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Old 29th December 2018, 13:30   #1
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Default Lexus Gurgaon to cease operations from March 2019

Lexus Gurgaon to Cease Operations from 23rd March.

Got this forward from a fellow member, appears to be from the newspaper.

I was always sceptical of their operational viability given the high overheads and the limited sales. Definitely not what Lexus India would have wanted. It seems they have gone too far with their Pricing. 2,4 Crores for an LX or 1,2 Cr for an RX, I won't blame dealerships.
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Lexus Gurgaon to cease operations from March 2019-whatsapp-image-20181229-1.00.24-pm.jpeg  

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Old 29th December 2018, 15:13   #2
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Default Re: Lexus India to operate independent of Toyota

^^^^^
Sad. This, I'm told, is a function of Toyota insisting on two dealerships in Delhi-NCR when the market for now at least has volumes to support only one and Toyota not extending credit to the dealer. Financial loss for the dealer; loss of jobs for the employees who were very good; and loss of goodwill in the eyes of the customer.
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Old 29th December 2018, 18:51   #3
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Default Re: Lexus India to operate independent of Toyota

Quote:
Originally Posted by V.Narayan View Post
^^^^^
I'm told, is a function of Toyota insisting on two dealerships in Delhi-NCR when the market for now at least has volumes to support only one and Toyota not extending credit to the dealer. Financial loss for the dealer; loss of jobs for the employees who were very good; and loss of goodwill in the eyes of the customer.
I think Delhi NCR Market is large enough for 2 or even more. The problem lies elsewhere, in my opinion, Pricing. Toyota in all of their wisdom thought that there is a market of disgruntled German customers who will lap up their fancy dressed up Toyotas with 50 % premium on the already overpriced Toyotas

As you said, they had some nice employees who did earnest efforts to sell the Lexus Experience. They did not get support from the parent company. Toyota is one such organisation who will produce less instead of selling cheap, this works when you have some numbers to take care of your operational costs, like they have cash cows - Fortuner & Innova so they can take care of the salaries and expenses of Lexus employees but if Lexus India was to actually Operate and work independently could they have afforded such expenses and losses for their own organisation? If we check this notice, it's by TKM and not by Lexus India.

Last edited by Turbanator : 29th December 2018 at 19:08.
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Old 31st December 2018, 07:39   #4
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Default re: Lexus Gurgaon to cease operations from March 2019

Thanks for sharing Turbanator! Moving your post to a new thread.

This is the first time I'm hearing of a dealer shutdown so shortly after the brand's launch. Lexus' current sales are terrible, so low that they don't even share sales numbers. As such, Lexus has to support its dealers. The business simply isn't viable otherwise.

Quote:
Toyota in all of their wisdom thought that there is a market of disgruntled German customers who will lap up their fancy dressed up Toyotas with 50 % premium on the already overpriced Toyotas
I think Toyota misread the market. For one, the reliability of Germans has significantly improved. Dare I say, my 530d has been almost as reliable as an Innova! Second, their designs are polarising (I find them w-e-i-r-d). Third, no diesels or big engines. Fourth, the overpriced tags. And last but not the least, if people want a change from the big Germans, Volvo (especially) and Jaguar-Land Rover offer some really nice cars (although not the reliability or dealer experience).

Lexus India is brand new, but it already needs a reboot IMHO.
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Old 31st December 2018, 10:50   #5
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Default Re: Lexus Gurgaon to cease operations from March 2019

I believe from reliable sources that this dealer shut down was initiated by Lexus rather than the dealer. Strange and sad as my personal experience with the dealer had been nothing short of excellent. It is a pity Lexus are not willing to back their dealers when volumes are still on a 'get there' stage. It also means that customers like me must now go find the alternative dealer and rebuild a relation with him.

Dear Lexus, I will write to you directly in a few days to let you know this sort of action is not conducive to building a loyal customer base. Just a month ago I informed your Gurgaon dealer that I will book a NX in early 2020. Well that is in question now.
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Old 1st January 2019, 19:31   #6
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Default Re: Lexus Gurgaon to cease operations from March 2019

Quote:
Originally Posted by V.Narayan View Post
I believe from reliable sources that this dealer shut down was initiated by Lexus rather than the dealer.
TKM doesn't shut down dealers unless they have failed to meet their standards in one way or the other. They will be even more demanding i.e. no compromises when it comes to their Lexus brand. That terse notice with action points/instructions to Lexus Gurgaon on the way forward is an indicator the parting wasn't amicable.
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Old 1st January 2019, 20:28   #7
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Default Re: Lexus Gurgaon to cease operations from March 2019

@V.Narayan ji - just realised that you purchased your car from this dealer. Well, all I can say is that TKM will continue to take good care of you and other Lexus owners.

I speak from my experience dealing with the aftermath of Pune's primary and premier Toyota dealer DSK Toyota sinking and TKM ensuring, all within about a year of DSK-T shutting operations, 3 dealers coming up in Pune to ensure customers aren't left stranded. Not to worry they will take care of your investment. Of that I am 100% sure.

I took my car for its 10th annual service at Shaw Toyota on Fri last week, report coming up in the Vidyut's Altis thread soon.

Every time I go to a TKM dealer I can't but help pat myself on the back for having taken the right decision in choice of car company over a decade ago. In March '19 that ownership experience turns 13 consistent years. Serious peace of mind. There have been ZERO attempts to rip me off with needless expensive part replacements or services. Yes a few up selling of beauty AKA detailing treatments for the car which being the car lover that I am was amenable to. Who doesn't like his baby looking her best? 12 years 9 months (as of Jan '19) of very good to excellent after sales. Not too many car companies can do this in a sustainable manner over this period of time. Heck man! My voice still matters to TKM. It's a good feeling.

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Old 1st January 2019, 20:54   #8
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Default Re: Lexus Gurgaon to cease operations from March 2019

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Originally Posted by R2D2 View Post
I speak from my experience dealing with the aftermath of Pune's primary and premier Toyota dealer DSK Toyota sinking and TKM ensuring, all within about a year of DSK-T shutting operations, 3 dealers coming up in Pune to ensure customers aren't left stranded.
In the case of Toyota - more dealers would be happy to jump in if they allow. Everyone in the automotive circle knows that Innova and Fortuner will continue to bring them good business for a long time to come.

Lexus is a totally different story. I wonder how the Bangalore dealership is surviving. Looks to me like they've invested more in their dealership than most other premium brands have! And I've only seen just more than a couple of them on the roads till date!

Toyota has to support the dealers through this early phase, just allotting other new dealers won't help.
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Old 1st January 2019, 21:05   #9
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Default Re: Lexus Gurgaon to cease operations from March 2019

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Originally Posted by CrAzY dRiVeR View Post
Toyota has to support the dealers through this early phase, just allotting other new dealers won't help.
As I said before, by my reckoning this has happened because Lexus Gurgaon was not able to meet certain criteria. The reasons are not yet public. From the tone of that public message the parting was probably not amicable and this was a decision forced upon TKM and by that extension on the dealer.

The Lexus brand will take time to catch on in this country as it attempts to poach those potential customers who have the German Big 3 in mind. Those ridiculous Lexus sticker prices don't help. Now, if only Toyota/Lexus had the gumption to assemble these cars in India it would go a long way to bring down prices and increase market share in the luxury segment.
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Old 1st January 2019, 21:21   #10
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Default Re: Lexus Gurgaon to cease operations from March 2019

Quote:
Originally Posted by CrAzY dRiVeR View Post
Lexus is a totally different story. I wonder how the Bangalore dealership is surviving. Looks to me like they've invested more in their dealership than most other premium brands have! And I've only seen just more than a couple of them on the roads till date!
I've seen 3 Lexuses in the locality, 2 NX and the other one the sedan ES new facelift version, I'd guess they sell about 2-3 cars every month but that's only a guess, maybe higher or way lower. Have seen about 5-6 cars till date, mostly the ES.

The number one problem with Lexus is the higher pricing, this is where most buyers may think before putting the money down, spec for spec, as much as possible, a Lexus NX is about 5 L more expensive than the Audi Q5, and that is before the 8-10 lakh rupee discount, conservatively, which the Audi will give in all probability if the buyer is wise enough to buy at the opportune time.

Globally, the Lexus was made to undercut the German trio, not exceed them in pricing. Sure, we can blame the duties and tax structures all we want but the big 3 do have their assembly plant here, so why not the world's biggest car manufacturer? The LS 500H is a clear 70 lakhs more expensive than the Mercedes S Class.. that is astounding, 33% more and you're in Rolls Royce Ghost territory, all prices according to NTDV Auto.

I'm sure the margins are quite high for Lexus in India given the pricing, but the model of business is still in danger because at the costs that it would take to maintain a showroom in prime areas, pay sophisticated sales staff and other related expenses.. there should be a few numbers moving out every month to keep the rotation going.
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Old 2nd January 2019, 10:06   #11
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Default Re: Lexus Gurgaon to cease operations from March 2019

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. As for service, the cars are picked up and dropped so no need to mix with the ordinary Toyota men. Toyota should have followed this with the dealer and perhaps opened a brand shop+ display cars in a high end mall.
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Old 2nd January 2019, 19:04   #12
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Default Re: Lexus Gurgaon to cease operations from March 2019

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Originally Posted by ajmat View Post
.... and perhaps opened a brand shop+ display cars in a high end mall.
This is what Volvo is doing. They have taken up some space at the premium South Delhi mall apart from having a full fledged showroom. They have far better volume than Lexus though.

The dealership in question was near my old office and I did pay a visit out of curiosity. It was a good experience by and large. Does make one curious about what went wrong between TKM and dealer.
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Old 2nd January 2019, 19:20   #13
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Default Re: Lexus Gurgaon to cease operations from March 2019

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.
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Old 2nd January 2019, 19:22   #14
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Default Re: Lexus Gurgaon to cease operations from March 2019

This is quite unprecedented and unexpected of Lexus, would definitely dent the confidence of their existing customers and the future wannabes...

The road for Lexus may become further tough once the big Germans brings in their Hybrids. MB has recently taken the first step with the launch of C Class Progressive and as the diesel ban is further accentuated, hybrids would be the more sought after option for a new car buyer.

The current USP of Lexus (Hybrids and reliability) could take a hit once the customers have more options on the table.
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Old 2nd January 2019, 23:22   #15
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Default Re: Lexus Gurgaon to cease operations from March 2019

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.
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