with an estimated investment of about $100 million and will compete hard with the German luxury car makers in India.

The line has already been set up in Bidadi Bengaluru and the company has begun assembly of the ES sedan and it will eventually add NX SUV to the line up, to price its product competitively in India. The company currently sells half a dozen models in India priced from Rs 58.2 lakh to Rs 2.32 crore and all of them are imported as completely-built imports, which come with a levy of over 100%, making Lexus models less competitive when compared to the overall market.

With almost all of its rivals having a local assembly line set up, the fully built imports from Lexus were putting the company at a disadvantage due to a steep imports duty. An email sent to the company by ET did not elicit any official response.

Plus the company has a limited reach with just dealerships or guest experience centres in India i.e. Mumbai, Delhi, Gurgaon and Bengaluru. The company is likely to add Chennai, Hyderabad and a couple more markets to have a bigger geographical footprint.

In a market of 35,000 units, Lexus sold about 500-600 cars in 2019 accounting for a very modest market share of 1-2%.