[kiku007]

How should we read this?

Lexus India to close a 1/4 of its dealerships soon. Wait, that's not a quarter but it's literally one out of their four strong dealer network in India.

Lexus India - So exclusive and premium that even a Dealer couldn't afford Lexus.

Its understandable when a company stumbles in India because of lack of experience. It's just dumb of Toyota to let Lexus India in such a state.

[CrAzY dRiVeR]

Originally Posted by reignofchaos

What I find strange is when Volvo can sell its CBUs at compelling prices, why can't Lexus? What is it that is inherently different with Lexus? Seems weird to me. At current prices, Lexus offers zero value for money.

Volvo has even announced local assembly of their hybrids, starting with the XC90.

https://www.autocarindia.com/car-new...in-2019-410538

Lexus with all the backing from Toyota can't do that?

[Turbanator]

Originally Posted by R2D2

TKM doesn't shut down dealers unless they have failed to meet their standards in one way or the other.

Correct, I understand from fellow dealers that it has something to do with finances. Toyota is very serious when it comes to financials and they are right in doing so. This interview clears some doubts. If a manufacturer does not pressurize a dealer for numbers or ask a minimum sales, they have full right to ask for funds on time.

Quote -
So there is no sales pressure on dealers. Interest rate is the biggest cost pressure on dealers and to reduce that we are very clear on dealer inventory. Our inventories are always time-bound. That is where we support our dealers. Our dealer inventories are less than 15 days. We take orders from then ship parts twice a day today. We really encourage dealers to sell one buy one.

https://auto.economictimes.indiatime...rview/65242958

Originally Posted by ajmat

I think the initial High End showroom investment was over the top unless they had reasonable pricing and volumes in mind.

In the UK, the Lexus showroom was a separate section of the Toyota showroom.

They choose Oberoi for this particular reason, they got everything finished including high end furniture and leather couches from Oberoi. I am sure Lexus must be supporting on rentals. Unlike mall or standalone dealership they could invite their customers and sell the cars in a 5 Star setting at a fixed monthly charge. Porsche Gurgaon did created a similar setup on their own and we all know the mess they are into.

I agree with you on Lexus sharing space with Toyota but they have chosen a different strategy, must have been from their experiences elsewhere or just because the segment they wanted to operate. Here in Canada, Toyota dealers are actually pretty far at most locations from Toyota and Lexus dealers are not always Toyota dealers. I think they have royally messed up with the Prices even after considering 100 % duties, they could have done better and must re-look at the prices till the time they are ready with CKD.

Originally Posted by reignofchaos

What I find strange is when Volvo can sell its CBUs at compelling prices, why can't Lexus? What is it that is inherently different with Lexus? Seems weird to me. At current prices, Lexus offers zero value for money.

I have no experience with interaction with any Toyota guys but whatever I understand from the dealers, their Indian operations have very limited say on decisions of HQ. Partially due to the fact that they have not succeeded unlike others say Suzuki or to an extent Honda. And Toyota Japan is fascinated with sales in the Great American market. As mentioned elsewhere also, unlike others, Toyota gets CBU vehicles from their parent company at Market Operating prices say the price at which they will ship the same product to a different market. This is typically Retail selling price less dealer margin, Taxes and some markup for that regional unit of Toyota. So manufacturing units takes the most money which is usually parent company in Japan. Whereas others like Volvo or MB India will get the CBU at Costs and thereby save a lot on duties. They will thereafter send the profits back to their HQ. Given the size of Toyota and the market size of their CBU business in India, I think they just go by the book. As an example, even if they get Land Cruiser transfered at 50 % less costs from Japan, will they be able to increase the sales by 2-3 times? I doubt, do you see people actually lining up for a Land Cruiser at 1 crore

Originally Posted by CrAzY dRiVeR

Volvo has even announced local assembly of their hybrids, starting with the XC90.

Lexus with all the backing from Toyota can't do that?

Well, they have more than 70 % of their Second plant sitting idle for many years due to Liva twins. So, someone has to be very daring to ask for additional money and then even if they do, like Camry CKD, how many can they sell? But, Yes, since they have committed to the the market, they should do all efforts and perhaps setup CKD for ES to begin with.

[R2D2]

Originally Posted by Turbanator

Correct, I understand from fellow dealers that it has something to do with finances. Toyota is very serious when it comes to financials and they are right in doing so. This interview clears some doubts. If a manufacturer does not pressurize a dealer for numbers or ask a minimum sales, they have full right to ask for funds on time.

Makes sense if you see their experience after the demise of DSK-T in Pune. DSK -T really messed up and how! That dealership's trajectory from 2003-05 post winning global awards to the eventual crash in 2016-17 was like a shooting star that fell down from the heavens to its demise.

Thing is, TKM/Lexus will protect their reputation, commercial interests and especially in the case of Lexus their customers. In the luxury segment word-of-mouth is a very significant influencing factor. No luxury car manufacturer can afford to be dissed by Mr/Mrs/Ms Moneybags.

[gauravanekar]

Originally Posted by CrAzY dRiVeR

Volvo has even announced local assembly of their hybrids, starting with the XC90.

https://www.autocarindia.com/car-new...in-2019-410538

Lexus with all the backing from Toyota can't do that?

Toyota likes to sit on high pedestral with their claim for best quality. They don't trust Indians to assemble Lexus, how dumb / elitist is that?
We need to show japanese their place now and then just like Chinese do.

[ringoism]

Originally Posted by vinya_jag

Does this not call for a multi brand car showroom? I wonder how these single car showrooms can keep up with their operating costs. They are eventually driving the car prices higher by making such single manufacturer showroom.
The Porsche one in Bangalore, usually has one Cayenne for display, and the Lamborgini one actually has nothing for display. And once, I had seen a Jaguar make shift lounge in the UB City Mall, and a couple of cars on display.

I suppose it all depends upon how deep are the pockets (or credit) of the proprietor, because holding inventory - of one brand or many - is indeed expensive. I was shocked to see a very well-stocked Audi/BMW (bike) showroom in Kolkata a few weeks back. Probably a good twenty units there of various shapes/sizes/colors. "Deep pockets", I thought.

I haven't followed the Lexus brand in a long time, but I remember how they shook up the world way-back-when by offering similar luxury and performance as the German brands in a comparatively maintenance-free package with better pricing. That was the LS400... powerful, smooth, fast, posh and as reliable, trouble-free, easy to maintain as a Corolla: Oil, tyres, and brake pads, and you were good to go.

A friend had upwards of 350,000km's on his - at the time of second-hand purchase (!) - and he ran it many years after that. Rather, he thrashed it - young unmarried fellow back then - but no ill effects. Even with that many miles, hit 225+kmph running from the police one fine day (got away, too!)... Ah, the good old days!!!

If any of that old magic remained in current offerings, I'd have to say it's sad to see them go. The Germans need to be kicked down a couple notches once in awhile (I'm of German ancestry, so I can say that).

-Eric

[landcruiser123]

Originally Posted by GTO

As such, Lexus has to support its dealers. The business simply isn't viable otherwise.

Toyota should have given showrooms to the biggest Toyota dealers in the city with some display galleries in other places like 5 star hotels. But again, there will be customers who don't want to be in a place where people buy a 6 lakh rupee Etios.

I think Toyota misread the market.

We said that with the Yaris as well. Shows that the Indian market isn't easy for even the biggest auto maker in the world. Toyota is an undisputed king in body-on-frame diesel UVs , be it in Africa, Australia or Asia. In every other segment- there are worthy competitors/alternatives.

[VEA]

The lexus people market it saying its as cool as a the germans, but cheap to maintain like a toyota. The toyotas I own hasnt been cheap to maintain with the corolla’s aircon failing in the 4th year (after the warranty is over unfortunately) and a good 1.2 lakhs to replace it, along with many other niggles. Considering the argueable quality of the toyotas these days, over pricing, unexciting drive etc, the lexus presents no value in the indian scenario.

[V.Narayan]

Apparently the cancellation of this dealership occurred overnight, through a public notice, without discussion or a curing period for any alleged shortfalls. This was Lexus's first showroom-dealer in India the one who made their first sale. Not a good sign. As an OEM the dealer is your last mile to the customer and obliterating that link all of a sudden is not good common sense.

[nirmaljusdoit]

Having worked at Toyota i can say with certainty that this news is definitely not true. Nothing just happens overnight ! Either with Toyota or other OEM's. There are legal contracts in place and either party would have to give the other adequate notice period. Toyota does a diligent study before awarding a dealership and closure of one is definitely an exceptional event.

There must have been minor events escalating unto eventual closure.

[hema4saran]

This comes as a shock for the existing and potential customers of the brand Lexus. Not sure what went wrong here. Even though if the dealer did some unwanted stuffs, you should not pull the plug too early within couple of years. The sample size for unwanted stuffs is way too less since the number of cars sold is also less. And few of BHPians gave very positive feedback about the dealerships, especially Narayan sir, who was one of the first customers in India and in this dealership.

Everyone will agree that Lexus cars are most reliable compared to the Germans. But in India, most of the folks who can afford to pay more than 50 lakhs for car will always change the car at the end of 5 years. This is not US market where Lexus buyers will keep their cars for life.

Your LS and LX are way more over priced than their contemporaries even after adding the car price and setting aside good chunk of money for periodic/unexpected maintenance for initial 5 years. Most of the folks would have given a thought if LS and LX were priced close to S Class and GLS.

[Dhruv29]

As you all know that, we had purchased our ES300h from Lexus Gurgaon (M/s Cosmic Motors Pvt Ltd) in the beginning of January, 2019 on the pretext that the ownership of the vehicle will be transferred to our company's name within a week of purchase. (this being a dealership demo car)
But still as of today, I've been given false promises week after week about the ownership transfer and its status. And to make matters worse, the car is hypotheticated by Toyota Kirloskar to Cosmic motors. I've made complete payment which was negotiated at the time of purchase but god knows if they've made the payment to Toyota Kirloskar.
By contacting Lexus India Senior executives, i got to know that they will only be able to limited help because initially the car was in the name of Cosmic Motors but still they are trying their level best to sort the problem out.
It's just turning like another Audi Gurgaon incident. Lexus Gurgaon and Grace Toyota (Prominent Dealership of Toyota) has shut shop. The MD, CEO of Cosmic Motors are not answering my calls. And even if they do sometimes, i get a fake assurance that paperwork is ready, and will just take a week more.
During recent chain of events which happened this week, after meeting the MD of Cosmic Motors, he assured that all the payments regarding your car and other demo cars has been made to Toyota Kirloskar, and the delay is on their part. And also he owns several big businesses and plans to migrate from Automotive sector to different sector.
After this i contacted Lexus India Customer head and told him about my conversation, and i got to know that issue is on the payment and they are investigating further as well as pressuring Cosmic Motors for payment of my car.
I believe Lexus India over here. I'll go ahead and file an FIR.

[Turbanator]

Originally Posted by Dhruv29

I believe Lexus India over here. I'll go ahead and file an FIR.

I have a feeling that Lexus India might have refused clearance of your car's NOC pending complete settlement of TKM dues as these are secured assets unlike Trade advance of TKM which works little differently. As per my contact, Lot of spare parts are lying at Dealership which they want to return to TKM so I am afraid things will be a little difficult for the time being. That said, Grace being a large corporate will definitely settle this with TKM and I will suggest asking Dealership to share the payment details against your Car and make Lexus India a party to your complaint.

[Dhruv29]

Originally Posted by Turbanator

I will suggest asking Dealership to share the payment details against your Car and make Lexus India a party to your complaint.

I'll definitely as for details, provided they answer my phone which they've been ignoring. Thanks for info!