Lexus plans to enter used car market in India; targets first EV launch by 2025

After successfully completing six years in the Indian luxury car market, Lexus, the renowned Japanese carmaker, is now setting its sights on the used car business. The company intends to leverage its existing network of 23 touchpoints in the country to cater to the pre-owned car vertical. This move comes as part of their strategy to diversify their offerings and appeal to a wider range of customers.

Lexus has been acclaimed for its self-charging hybrid vehicles, but now, the automaker is gearing up for a significant milestone by introducing its first electric model in India by 2025. The company's President in India, Naveen Soni, revealed that they are seriously considering implementing a structured pre-owned car programme, which is expected to commence in select outlets after evaluating the business viability with dealer partners.

"We anticipate that by the third quarter or early next year, we should be able to launch the pre-owned car segment," Soni said during an interaction with PTI. He emphasised that the company is carefully studying the market and is looking to target cities with a substantial number of vehicles on the road for the initial rollout.

With their growing presence in the Indian market over the past six years, Lexus believes there is an opportune moment to transition some of their centres into standalone used car outlets. Many customers who bought Lexus vehicles in the past may now be interested in selling their cars to upgrade to newer models, making the timing ideal for this venture.

Additionally, Lexus is considering introducing a short buyback scheme to instil confidence in potential buyers of used cars. The company aims to offer competitive pricing and ensure a seamless customer experience in the pre-owned car segment.

EV strategy 

Addressing their electric vehicle (EV) strategy, Soni shared that Lexus had introduced a few electric vehicles last year to test them in various climatic conditions and receive valuable customer feedback. Based on this information, the company plans to launch its first EV product in India by 2025. As part of Toyota Group, Lexus has been designated as the leading brand to spearhead the electric technology revolution within the conglomerate, and they have committed to going fully electric by 2035.

Lexus India's president believes that 2023 will be the best year for the luxury car segment in India | Image credit: Lexus India

Looking ahead, Soni is optimistic about the luxury car segment's sales outlook in India. He projects that by the end of July, the company will have surpassed the sales volume achieved in the entire previous year. In fact, he predicts that 2023 will be the best year for the luxury car segment in India, even surpassing the peak achieved in 2018 when around 40,000 units were sold annually. Despite the challenges posed by the COVID-19 pandemic, the luxury car industry in India is showing signs of a strong recovery.

Sales growth 

Lexus attributes its sales growth to the expansion of its sales network. The company has significantly increased its reach by expanding its sales outlets from four cities to 23 across the country. This expansion has enabled more customers to interact with Lexus products, helping the brand gain traction in the luxury car market in India and the broader Asia-Pacific region.

As Lexus continues to strengthen its foothold in the Indian luxury car market, the company remains committed to exploring opportunities for local assembly of more products. However, the focus currently lies on ensuring the business's sustainability amidst evolving market dynamics.

With their foray into the used car market and plans for an electric vehicle launch, Lexus is poised to further captivate the Indian automotive landscape with its luxurious offerings and cutting-edge technology.

(With PTI inputs)