Toyota may bring hybrid Lexus to India early next year

With almost all luxury car brands present in India, the absence of Toyota's Lexus has long been noticed. Now, reports say Toyota has decided to launch its luxury brand in India sometime in early 2017.

A Toyota Kirloskar Motor spokesperson said, "It is true that we are studying introducing Lexus to India. However, we would like to refrain from commenting on details such as timing, models etc, as it relates to future product plan."

It's not the first time that Toyota has made a decision to launch Lexus in India. Back in 2013, there was news of Lexus coming to India as an import operation, but an unfavourable import duty rate of 100 per cent, meant that car wouldn't be price-competitive since its German rivals like Mercedes and BMW have assembly operations here.

The import duty hasn't been cut, but hybrid / electric vehicles attract significantly lower import duties.

Lexus is looking to take advantage of this through a strong portfolio of hybrid vehicles. In addition, the recently announced FAME (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles) will incentivise hybrid vehicles up a maximum of Rs1.38 lakh, bringing down the selling-price further.

As a result of these policies, Lexus should be able to price its vehicles close to its German rivals, while being able to claim higher fuel efficiency and lower emissions.

In addition, these hybrid vehicles from Lexus would also be exempt from the National Green Tribunal's ongoing crackdown on diesel vehicles, especially those equipped with an engine larger than 2,000cc.

Autocar India has claimed in its report that Lexus will first launch its LX 570 SUV, which is based on the Land Cruiser SUV. This would be followed by a line-up of hybrid models including SUVs and sedans.

The sales performance of Lexus should be interesting to watch as it would also indicate how much luxury segment customers are willing to accept hybrids and a shift of engineering focus from performance and comfort to efficiency.