Lexus Dealerships Coming to Mexico for the First Time

The Timeline

Lexus is fast approaching its 30th birthday but has yet to open a single dealership in Mexico. This is all set to change, however, as the automaker plans to open dealerships in three areas around the country by 2021. At the moment, customers in Mexico who want to upgrade from their Toyota are essentially forced look at the competition. Toyota is currently the fourth largest automotive brand in the country, taking 7.8% of the market share. 

Photo courtesy of Motor1

The Plan

Starting in the third quarter of 2021 Lexus will open five new dealerships across three Mexican markets. Specifically, dealerships will open in Mexico City and its sprawling suburbs, the Monterrey metropolitan area in northern Mexico, and the Guadalajara metroplex in central Mexico. There are already 67 Toyota dealerships in Mexico some of which will surely submit proposals to be chosen as new Lexus dealers.

>>Join the conversation about Lexus coming to Mexico here in ClubLexus.com.

Why The Wait

It's not as though consumers in Mexico have a dislike for Lexus, and we know Toyota already commands a strong following in the country. This begs the question: why wait so long to open dealerships? The simple answer is, the luxury automotive market wasn't big enough for Lexus to truly compete. Mercedes, BMW, and Audi dominate this market in Mexico at the moment.

>>Join the conversation about Lexus coming to Mexico here in ClubLexus.com.

What's Changed

Out of the 67,153 luxury vehicles sold in Mexico in 2018, Mercedes, BMW, and Audi accounted for a combined total of 53,810 units. So why has Lexus chosen to compete with the big three German automakers now? The GDP per capita in Mexico is steadily on the rise, which is leading to growth in the luxury vehicle sector. Between 2017 and 2018, this sector grew by 12%, resulting in an all-time high of 4.6% share of the entire automotive market in Mexico. On top of this, Mexico's gasoline prices have also been increasing, making Lexus' extremely economical hybrids the perfect luxury vehicle for the situation.

>>Join the conversation about Lexus coming to Mexico here in ClubLexus.com.

The Models

Lexus won't be bringing every model to Mexico at first, but they will import their most popular units. The automaker said it will import the flagship LS 500 sedan and its hybrid variant as well as the more affordable ES model. On top of this Mexican consumers can expect to see the UX, NX, and RX crossovers fill up dealerships, as well as the LX SUV. 

>>Join the conversation about Lexus coming to Mexico here in ClubLexus.com.

Fuel Economy

Of course, as the luxury automotive market grows, it will make room for Lexus to enter. But it's how economical Lexus' models are that'll make them competitive with the big three German automakers. The 2019 Lexus ES hybrid, for example, returns 43 mpg in the city and 45 mpg on the highway. Those who prefer a subcompact SUV can opt for the 2019 UX hybrid which returns 41 mpg in the city and 38 mpg on the highway. There couldn't be a better time for these models to enter the country as Mexico's gasoline prices continue to rise; fuel prices currently sit at $4.14 per gallon and peaked in March at $4.18 per gallon.

>>Join the conversation about Lexus coming to Mexico here in ClubLexus.com.

Official Explination

Bob Carter, executive vice president of sales for Toyota Motor North America, gave an explanation as to why Lexus bypassed Mexico while opening dealerships in more than 90 other countries. He said, "We've been watching the size of the luxury market [in Mexico], because Lexus is really about two things, superior quality and design, and it's about the customer experience... To be able to provide the amenities and have a strong dealer body, we need a good, solid base of the luxury market."

>>Join the conversation about Lexus coming to Mexico here in ClubLexus.com.

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