SUVs to account for 50% of Lexus India's sales by 2024-end, says President

Lexus LBX Luxury Compact SUV is expected to hit Indian shores too though the company is tightlipped about it

Lexus India, which derives 70-80 percent of its total volumes from the sedan segment, expects the share of its sports utility vehicles (SUVs) to increase from 20-30 percent currently to 40-50 percent of its total sales by the end of next year. A senior company official said the SUV sales will jump manifold due to the “stabilisation of the products” in this category.

“Our ES sedan is the maximum selling model that we have currently. Having said that, we are now looking at a scenario where there is an improvement in terms of our global supply situation. And that is making us confident that this year there will be a gradual ramp-up of SUVs. The sales growth of SUVs in our product portfolio might be 20 percent to 30 percent,” Naveen Soni, President, Lexus India, told Moneycontrol in an exclusive interaction. He also said that by the end of next year, SUVs will account for half of its sales.

Lexus, which commenced its India operations in 2017, offers three SUVs – NX, RX and LX, two sedans – ES and LS and a multi-purpose vehicle (MPV) LM in the country. The company's product portfolio also includes a coupe – LC. At present, the luxury arm of the Japanese automaker Toyota generates the majority of its sales in India from the locally-produced ES 300h sedan.

Going compact to grab a slice of the SUV market

According to sources, Lexus is exploring the feasibility of bringing other models from its global portfolio to India and one of them is expected to be LBX (which stands for 'Lexus Breakthrough X crossover) compact SUV, which was globally unveiled on June 5 this year. With this model, it will be Lexus' entry into the compact premium SUV segment where it will be pitted against BMW X1, Mercedes-Benz GLA, and Volvo XC40.

Without commenting on its future product plans, Soni maintained, “It is a very decent product and SUVs are getting more popular even in the luxury car segment of the domestic passenger vehicle market. Therefore, we would like to study (its feasibility) and then make a decision based on whatever the findings are. Being a multinational (company), we are studying all these potentials for the (domestic) market and if there is a market need that would be established, then definitely any product that is launched globally becomes a candidate for local study also.”

He was also categorical that Lexus is unlikely to assemble any other models, including SUVs, in the medium term. “We are in discussions with our head office to showcase that there is a true potential of the market. This is because investments are done with the intention of mid- to long-term projections of the market. Hence, what we are conveying (to our parent company) is that India seems to be on the cusp of big growth,” Soni added.

Having already launched the next-generation RX luxury SUV, which is available at a starting price of Rs. 95.80 lakh (ex-showroom), the Japanese luxury carmaker has recently introduced the LM MPV.

“With these two products put together, we can increase our presence in the market. Also, the supply situation is improving both from domestic as well as from Japan,” added Soni. The all-new RX has a maximum waiting period, which is about one-and-a-half years, he said, adding that the new model will further enhance the company’s presence in the SUV segment. He, however, did not share the total bookings of either of the mentioned new models.

When asked about the company's plans regarding enhancing the sales network, Soni noted that the count will be ramped up from 25 currently to around 30 outlets by the end of this year. While a major chunk of Lexus’ sales in the country comes from people engaged in business activities, it is now increasingly tapping self-employed professionals and corporate honchos, the company’s president said.

All-electric fleet by 2035

Meanwhile, Lexus India also revealed that 99 percent of its existing line-up is hybrid cars and the upcoming models will also be underpinned by those technologies. Lexus will be moving towards a 100 percent electrified portfolio by 2035 globally and its Indian arm is also aligned with that goal.

“There was a global announcement last December wherein we have shown our clear intention that we would like to move towards all-electric (fleet) by the year 2035," Soni said. When asked if its India operations will also move in that direction, he said, “Definitely, we are a part and parcel of Lexus Global and the scenario will be similar here as well.”

Lexus also expects its India operations to be among the top three markets in Asia Pacific, excluding China and Japan, from the top ten currently.