Japanese automotive giant Toyota may shelve its plan to promote its luxury Lexus brand in China, thanks to slowdown in the country’s automobile sector coupled with a weaker yen.
With China's automobile market registering a growth rate of 1.4% during the first half of this year, speculations are on that the automobile manufacturer will be dithering over taking a call until 2018, a report by Reuters said.
Before making any multimillion-dollars investment in that country, the Japanese carmaker aims to boost the Lexus brand and reach the annual sales figure of at least 100,000 vehicles.
Toyota also seems to be unwilling to enter into a joint venture for its Lexus business, a clause mandatory in China for automobile makers from the overseas.
A Toyota executive told Reuters: "Toyota's committed to China, and we will eventually start producing Lexus cars here. There's no doubt... But we need to do a few things before we take the plunge."
Besides, a weak yen will now make it cheaper for the cars to be produced in Japan for maintaining the competitive edge of the carmaker. Yen went south by around 50% against the dollar since 2013.
Beijing-based Toyota spokesman Takanori Yokoi told the news agency that the company was "always trying to find ways to optimize its business, including Lexus in China, including a look at the pros and cons of producing Lexus cars locally in China".
