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As the sales champion of second-tier luxury car brands,LexusDomestic production has changed from a matter of time to a metaphysical issue.

China is the world's largest automobile market by sales volume.ToyotaAs an important overseas production base, it is inevitable that Lexus will achieve localized production.

The news about Lexus' domestic production has become popular again recently. It seems that everything is ready and the only thing left is how to make it happen.

We believe that the localization process of Lexus is not something that can be completed in an instant, and the relevant research and preparation work has entered a critical stage. Toyota must ensure that everything is foolproof and that it is a great success in one fell swoop.

It is also a Japanese luxury brand.HondaAcura andNissanInfinitiAfter being produced in China, General Motors Cadillac andFordLincolnDomestically produced cars have fallen into price wars and brand dwarfing, and Lexus must do its utmost to avoid repeating the same mistakes.

All the failed experiences of new domestic luxury car brands show that Lexus only has one chance to be produced domestically. If it fails, it will have an immeasurable impact on the market that Toyota has established in China over the past decades.

In Lexus's domestic production plan, there are always FAW,Guangzhou AutomobileIn the three-way game with Toyota, the former two must get this important project, while the latter hopes to get more, including the right to speak and the right to profit distribution.

However, the market influence of domestic automakers has reached its peak in recent years, and new energy vehicles have isolated multinational brands. The overall environment for Lexus' domestic production has undergone tremendous changes.

At the same time, after completing the construction of an annual production capacity of one million vehicles, Toyota North and South suffered overcapacity due to a sharp drop in market demand. The price war further weakened their profitability, and they urgently needed Lexus to survive.

When everyone took it for granted that Toyota would choose North and South Toyota as the domestic base for Lexus, Toyota was rumored to choose to giveTeslaSpecial treatment in Shanghai.

One stone stirs up three waves! The Lexus localization project has joined the economic game between the governments of Tianjin, Shanghai and Guangzhou. After all, this may be the last localization project of a global mainstream automobile brand.

The rapid development of new energy vehicles in China and the idle production capacity of major automobile industry manufacturing bases have made the domestic production of Lexus even more confusing.

As luck would have it, the three major cities of Tianjin, Shanghai and Guangzhou, which are at the center of the game, happen to have three factories built by Evergrande Auto. Among them, the Evergrande Tianjin factory already has a ready-made production line and car manufacturing qualifications, and some of its employees are from FAW Toyota.

However, Toyota has its own specific standards for automobile manufacturing bases and production equipment, not to mention its luxury brand Lexus. Even the production lines of FAW Toyota and GAC Toyota may not be recognized by Lexus, let alone the abandoned production lines of other automakers.

Rather than renovating an old factory, Lexus would rather build a completely new factory from scratch, both in terms of overall cost and brand image.

However, the factory may not be the first issue Lexus needs to consider!

FAW Toyota, backed by FAW Group, is clearly determined to acquire Lexus.CamryDomestic accidents must never happen again. It cannot tolerate and will not allow the Lexus project to be settled in GAC Toyota.

However, GAC Toyota can enable Lexus to achieve localized production faster and better. It has the top manufacturing quality of Toyota's global factories, and there is a ready-made automobile roll-on/roll-off terminal and various export conveniences in the Nansha Free Trade Zone next to its factory.

As for Shanghai, which does not have the ready-made conditions, it has Tesla, an attractive domestically-owned model, and Cadillac's domestic experience.SAIC VolkswagenThe two major joint venture auto companies, Shanghai General Motors and SAIC-GM, are gradually declining, forcing the Shanghai automobile industry to introduce fresh blood.

Introducing the Lexus domestic production project is not an optional option for Shanghai, but the key to consolidating its important national automobile production base. It also needs to prove the replicability of the Tesla project and lay the foundation for the introduction of more luxury brands in the future.

Under the multi-party game, we must examine the choice of Lexus' domestic production from the source!

Toyota is the world's most profitable automaker, with unrivaled profitability. This shows that it places profitability first, and domestic production of Lexus must also meet this prerequisite.

Whether it is continuing to cooperate with FAW and GAC, or establishing manufacturing bases in Tianjin, Shanghai and Guangzhou, Lexus's domestic production plan must meet Toyota's profit framework. It needs to be made clear that Lexus's sole domestic production may not necessarily be the option that is in Toyota's best interests.

Whether it is separating manufacturing and sales, establishing a three-party joint venture, or leasing the existing resources of the two major joint venture partners in a light-asset manner, Lexus has more options.

For Tianjin and Guangzhou, FAW and GAC, winning Lexus is their only goal and choice, failure is an impossible option; for Toyota, having more choices is never a bad thing.

In this context, it depends on who can break out of the immediate competition between enemies and friends, take a longer-term development prospect and industrial development perspective, and propose their own ultimate solution from the perspective of Toyota's profit framework.

In the process of multi-party game, we don’t know whether Toyota can ultimately win its favorite solution, but someone will always have the last laugh.

Of course, the above is just a choice question for Toyota. The more important question is how Chinese users view Lexus, will there be people who will buy it after it is produced domestically, and how much will the sales volume increase.

To be realistic, Chinese users are more interested in knowing how much the price of Lexus will drop after it is produced in China, and this is the life and death issue that Lexus needs to solve in the Chinese market.

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