New Delhi: Encouraged by the demand for luxury cars in India, Japanese car maker Toyota Motor Corp. is set to introduce the Lexus brand in the country in 2013, according to two people familiar with the plan.
Top officials from the company’s Indian subsidiary are in Japan for a briefing about the project. They were not available for comment. A spokeswoman couldn’t be reached on her phone.
Shekar Viswanathan, deputy managing director (commercial) at Toyota Kirloskar Motor India Pvt. Ltd, said, “We want the Lexus brand to come to India, but I cannot give you any time frame.”
According to a person directly involved in the discussions, an announcement was likely to be made in Japan on Monday. The person did not want to be named. There was no announcement at the time of going to press.
File photo of Toyota Motors workshop
The Lexus range of luxury sedans and sport utility vehicles (SUVs), which have a strong following in India, will have its own dealership network.
“We will be following the global practice as far as dealerships are concerned,” said another person familiar with the development. “The company does not want to dilute the brand quotient.”
While the Lexus models to be sold in India will be completely built-up units, it is unclear what models will be launched in the country.
Globally, the brand competes with Bayerische Motoren Werke AG (BMW), Mercedes and Audi AG.
Launched in 1989 in Japan, Lexus soon became America’s best-selling brand of luxury motor vehicles.
While the Indian luxury car market forms less than 1% of the total car market, increased income levels saw the segment growing 70% in 2010. In 2011, most luxury car makers have defied the slowdown that has hit the rest of the industry and have surpassed the previous year’s numbers.
Around 15,000 luxury cars were sold in India in 2010, and 20,000 units are expected to be sold this year.
According to BMW India president Andreas Schaaf, the Indian luxury car market is set to increase 10 times to 150,000 units by 2020.
“They will have to look at it from a long-term perspective. The sales numbers in the first year of operations may not be good, but this segment will continue to grow in future,” said Abdul Majeed, auto practice leader, PricewaterhouseCoopers, a consultancy firm. “They can’t ignore the market. It is better to come to India as soon as possible and start building the brand.”
Toyota is also considering a finance arm to boost its sales in India.
“With Toyota Financial Services coming in, the company should be able to ramp up sales of all its brands in India,” said the person quoted in the second instance.
Volkswagen AG, Mercedes-Benz India Pvt. Ltd and BMW India have finance arms, although they also have pacts with banks and other financial institutions.