Home / Auto News / Lexus to continue niche play in hybrids, small format showrooms
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NEW DELHI : Lexus, the luxury car brand owned by Toyota Motor Corp., will keep its focus on self-charging electric hybrids in India, despite a strong regulatory push towards battery-electric vehicles that has led its rivals to launch battery-electric vehicles.

Self-charging hybrids currently comprise 97% of the brand’s sales in India. Lexus is the only luxury carmaker in India to offer a self-charging hybrid vehicle. Others such as Audi, BMW, Mercedes-Benz and Jaguar Land Rover sell cars with petrol and diesel engine options, as well as few electric vehicle (EV) models.

“We confidently present our strongest electric hybrids in India because we want to offer our customers an experience of sustainable mobility. Hybrids reduce fuel consumption and emissions as the vehicles runs as an EV most of the time, but at the same time, it takes away the range anxiety and time that a customer would have to spend charging the car," Naveen Soni, president, Lexus India said in an interview.

“At the current level, we are putting our weight behind self-charging hybrids because this is the best fit for this market. We are doing customer clinics, testing to understand the range and performance expectations from EVs," he added.

Lexus has committed to turning all-electric at a global level by 2035.

The company currently sells six models, including sedans and SUVs, in India, out of which five are imported as fully built-up units while the Lexus ES sedan is assembled at Toyota Kirloskar Motor’s factory at Bidadi in Karnataka. It expects to launch the LX sport-utility vehicle by the end of the year.

Lexus’ sales in India currently lean more towards sedans than SUVs, but Soni expects the mix to change in favour of SUVs as a newer set of buyers enter the luxury car market and in line with the overall trend in India’s automobile market.

“More and more upgraders (from mass market cars) are likely to come into the market as the Indian economy grows, and it is natural that they will prefer the SUV form factor as that is what they’ve been seeing around them.

The Indian road conditions have also been leading to growth in this segment far outstripping global rates," he said.

Meanwhile, Lexus is also opening small format experience centres in select cities to grow its physical footprint in the country.

The strategy is distinctly opposite to large storefronts that luxury car makers typically have.

“Retail of the future will see customers strongly favour experiences at their doorstep - they want to experience the brand in person, but they are very well connected online and have already made their purchase decision before they walk into the dealership. Why have large format stores then which could later on put pressure on dealer viability," Soni explained, adding that Lexus’ so-called ‘experience centres’ now cover close to 60% of the Indian market.

The company is also opening more service points in major markets, in addition to metros, to cater to a wider customer base.

“We want customers to experience the hospitality that Lexus is known for. From a business perspective too, it makes much more sense to have smaller format showrooms and occupy much larger workshop areas," Soni said.

Luxury cars currently comprise just about 1% of India’s total passenger vehicle sales of over 3 million units a year.

“This market should grow to 4%-5% of the passenger vehicle market as the number of high-net worth individuals (HNIs) and ultra high-net worth individuals grows fast in India," Soni said.

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