Lexus eschews production in China over quality concerns

Sat, 03 May 2014

One of the more popular trends in the auto industry is setting up production operations in China. Mainstream manufacturers like Ford, General Motors and Volkswagen have done it, and even luxury marques like Audi, BMW and Mercedes-Benz have or will soon have manufacturing ops in the People's Republic.

One company that isn't building cars in China, though, is Lexus. The Toyota-owned luxury brand still manufactures all of its vehicles in Japan (aside from a few RXs, which are built at a Toyota factory in Canada). According to Tokuo Fukuichi, Lexus just isn't ready to build cars there yet.

"The German Three have a brand image that they have cultivated over the past century in their long history, but Lexus is not in people's minds like that yet," Fukuichi-san told Reuters UK.

From the sounds of it, he isn't saying that the Chinese won't build the cars properly – we're assuming that if BMW and Mercedes-Benz are comfortable with Chinese quality, Lexus would be able to manage – it's that the sort of damage Lexus could potentially suffer in the Chinese market due to any potential reliability woes relating to local production are more than it could bear.

While importing vehicles into the country raises their prices considerably, it seems like Lexus is playing its cards carefully and looking at the larger picture, rather than the short-term profits it could make by building vehicles in China before its ready. Still, Lexus only sold about a fifth of what BMW did in China last year. We imagine it can only be so careful while watching the Germans gobble up market share.

What do you think? Should Lexus take the risk and join in on local production in the PRC, or is it right to carefully cultivate its image before taking the plunge with Chinese production? Have your say in Comments.

By Brandon Turkus