Japanese car maker Toyota Motor Thailand is downbeat about sales prospects of its luxury brand Lexus this year, saying the price of imported cars make them less able to compete with locally made luxury brands.
Toyota expects to sell 650 Lexus cars in 2017, a 24% drop year-on-year, said executive vice-president Vudhigorn Suriyachantananont.
“We admit the Lexus brand is at a disadvantage in the luxury car market because they are imported from Japan, so their retail prices are much higher than local luxury brands,” he said.
Cars imported from Japan are subjected to an import duty of 60% under the Japan–Thailand Economic Partnership Agreement, compared to the normal duty of 80%.
Mr Vudhigorn said Lexus also has launched fewer models in the Thai market. It introduced the Lexus RX sport utility vehicle about two years ago, while the new Lexus LS sedan was launched locally yesterday, priced from 11.5-15.8 million baht, available with either an internal combustion engine or hybrid-electric platform.
“For the new LS, we aim to sell about 30-40 cars annually,” he said.
Lexus recorded its Thai sales record in 2015, selling 834 cars, up sharply by 46% from the previous year. But sales dropped to 770 cars in 2016.
Lexus has sold 8,455 cars total in Thailand as of September this year.
Mr Vudhigorn forecast the luxury market to grow by 20% to 26,000-27,000 cars sold in 2017 after sales from January to September tallied 20,056 cars.
Two German brands — Mercedes-Benz and BMW — now control over 90% of the luxury car segment because both companies have their local assembly plants in Thailand, he said.
Third-ranked is Sweden’s Volvo, while Lexus is in the fourth spot in the Thai luxury market.
President Michinobu Sugata said Toyota does not have plans to localise Lexus’s assembly plant at Toyota’s passenger car factory in Chachoengsao, even though it would make retail prices more competitive in the Thai market.
Lexus has three showrooms and service centres in Bangkok and 10 service centres in upcountry provinces.
Toyota expects to sell 265,000 units this year, up 8% in line with the local car market, which is projected to grow by 8% to 830,000 units.
Toyota plans to export 291,000 units from its Thailand operation, down by 9% from last year mainly because of a drop in sales from the Middle East and Latin America.
On Friday, Toyota is scheduled to announce its plan to ship the Hilux Revo pickup to Japan for the first time.