May 14, 2019
Since its beginning of selling cars in Mexico nearly 20 years ago, Toyota Motor Corp. has been bombarded with a constant question from dealers and fans alike: When will Lexus launch in South America?
Lexus executives have been considering that very question themselves with an additional twist: When will the Mexican luxury market be ready to handle a new player catering to the limited number of luxury car buyers in the area. In the third quarter of 2021, the new Mexican operation will open five new dealerships in the three largest metropolises of Mexico City, Monterrey, and Guadalajara. Toyota executives traveled to these locations during the first week of May to deliver the news to its nearly 70 Mexican dealers, some of whom are likely to submit requests to be among the first Lexus retailers in the country.
The Lexus move into Mexico comes as Toyota reaches fourth place in retail automotive sales at close to eight percent of the market and deliveries of over 100,000 vehicles in 2018. Toyota is planning to open a new Mexican factory by the end of 2019 in the central state of Guanajuato. Toyota told Automotive News that Lexus’ supply needs to start meeting the Mexican demand for its unique spin on the luxury space. This includes its lineup of hybrid vehicles that are gaining in popularity as gas prices in Mexico continue to rise.
Tom Sullivan, president of Toyota Motor Sales de Mexico, agrees. “They have been asking in my neighborhood for Lexus over the last 10 years or more,” he said. Bob Carter, executive vice president of sales for Toyota Motor North America, said the same thing. “Toyota customers who want to move up a level have no option but to leave the Toyota family at this point. We want to change that.”
Lexus fans in Mexico have had a long wait while the brand expanded to over 90 countries while bypassing one of the nearest below its southern border. “Lexus is really about two things,” said Carter. “Superior quality and design. We want to provide a great customer experience, to have a good solid base of the luxury market to provide these amenities.”
According to Sullivan, Mexico’s luxury market hit nearly five percent of the total automotive market last year, with more than 65,300 units sold at the retail level. In fact, 2018, was the best sales and market share in the history of luxury vehicle sales in Mexico.
Lexus intends to import the flagship LS 500 sedan and its hybrid variant to the Mexican market first, along with the less expensive ES sedan. SUV LX and crossovers UX, NX, and RX will also go on sale. The move comes on the 30th anniversary of the Lexus brand and follows the rise of the Toyota brand from sixth place to fourth place in the Mexican market share in the short time of five years.