By Pankaj Doval, TNN
NEW DELHI – It may be the slowdown blues, or just the wrong timing. But whatever it is, Lexus — the luxury brand of Japanese auto giant Toyota — has decided to defer its India entry. Against its earlier plan to enter the Indian market by 2013, the brand has decided to put off its India debut.
Sandeep Singh, deputy MD of Toyota’s Indian subsidiary Toyota Kirloskar Motors, confirmed that the luxury brand will not be making a debut anytime soon.
“It will not be in 2013,” Singh said, blaming a variety of negative factors behind the decision. The Toyota official said that import duty on fully-built cars is very steep in India, especially after it was raised further in the Union Budget last year.
“This is a major hurdle as far as getting in Lexus is concerned as we have plans only to import the vehicles and not make them here.” A sharp depreciation of the rupee is another factor that has given cold feet to company officials. “The fall in rupee has also emerged as a major challenge, and just does not make it right to import the cars.”
The slowdown in the Indian economy and uncertainty over its turnaround timing can also be one of the reasons behind the company’s decision to go slow.
While the initial success of brands like BMW and Mercedes could have prompted Toyota to look at the Indian luxury market, the tough times they are facing now would have prompted the company to be cautious.
Mercedes saw its sales fall for the first time since 2009 last year and BMW has also been facing a big pressure in staying positive.
Toyota’s plans to get Lexus to India were announced by a senior company official on the sidelines of the Tokyo Motor Show in late 2011. The company had plans to have separate dealerships for the brand, as is the case in most markets where Toyota and Lexus are retailed.
The Lexus brand came into being in 1989 and competes with cars from BMW, Mercedes Benz and Audi, apart from other luxury brands. Lexus cars are pre-dominantly made at four plants in Japan, and also at a facility in Canada in North America.
Source: The Times of India