Akitoshi Takemura, Lexus India's President, talks about the Japanese luxury brand's next model for India — the NX 300h, why he is not interested in chasing sales numbers, the strategy to build the brand and how Lexus and Toyota are playing mutually supportive roles in India.
The design of the NX 300h looks a little bit edgy and may attract younger buyers towards the brand. Is that what you are targeting?
The young customer is one aspect but I am sure people who really enjoy an active life will purchase the NX 300h premium-urban sports car. Some people, who live in urban areas, enjoy sports and who are young at heart, will definitely consider
this model.
With the price tag expected to be around Rs 60 lakh, some may see it as a bit too premium priced. This is currently because of the CBU route. Is there any plan of taking the next step for localising the product through the CKD route?
We have not yet announced the price, it is expected to cost around Rs 60 lakh. We will confirm this in early January. We have to see the business conditions and the exchange rate, as this is a very important model for us. We would like to see the domestic reactions, also our guest (customer), dealer reactions and consider how much we can make it price competitive, value-for-money, and then take a call.
Secondly, as regards local production, like our Lexus Global Head Yoshihiro Sawa said, we are studying the feasibility. It’s too early to go in for local production, considering it is just seven months since our India debut. I think we have to study more and see the response to the NX 300h, and other models that we introduced in the Indian market. As per the response, we will take the call.
Volume will be very critical for taking the decision. What is the threshold or target after which it will be viable for you to take a look at the CKD route?
It is too early. I cannot say what the volume will be, which will make it viable to go in for local production. There are a lot of factors; for instance, for assembly, you have to purchase a portion from local suppliers. It also depends on other things like taxes, the business viability is different.
Six months in the Indian market and four models, how big is your customer base? How welcoming has the Indian market been to Lexus?
We are meeting our customer base as per our target, and for us, numbers are not important. The important thing is that we are reaching the right customers and providing them with the amazing experience of owning a Lexus – that is more important. Our relationship managers, who can connect with the customer anytime, show the 100 percent trust reposed in them and the brand equity. That is important.
I am not interested in numbers and I will never talk about them. I also don't talk about numbers with the dealers and relationship managers. Instead, I always talk about how my guest has experienced his ownership. I will check all the logs and records, what kind of contact and communication was done between the guest and our relationship manager, and how it has been evolving. That is only my concern because that's the only way it makes a brand.
Do you have any interesting example or anecdote you would like to share?
There are a lot of interesting examples, but they are some very exclusive customers whose identity I cannot reveal. The general trend is that of the Lexus brand owners, 80 percent have one Toyota car in their fleet. They generally have three to five cars in their fleet. They have one luxury SUV, one luxury sedan, and they have something for the wife and they definitely have one car like the Toyota Fortuner, Innova or Camry. We found that 80 percent of our guests have a Toyota in their fleet.
How do you plan to participate in India's electric mobility programme?
This hybrid-electric vehicle is one of the starting points of that electrification. There is some misunderstanding in the market, as well as in some articles in the media that electrification means 100 percent battery EV. That's not the case.
There are various stages of electrification.
There are stages of electrification. Of course, conventional engine plus electric battery and motor makes for a hybrid-electric vehicle, which is a practical EV for day-to-day use. You do not need to do the charging, you don't need a charging infrastructure which is a bit expensive, and also you don't need eight hours of charging.
Considering the current market situation (in India), this is the right way and the right solution for electrification. Once the charging points come and once the technology is evolved for less charging time, we can go in for the plug-in hybrid or battery electric vehicle.
(This interview has featured in the 15 December 2017 Anniversary issue of Autocar Professional)