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Toyota’s Lexus sees methodical gains in U.S. to emerging markets

Bloomberg

Toyota Motor Corp.’s Lexus luxury line aims to grow as much as 10 percent annually for the next 30 years as it expands in the U.S., its biggest market, as well as in emerging markets from China and Vietnam to Brazil and Peru.

“I’m trying to get to nice methodical growth,” Mark Templin, the executive vice president for the unit, said Monday in an interview in Detroit. “First and foremost, I want to establish the brand. If you get that right, the volumes will follow.”

Lexus expects the biggest volume gains to come from the U.S., even as emerging markets reduce the American share of the unit’s global deliveries, Templin said.

The unit will expand U.S. sales by adding high-priced cars rather than by following German competitors racing to add under-$30,000 models, Jeff Bracken, the brand’s U.S. chief, said Monday.

Deliveries for Lexus, the top-selling U.S. premium brand for 11 years until falling behind BMW and Mercedes-Benz in 2011, should increase 6 percent to about 290,000 this year, Bracken said in an interview at the North American International Auto Show in Detroit.

At the event Monday, Lexus showed the RC F performance car, a luxury coupe with an engine that delivers more than 450 horsepower. While the company hasn’t disclosed pricing, it’s the type of “halo” model Lexus needs more of, Bracken said. Lexus’ least-expensive model is the CT hybrid, which begins at about $32,000 and “we won’t go below that,” Bracken said.

While Lexus may not regain the luxury lead anytime soon, its U.S. business prospects have improved since 2012 as the yen weakened against the dollar, boosting the profitability of models imported from Japan, said Templin.

He said the company will continue to build its core products in Japan, even as the carmaker builds its SUVs in Canada.

Entry-level vehicles such as the $29,900 Mercedes-Benz CLA helped the Daimler brand grow 14 percent last year, and Volkswagen’s Audi unit plans to introduce an A3 sedan this year matching the CLA’s price.

The RC F, which replaces the $63,600 IS F sedan, will arrive later this year. The vehicle has an engine that will make it the “most powerful V-8 performance car ever developed” by the brand, Bracken said.

Aishin Seiki to expand

bloomberg

Aisin Seiki Co., an auto parts maker that counts Toyota Motor Corp. as its biggest customer, is considering acquiring or collaborating with electronic component makers to develop parts.

“It’s not possible to develop everything by ourselves,” President Fumio Fujimori, 65, said in an interview in Kariya, Aichi Prefecture, where Aisin Seiki is based. The component maker is partly owned by Toyota.

Toyota said last year it will introduce systems in about two years enabling cars to communicate with each other to avoid collision. As self-driving systems and such new features become the next big trend for automakers, component makers are ramping up their efforts to supply for such vehicles.

“We are looking at companies of the electronics industry to help improve usability and comfort in cars,” Fujimori said Jan. 8.

He didn’t provide details of companies that Aisin Seiki is looking to acquire or partner with.

Denso Corp., Toyota’s biggest supplier and part-owned by the automaker, partnered with Sharp Corp. last year to develop technology using home electronic technologies.

Aisin Seiki, which makes transmissions, may consider forming a similar partnership, Fujimori said. Acquisitions bigger than ¥100 billion would be “too big” for the company, he said. Aisin Seiki had ¥395.33 billion in cash and short-term investments as of Sept. 30, according to data compiled by Bloomberg.