Lexus says sedan market isn't dead yet, as it shifts gear in China amid new rivals

Toyota's luxury division Lexus says it remains committed to sedans, in particular for China where it says it is facing new competition. 

The sedan is not dead yet according to Lexus, the luxury division of the world's biggest automaker, Toyota.

Despite SUV sales overtaking traditional passenger cars in key markets globally – including in Australia – the top executive for Lexus globally, Takashi Watanabe, told a briefing with international media in Japan the company was still committed to sedan vehicles.

"If you look at the global market, the share of sedan is gradually coming down but there is still a substantial demand for sedans," said Mr Watanabe, speaking through a translator.

"We continue to see a market (for sedans) … and continue to place importance and focus on sedans."

For example, the executive noted, the Lexus ES sedan currently accounts for half of the brand's sales in China.

However, he said, the Chinese automotive market presents its own challenges.

"The Chinese market evolves and changes very fast, so sometimes there will be a very immediate ramp-up of volume of certain new models, and given the pricing range for some of our Chinese local competitors, we cannot continue to do the same," said Mr Watanabe.

"We need to take Lexus a step further and change the way of our business otherwise we will not be able to continue to grow Lexus in China.

"Especially given that Lexus will be driving (the growth in electric cars) in China as well, so we will need to change our product planning approach.

"Conventionally we are focused on global product planning, but in parallel to that strategy we may want to have product development more focused on China or exclusively for China (for certain models).

"In that sense, we should be more and more focused on the China market in order for us to continue to catch up to the speed of change (there) and continue to capture the needs of our customers."

Lexus has previewed the next-generation ES mid-size sedan (above) based on the next Toyota Camry, due next year – while the Lexus IS is expected to go electric as a rival for the Tesla Model 3.

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