Banking on steep import duties levied by the Indian government on Completely Built Units (CBUs) in Union Budget last year, Toyota India has shelved the plans to introduce Lexus brand in 2013. The parent company has officially announced the statement that the luxurious premium brand will not be entering to India any time soon.
Speaking on the same lines, the Managing Director of Toyota Kirloskar Motors, Sandeep Singh said, “It will not be in 2013. The steep import duty 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. The fall in rupee has also emerged as a major challenge, and just does not make it right to import the cars.”
The company earlier decided to launch the luxury brand in Indian auto industry, considering the penchant of buyers here. However, with the steep increase in import duty on CBUs, the Indian government has made the deal unfeasible for Toyota. He further added, “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.”
Another key factor which gave a cold fleet to the Toyota officials was the sharp depreciation in the value of rupee against strong US dollar. He said, “The fall in rupee has also emerged as a major challenge, and just does not make it right to import the cars.”
The plans to introduce Lexus in India were declared by a senior company official at the sidelines of Tokyo Motor Show in late 2011. The auto maker then decided to establish separate dealerships for the brand, similar to the trend followed by the parent company in several markets where they both are retailed.
The initial success of major luxury brands like BMW, Mercedes-Benz and Audi might have prompted the Japanese auto maker to concentrate over the luxury car segment of the Indian auto industry. However, most of them are now witnessing a tough time. Mercedes-Benz recorded fall in its 2012 sales for the first time since its foray in the Indian market in 2009, which seems a negative sign for any luxury car maker to trade here as of now.
