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What Would Lexus Gain by Moving its Global HQ to SoCal?

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Old 12-14-11, 05:05 PM   #1
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Default What Would Lexus Gain by Moving its Global HQ to SoCal?

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Old 12-14-11, 07:56 PM   #2
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The most significant gains will be:

1. Increased profit (without increasing the MSRP)

2. Better resonance with the American people as a "more" American luxury brand (Lexus' largest market is the US). Need to be designing and building in the US in the same fashion as Toyota needs the Tundra coming out of Texas.

3. Less chance of part and supplier distruption

4. Fill in the production gaps where needed.

The most important is #1, Toyota must be profitable (and more profitable) without increasing MSRP.
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Old 12-14-11, 08:48 PM   #3
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Not to be a deliberate troll, but so far as the auto industry is concerned, US build and quality do not go together. I believe that the major reason people admire Lexus is their superior build quality.
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Old 12-14-11, 08:59 PM   #4
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Originally Posted by LexsCTJill View Post
The most significant gains will be:

1. Increased profit (without increasing the MSRP)

2. Better resonance with the American people as a "more" American luxury brand (Lexus' largest market is the US). Need to be designing and building in the US in the same fashion as Toyota needs the Tundra coming out of Texas.

3. Less chance of part and supplier distruption

4. Fill in the production gaps where needed.

The most important is #1, Toyota must be profitable (and more profitable) without increasing MSRP.

No. I have to disagree on several of these points.

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1. Increased profit (without increasing the MSRP)
There probably wouldn't be increased profit. The cost of doing buisness in CA, partly because of the state's high-tax, high-regulation, anti-buisness culture, is becoming prohibitive. Nissan, for example, moved out of SoCal because of the high costs of doing buisness there....they packed up and went to TN.

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Need to be designing and building in the US in the same fashion as Toyota needs the Tundra coming out of Texas.
The current 2Gen Tundra was, for the most part, already designed in and for the American market.....building it in TX didn't change that. Toyota had (finally) learned from its years of mistakes in trying to market three-quarter-size pickups as true full-sizers. The 2Gen Tundra of 2006 finally WAS a true full-sizer, though quality issues and some cheap flimsy parts in the first few years limited its appeal somewhat..

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14. Fill in the production gaps where needed.
One of the problems with the ongoing Anti-Wall-Street protest in cities nationwide is that protestors have managed, in port and coastal cities, to block at least some of the flow of cargo coming in and out and the loading/unloading of ships. I won't get into the politics of the movement here (that is for the DEBATE forum), but this protest shows every sign of being a determined, serious, ongoing matter, and of not declining anytime soon. Whether you agree with these street-protestors or not, they seem to be there to stay for quite some time, and they are potentially a major obstacle to the free-flow of auto-parts arriving from Japan to support production in American plants.

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The most important is #1, Toyota must be profitable (and more profitable) without increasing MSRP.
That attitude is exactly what got the company into so much trouble in the last few years....the blind pursuit of profits and company-expansion, while at the same time, neglecting the quality of the vehicles. In overtaking GM as the world's largest auto-manufacturer, for existance, they classically repeated some of the same mistakes that GM had made in previous years. Fortunately, we are seeing some improvements in the latest Camry, Yaris, and Highlander, as Toyota now seems to be focusing more (like they did for many years in the past) on vehicle-quality again. What they need to do now is to simply keep up the good work.....not go back to the classic bean-counting that got them into so much trouble.
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Old 12-15-11, 06:27 AM   #5
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let me put it out in this way - maybe then you guys would get GS460?
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Old 12-15-11, 12:40 PM   #6
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Old 12-15-11, 03:39 PM   #7
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let me put it out in this way - maybe then you guys would get GS460?
As I see it, a whole lot more is involved in choosing a new car than just where it is built or where the corporate headquarters are located.
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Old 12-15-11, 04:15 PM   #8
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let me put it out in this way - maybe then you guys would get GS460?
Possible, but it is clear that there is no business case for a V8 in the GS at this time.

The move to the USA for HQ followed by building Lexus cars in the USA is strictly about costs and appealing more to US masses.

At the end of the day, a US built Lexus model while be cheaper to build and delivery to a customer than a Japan made model. This cheaper cost allows the MSRP to stay flat and not increase.

Folks, there is a reason why Toyota build so many cars and trucks in the USA...its about costs and the future of Lexus will be in the US or Lexus will not grow.
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Old 12-15-11, 04:27 PM   #9
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1) Lexus already has it's own building here at the NA headquarters

2) smaller earthquakes
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Old 12-15-11, 04:42 PM   #10
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As I see it, a whole lot more is involved in choosing a new car than just where it is built or where the corporate headquarters are located.
it is all about who makes the decision... Japanese can not understand the need for GS460 when nobody got it before.

American can.
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Old 12-15-11, 04:57 PM   #11
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Originally Posted by LexsCTJill View Post
Possible, but it is clear that there is no business case for a V8 in the GS at this time.

The move to the USA for HQ followed by building Lexus cars in the USA is strictly about costs and appealing more to US masses.
That's not entirely true...the move for Global Lexus HQ to move to the US is the fact that the Lexus division was an American idea from the start...specifically here in Southern California. TMC went to Orange County to study the luxury lifestyle in America and they found it was the perfect place to help put together a luxury marque.

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At the end of the day, a US built Lexus model while be cheaper to build and delivery to a customer than a Japan made model. This cheaper cost allows the MSRP to stay flat and not increase.
That's not entirely true because if that was the case, the RX would be built in the United States instead of mainly Japan and Canada. True that the USA is Lexus' largest and oldest market, but we're not talking about manufacturing here, we're talking about global operations. Because Lexus USA has the expertise in strategy, it would only make sense to bring its headquarters to the experienced folks in Torrance.


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Folks, there is a reason why Toyota build so many cars and trucks in the USA...its about costs and the future of Lexus will be in the US or Lexus will not grow.
The main reason why Toyota builds many cars in the US is because of American demand for specific models (Camry, Avalon, Venza, Corolla, Sienna, Tacoma, Tundra) Note that majority of these models are North American spec only. Camry and Corolla are built in many other global Toyota plants as well. We still get Japanese built Camrys and Corollas here in the US. It would make sense to build an ES here in North America as the RX and ES are Lexus' bread and butter volume sellers here.

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Originally Posted by Byprodrive View Post
1) Lexus already has it's own building here at the NA headquarters
True they do, but Lexus division in USA is the most seasoned of all the Lexus global markets. The other Lexus markets use the USA as a model for their sales and marketing efforts. They don't necessarily use them as the US is a unique market for Lexus.

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2) smaller earthquakes
LOL not quite because California is part of the Ring of Fire and earthquakes of those magnitudes can happen here. Its just a matter of when.
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Old 12-15-11, 05:30 PM   #12
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That's not entirely true...the move for Global Lexus HQ to move to the US is the fact that the Lexus division was an American idea from the start...specifically here in Southern California. TMC went to Orange County to study the luxury lifestyle in America and they found it was the perfect place to help put together a luxury marque.



That's not entirely true because if that was the case, the RX would be built in the United States instead of mainly Japan and Canada. True that the USA is Lexus' largest and oldest market, but we're not talking about manufacturing here, we're talking about global operations. Because Lexus USA has the expertise in strategy, it would only make sense to bring its headquarters to the experienced folks in Torrance.




The main reason why Toyota builds many cars in the US is because of American demand for specific models (Camry, Avalon, Venza, Corolla, Sienna, Tacoma, Tundra) Note that majority of these models are North American spec only. Camry and Corolla are built in many other global Toyota plants as well. We still get Japanese built Camrys and Corollas here in the US. It would make sense to build an ES here in North America as the RX and ES are Lexus' bread and butter volume sellers here.



True they do, but Lexus division in USA is the most seasoned of all the Lexus global markets. The other Lexus markets use the USA as a model for their sales and marketing efforts. They don't necessarily use them as the US is a unique market for Lexus.



LOL not quite because California is part of the Ring of Fire and earthquakes of those magnitudes can happen here. Its just a matter of when.
Sorry, I should of made it clear. When I say "built in USA" I meant to say North America and Canada-Mexico included.
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Old 12-15-11, 05:43 PM   #13
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The main reason why Toyota builds many cars in the US is because of American demand for specific models (Camry, Avalon, Venza, Corolla, Sienna, Tacoma, Tundra) Note that majority of these models are North American spec only.

American demand, of course, was part of it, but the main reason why Toyota originally came to America and did the Georgetown, KY and (with GM) the Fremont, CA NUMMI plant was because of the Reagan Administration's quota, back in the 1980s, on Japanese-imports. Those import-restrictions severely limited the number of vehicles that could be shipped from Japan and unloaded at U.S. ports, screwing up the supply-demand situation and allowing dealer mark-ups and indifferent customer service. . To get around those quotas, Toyota decided to start producing new vehicles on the North American continent....the same reasoning behind the Honda plant at Marysville, OH.

Those quotas, BTW, and the 25% import-truck tariff, were the reasons why Toyota trucks of that vintage all had those rust-out rear beds. To get around the tariff (which only applied to whole-trucks), Toyota shipped the chassis/frame/cabin/powertrain assemblies from Japan and had the beds welded on here on the West Coast, after unloading at the dock. They used defective, poor-quality welds, which rusted out from the inside......there wasn't much you could do to stop it, even with proper care.
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Old 12-15-11, 06:02 PM   #14
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American demand, of course, was part of it, but the main reason why Toyota originally came to America and did the Georgetown, KY and (with GM) the Fremont, CA NUMMI plant was because of the Reagan Administration's quota, back in the 1980s, on Japanese-imports. Those import-restrictions severely limited the number of vehicles that could be shipped from Japan and unloaded at U.S. ports, screwing up the supply-demand situation and allowing dealer mark-ups and indifferent customer service. . To get around those quotas, Toyota decided to start producing new vehicles on the North American continent....the same reasoning behind the Honda plant at Marysville, OH.

Those quotas, BTW, and the 25% import-truck tariff, were the reasons why Toyota trucks of that vintage all had those rust-out rear beds. To get around the tariff (which only applied to whole-trucks), Toyota shipped the chassis/frame/cabin/powertrain assemblies from Japan and had the beds welded on here on the West Coast, after unloading at the dock. They used defective, poor-quality welds, which rusted out from the inside......there wasn't much you could do to stop it, even with proper care.
That explains why Toyota had TABC in Long Beach to produce truck beds and other components imported Hi-Luxs up to the late 80s.
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Old 12-15-11, 07:19 PM   #15
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Sorry, I should of made it clear. When I say "built in USA" I meant to say North America and Canada-Mexico included.
So USA invaded those countries and they are states now?
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