Lexus' new strategy:Low-displacement

"In China, the over-3.0L high-emission cars now account for 80% of our total products, and our aim is to reduce this number to 20%", declared Nozaki Matsuhisa, Executive Vice President of Toyota Motor (China) at the listing ceremony for LexusES240, which is specially made for Chinese consumers. The reason for that, according to Sohu.com, is Lexus's sales slumped in the first half of this year, blamed on the higher sales tax on high-emission cars in the country since September of last year. And this is the first time that the brand's sales reduced since it entered the market. The tax increase also ended Lexus' legendary over-100% growth annually.

The introduction of LexusES240 allows Lexus' main model to refrain from exceeding over-3.0L' emission for the first time, therefore shifting its focus onto the sales of low-emission luxury cars.

"Last year we sold 35,100 Lexus in China, and our aim is to surpass it this year", announced Nozaki Matsuhisa in September 8th, breaking the company's tradition of not disclosing sales statistics. The vice president also openly acknowledged that the company's sales experienced negative growth in the first half of this year.

From 2005 to 2008, China's sales of luxury cars increased by more than 10 percent annually. But in the first half of this year, it merely grew by 9%. The growth of B-Class vehicles sales is 23%, which surpassed that of C-Class.

By the latest statistics of Lexus, the share of B-Class cars is about 40% of the entire luxury cars market, so they are strategically vital. Meanwhile, the proportion of below-3.0L luxury cars accounts for 77% of the entire market now, which increased by 10% compared with the time before the new tax policy's coming into force.

Over-3.0 products accounted for 82% of Lexus' total sales, 54% of Benz's, 16% of Audi's and 10% of BMW's. But after being adjusted, the proportion of Lexus' high-displacement cars will be much lower than that of Benz's and a little higher than Audi's.

Besides, Lexus will introduce many hybrid models. By forming a low-emission and new energy strategy, the brand hopes to confirm to China's environment policies and take a place in the market. (Translated by shanglai•Anthony Chan)

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