Templin: We're not 'ready to run' yet

Lexus' plans exclude China plant

Templin: We're not 'ready to run' yet

Templin: "We're still in the crawling stage."
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TOYOTA CITY, Japan -- Lexus has no plans to join the rush of carmakers manufacturing in China because it has to learn to crawl in that market before it runs, a top executive says.

Lexus remains the only major luxury brand with neither a plant in the world’s biggest vehicle market nor plans to open one. Its sales there have been constrained because all models sold in China are made overseas and get hit by the country’s hefty import duties.

Nonetheless, leaving a China factory out of Lexus’ growth plans is fine with Lexus International Executive Vice President Mark Templin.

“I think we’re still in the crawling stage,” Templin said of Lexus’ business in China. “If you’re going to go there and build cars, to me, that’s running.

“I don’t think we’re ready to run yet,” he told Automotive News.

No conversations

Mercedes-Benz, Audi, BMW and Cadillac already make vehicles in China. Japanese rivals Infiniti and Acura have said they will do so, too.

But Lexus has no clear timeline for production in China and isn’t even seriously considering a factory there.

“We don’t have those conversations,” Templin said. “We haven’t gotten to the point where we have serious conversations about building cars in China yet.”

The immediate priority is building the brand in the country, where German badges are coveted as the epitome of premium and Japanese brands have often been shunned because of political tensions between the governments in Beijing and Tokyo.

“We’re only 10 years into the China market right now,” Templin said. “We’re worrying about developing the brand, making sure people know what we stand for, rolling out a dealer network that’s capable of taking care of customers.”

Modest

Lexus sales in China have been so modest that the brand only recently began disclosing the figures.

In calendar year 2013, Lexus sold around 73,000 vehicles in China, 13 percent more than the year before. It sells every model in its lineup there except the HS hybrid.

By comparison, Audi, the luxury leader in China, sold 492,000 vehicles there in 2013, a gain of 21 percent. BMW’s 2013 China sales rose 20 percent to 391,000, while Mercedes-Benz sales rose 11 percent to 218,045.

You can reach Hans Greimel at hgreimel@crain.com. -- Follow Hans on Twitter

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