Yoshihiro Sawa, president of Lexus International
Luxury car maker Lexus, part of Japanese auto major Toyota, has announced its entry into the crowded Indian market dominated by the German trio — Mercedes, Audi and BMW. The company will take baby steps to grow volumes. It is starting with four dealerships. Lexus unveiled five vehicles (imported), mostly hybrids, priced up to Rs 1.09 crore. Yoshihiro Sawa, president of Lexus International, told Ajay Modi in an interaction that Lexus would not run after volumes. Edited excerpts:
In India, just one per cent of the car market forms the luxury segment. How do you view the opportunities here?
The luxury car market in India is growing rapidly though by way of volumes it is not big. But environmental requirements are getting severe. Based on Toyota’s performance, a Camry or Corolla or Innova user may look for some environmentally benign solution. Lexus is one such solution. Therefore, this market has potential and we believe it will continue to grow.
Almost every global luxury brand is present in India. Where do you position Lexus?
Lexus is a young brand of 28 years. European luxury car makers, especially Mercedes, have a much longer history. So, our brand is a baby. Entering the domain of German luxury companies is very challenging. We have had success in markets like the US when we entered. Lexus was thought to be a boring brand. But five years ago we made it more aggressive and different from the European brands. We have brought more style, and are doing a lot of lifestyle events, social media activities and tie-ups with movies. We have introduced yachts and have many activities with superior products. Such a combination is new for the luxury market. We have rebuilt platforms and Lexus’ running performance is also strong. So, now we have unique features and activities. That is our strategy. We hope to appeal to many fresh customers who see that we are different from others. We don’t pursue sales. We need to be unique and build the brand. Eventually, our share can gradually grow. It is a very challenging direction but we have chosen it.
What kind of synergies you draw from Toyota?
Some people think that Lexus is an expensive version of Toyota. However, we are developing vehicle-sharing components with Toyota but the design and testing are different. So, we believe our product is different from those of Toyota. Some customers realise that we are different, some do not. Toyota has quality, durability and reliability. By utilising the superior quality of Toyota, we can put additional value and performance. The branding activity also has to be different
SUVs drive lots of sales in the luxury segment now. How do you see this trend?
Globally the SUV market is becoming bigger. It started in Japan, the US and Europe. Every country is now seeing this. Still in markets like China and India, the sedan remains strong. In India, the sedan looks a luxury product but the lifestyle requires SUVs. The sedan won’t die. But this growth trend for SUVs will continue.
In India, luxury also attracts negative attention. There was a ban on 2,000cc diesel vehicles in the capital region a year ago. Does it concern you?
Diesel is more suitable for some products. In some cases, it is not. We are considering diesel for very specific products. For others, we will use hybrid technology. Pollution in Delhi is a serious issue and hybrids can contribute to keeping the environment clean.