Lexus Manila inaugurates showroom amid economic uncertainties

The Philippine economy’s much-touted resilience in the face of the global financial crisis was much in evidence last week when Lexus Manila inaugurated its new showroom at the Bonifacio Global City in Taguig.

The three-evening event drew a large crowd of the country’s economic A-list and social gliteratti to the futuristic three-level Yuji Hirata-designed structure that features an atrium garden in the middle of the showroom floor.

Five Lexus models were unveiled at the inauguration, including the IS, ES and GS series sedans; the full-size SUV LX570; and the top of the line LS460L, with a sticker price of nearly P8 million. Still to come in March is the RX09, a smaller SUV that is expected to be the luxury brand’s top seller.

Alfred Ty, chairman of Lexus Manila, told The STAR that they have targeted sales of 300 units for 2009, a figure that they are not downscaling despite predictions that the country would begin to feel the effects of the global recession this year.

Ty cited the six percent growth in local car sales for 2008, with Toyota Motor Philippines posting a five percent growth on sales of nearly 46,000 units or 37 percent of the market. 

Ty recalled the beginnings of Lexus in 1983, when Toyota Motor founder Kiichiro Toyoda asked his engineers if they could build a luxury car to rival the best in the field. The answer was yes, but it took over 1,000 engineers, 450 prototypes, and 2.7 million miles of test driving to come up with what is widely considered a new standard in luxury vehicles. Lexus was named best-selling luxury car in the US for eight consecutive years.

Ty also told The STAR that it took about two years to bring the Lexus brand to Manila, following the successful partnership between the Ty family of Metrobank and Toyota Motor Corp. of Japan in Toyota Motor Philippines (TMP).

Lexus Manila is a joint venture of TMP and Mitsui and Co. Ltd.

‘A real paradigm shift’

 Akira Okabe, senior managing director of Toyota Motor Corp. and head of the Asia, Oceania and Middle East Operations Group who flew in for the inauguration, lauded TMP as the “finest auto dealer in the region.”

In an exclusive interview with The STAR on the sidelines of the inauguration, Okabe outlined Toyota’s strategic shift – a “real paradigm shift” – in the face of the auto giant’s expected operating loss for the current fiscal year ending March 31 of Y150 billion ($1.7 billion), the first such loss in 70 years and only the second in the company’s history. Toyota Motor Corp. president Katsuaki Watanabe announced the grim forecast at a press conference last month in Nagoya, near the company’s Toyota City headquarters.

The expected loss comes after eight consecutive years of record profits, including Y2.3 trillion ($25 billion) in operating profit the previous fiscal year.

Okabe said the era of mass production and mass consumption that characterized the huge US market is no longer the dominant strategy. He said Toyota is instead pursuing a strategy of “parallel operations,” with one based on the market in developed countries and another based on markets in the developing countries.   

“We need new technology which is very different from what is for the West,” Okabe told The STAR. “The focus used to be the US and Japan. We make cars for that market and then just bring them over to Asia. But now we must develop (cars) in Asia, by Asians for Asia,” he stressed.

He cited Toyota’s IMV or Innovative Multipurpose Vehicle, in which a similar platform or chassis is shared by different vehicle models. The current IMV family has five models, including the popular Innova as well as a pick-up truck.

Okabe also stressed that Toyota’s development of next-generation technology for cars that are more fuel efficient and with lower carbon emissions will continue despite the global slump in car sales, particularly in the US, Toyota’s most lucrative market. Toyota is the acknowledged leader in “green” automobiles, led by the best-selling hybrid Prius. Toyota also has hybrid models for the Camry and the Highlander, and Lexus has three models in its hybrid range.

Sales prospects

Ty, who is also vice chairman of TMP, was optimistic about the luxury car market, denying that Lexus was entering an already saturated market.

“Luxury cars account for only one or two percent of the total car market in the country,” he said, with about 1,500 units sold last year in a market that saw total sales of 125,000 new vehicles.

Ty said that sales trends in the second half of 2008, especially the last quarter, showed a shift “from big to small,” with the Vios becoming even more popular. The Vios and the Revo are TMP’s top sellers, but the Innova and Fortuner are consumer favorites too. Asked if people were still buying hunkering SUVs after the scare of soaring gas prices last year, Ty answered in the affirmative, but pointed out that “there is a difference between SUVs and fuel-efficient SUVs,” and consumers are opting for the latter.

Ty told The STAR that he expects the mini-SUV RX09 to be a consumer favorite, although there is a definite market for the luxury sedan models.

The STAR learned that Lexus Manila made its first delivery of a sedan the morning of the inauguration.