Toyota Motor Corp (ADR) (NYSE:TM) To Launch A New Model Of Lexus In China, More To Be Revealed In The Auto Show In Shanghai

Toyota Motor Corp (ADR) (NYSE:TM) plans to take the opportunity at the 2015 Shanghai Auto Show later this month to unveil a new model of Lexus. The automaker is expected to introduce a revamped ES sedan. Toyota is currently only giving a sneak preview of the revamped Lexus on its website. However, more details, perhaps more interesting ones, will become public at the Shanghai auto show on April 20.

Do analyst foresee a momentum shift in TM?

The redesigned Lexus is Toyota’s continued focus to lure drivers to its luxury brands.

Introduction of the redesigned Lexus in China will mark the second time in a row that Toyota is choosing China to unveil new models of its luxury cars. The company chose Beijing for last year’s introduction of NX compact crossover. It is not strange that Toyota seems to have greater interest in China, the market is the target for most global automakers and the reasons are many, including strong demand for luxury brands and a fast expanding middleclass economy.

Largest luxury car market

However, Toyota Motor Corp (ADR) (NYSE:TM) currently counts the U.S. as its largest premium car market. The 76,000 vehicles that the company sold in China in 2014 was just a small fraction of the sales made in the U.S. in the same period.

ES and RX are the bestselling Lexus models, and their update is coming in a quick succession. Just earlier this month the fourth generation of RX was unveiled at the New York Auto Show, and now Toyota is looking to China for ES update. Of the two bestselling Lexus models, RX is the top seller.

Despite aggressive updates, Toyota Motor Corp (ADR) (NYSE:TM)’s Lexus brand seems to be gasping for breath in China. The brand has failed to match the success of luxury cars sold by the like of BMW, Audi and Mercedes-Benz. One of the things hurting Lexus is that Toyota imports the car into China instead of building it locally. Imported vehicles attract 25% import tax, which in the end makes Lexus more expensive than peers.

About the Author

Adam is a staff reporter for US Markets Daily Publications & Media, covering foreign affairs and domestic policy.

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