Is Toyota finally choosing profit over quality?
Toyota really wants to be more successful in China. The Japanese automaker has already entertained the idea of sharing its secrets for the Prius with China to help increase its market share there. A few years ago, Toyota even thought about moving Lexus production to China to help lower costs but decided against it due to fears of decreased quality. Reuters reports that the discussion to move Lexus production to China may be back on the table in order to help the company close the sales gap with German rivals.
Lexus currently imports cars to China from Japan but has researched how to build cars in China andd spoken with its Chinese joint-venture partners, Guangzhou Automobile Group and FAW Group, though it isn't known who initiated the conversations. Moving to China would certainly help Lexus sell more cars there, but the decision is far from cut and dry.
A Lexus insider said, "We're torn over this." Another insider added, "But it makes little sense to let this opportunity slip by." The insiders asked to remain nameless because they are not authorized to speak to the media.
Thanks to efforts by Tesla CEO, Elon Musk, China has rolled back its restrictions on foreign investment. This means Lexus would be free to start building cars in China without a local partner. Toyota already produces the Camry, Highlander, Corolla, Levin, and Crown with the help of Chinese partners, so it does have some experience in the market.
Lexus wants to be known as a premium brand in China but does want to sacrifice its reputation in the United States. With the recent tariffs imposed on China, a move there could be risky for Lexus. This has been a decision Lexus has pondered for years, so it will be interesting to see if the company finally makes the move.