Lexus, Japanese automaker Toyota’s luxury car brand, has been upping its ante in the Indian market with new launches, network expansion and a host of customer-centric programmes with an objective to position itself as a niche brand. The company has opened its new and opulent Guest Experience Centre (GEC) in Chennai, the 6th GEC for Lexus in India as part of its network expansion. Naveen Soni, President, Lexus India spoke to BusinessLine about the revival in the luxury car market, Lexus’ brand positioning and growth plans. Excerpts: 

How has the response been to your recently introduced luxury SUV NX350h? 

NX350h is a full model upgrade as compared to the previous variant. Honestly, customer response has been beyond our expectations. We announced bookings for the new vehicle somewhere in January 2022 and announced the price of the vehicle on March 9 (priced between ₹64.90 lakh and ₹71.60 lakh-ex-showroom). Even before knowing the price, customers expressed faith in the brand. The waiting period however, exceeds six months which leaves us in a very uncomfortable situation. A long waiting period means the customer has choices, but they still preferred to wait for the delivery. This places pressure on us to serve them quickly. Unfortunately, on the supply side, there are issues including semiconductor shortages. We would like to request our head office now to prioritise and give us more allocation to reduce the waiting period.

How do you see the demand revival in the luxury car market in the post-Covid phase? 

The luxury car market is bouncing back after two years. From 2018 to 2020, the market shrank by half. But from 2020 to 2022, it will almost double. In numbers, it went down from about 40,000 units a year to sub-20,000 units during the peak of the pandemic. But in 2021, it increased to 27,000-28,000. This year, we hope it will touch somewhere between 35,000-37,000 units. Of course, going by percentage of the total car industry, luxury car volumes are still at one per cent, whereas in China it is 14 per cent. Having said that, the numbers of the high-net-worth individuals (HNI) and the ultra HNIs are expected to double in future, which would mean more people will come into this market and more choices will be offered to customers. 

How is Lexus positioning itself in the Indian market which is dominated by Germans? Who will be your immediate term customers? 

In the luxury car market, each brand offers something unique or different. Lexus stands for finesse. Every element of the vehicle is well-crafted (handcrafted) and it gives the impression of meticulous effort made to improve features. We’ve been trying to improve the experience inside the vehicle. We want to be known not for selling cars, but for selling experience–product experience, dealership experience etc. We don’t want to be seen as just any other luxury car brand. We have a passion for design and a host of other things–detailing, craftsmanship, and a step-by-step improvement in experiences. 

How strong is your product portfolio now? Are you planning more launches? 

We have six products, and we are also testing our fully electric vehicle right now. One of six products is made here in Bengaluru while the rest are imported.. We offer both SUVs and sedans. The SUVs are priced from ₹65 lakh up to ₹2.5 crore (LX). In sedans, we have LS and ES ( made in India) priced between ₹59 lakh to ₹1.91 crore. There are a good number of people keen on luxury sedans, but currently more growth is seen in the SUV category. For sub-₹50 lakh category products, we will keep studying the market. Globally, HNI growth is expected at 30 per cent, but in India we are expecting 60 per cent growth. If that happens, it will make a case for considering models below the current price levels. Of course, we have this compact SUV UX, which is currently under trial. It is available in ICE, hybrid and fully-electric versions. 

What is your strategy to boost the brand’s presence in this market? 

Lexus’ approach will be a sustainable luxury, because we want to stand for something unique. From that point of view, we are planting 12 trees for every car sold. So, we have planted more than 25,000 trees near our Bengaluru factory which is helping us reduce our carbon footprint. We are also looking into various customer needs, and obviously, in the short term, we will offer products which come from overseas. Presently we are making only one product in India, and if we can find a good business case, we’d like to make more. The recently launched Lexus Life programme will further strengthen the brand’s footprint and enhance the brand experience. Among other hosts of initiatives, we are also planning ‘Lexus Drive Club’ for our passionate customers. 

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