Lexus at the Crossroads
Jul 19, 2024
China, as a titan in the global automotive market, with its immense consumer potential and rapidly changing market environment, has undoubtedly become a stage for many car manufacturers to compete. Facing this blue ocean, many international car companies have chosen to produce locally in China to reduce costs, improve efficiency, and better meet consumer needs. However, in the wave of local production, there are also unique brands such as MINI and Lexus, which have won a good reputation and sales in the Chinese market with the status of imported cars.
⏳ In recent years, the market trend has quietly changed. MINI took the lead in changing, with its parent company BMW joining hands with Great Wall Motors to establish Spotlight Automobile, starting the local production process of MINI models, and successfully launched a joint venture brand new car on July 6 this year, marking a new chapter in its market strategy in China. In contrast, Lexus has long adhered to the import strategy, and only recently has there been news of plans to build a factory in China alone, focusing on pure electric vehicles.
🌟 It is noteworthy that Lexus's plan this time has abandoned the traditional joint venture model, striving to achieve 100% equity control and independently operate the pure electric vehicle production line. This move is not only a display of confidence in its own brand control and technical strength but also reflects the deep recognition and layout determination of multinational brands for the future potential of the Chinese market under the tide of electrification transformation. However, for Lexus, whether to produce locally is no longer the only measure of its success in the Chinese market. Whether the brand can accurately capture the diversified and personalized needs of Chinese consumers, quickly respond to market changes, and launch products and services that meet local aesthetics is the key to winning market recognition.
🚙 The promotion of Lexus's local production is an important measure for it to seek breakthroughs and development in the complex market environment. This requires Lexus to make efforts and adjustments in many aspects, and only by fully considering the relationship between the market, profits, and partners can the implementation and sustainable development of Lexus's local production be ensured.
🛣️ In recent years, China's high-end car market has undergone a profound change, driven mainly by the dual trends of electrification and intelligence. Once, the high-end car market was almost monopolized by multinational car companies, and domestic brands were mostly limited to fierce competition in the mid-to-low-end market. However, with the rapid development and popularization of new energy vehicle technology, and the growing demand of consumers for intelligent and green travel, domestic brands have started to collectively challenge the high-end car market with the advantage of taking the lead and accumulating technology, breaking the "moat" of traditional high-end brands.
🔄 Under the tide of electrification and intelligence, consumers' definition of high-end has also changed quietly. Power performance and luxurious interiors are still important considerations, but they are no longer the only standards. User experience, intelligent configuration, and environmental protection concepts have become new high-end labels. As He Liyang, the president of Seres Automobile, said, users in the era of intelligence and electricity, while pursuing a refined and high-end experience, pay more attention to the sense of future and technology brought by the product.
🌐 "Local production" is not a simple transfer of production lines. For multinational high-end brands, the success of local production largely depends on whether they can deeply understand and meet the unique needs of the Chinese market, that is, to achieve real "local adaptation".
📉 Acuras and DS brands are a true portrayal of multinational high-end brands that are "unadaptable to local conditions" in the Chinese market. Although the Acura CDX was launched as the first domestic model, the sales were dismal, one of the reasons being that there is a significant gap between product positioning and price, failing to accurately capture the needs of Chinese consumers. The DS brand, due to its technology and product resources being too "European", did not receive enough localization support under the group's global strategy, resulting in very low acceptance of its products in the Chinese market.
🌟 These cases serve as a warning that when promoting local production, it is necessary to focus on the localization innovation of products and technology, to deeply understand and integrate into Chinese culture, consumer habits, and market trends. Merely relying on the brand's historical accumulation and global influence is no longer enough to stand firm in this fiercely competitive Chinese market. On the contrary, only those brands that can truly achieve "in China, for China" can win the favor of Chinese consumers and achieve sustainable development after local production.
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