‘With Century brand coming in, Lexus is now free to come up with different products and pursue new luxury,’ says Takashi Watanabe | Business News

Takashi Watanabe: If you are asking if the tariff situation is causing us to make any big changes right now, the answer for now is ‘No’.

Most of the tariff regulations are coming from the United States. As a global corporation, we already have a programme where we work very closely with our various regions. We are trying to match the needs of those regions, including production and supply chain provisions. When you talk about Lexus, we already have a factory in North America and dedicated models for the United States. We are working very closely with the region to be able to adapt to anything that comes up. From a global vision standpoint, we will continue working with our global regions now and even more moving into the future.

Q: How does the launch of ‘Century’ free up the Lexus brand to pursue its own course?

Watanabe: Within the Toyota Corp, we believe each brand has a specific role to play. By clarifying and making those individual roles clear, what we are allowed to do is to focus more on each brand, giving more of an edge. Until now, at Lexus, we believe that our job is to protect the traditional value of luxury. What it means is that in the case of cars, all of the tradition, heritage, and Japanese craftsmanship that comes with the luxury cars will now be taken care of by Century, and it will protect those values. It clears the path and frees Lexus so that we are not bound by that. When we look at the future, we are dropping down on new products and exciting things, while the Century will take care of the tradition. Of course, you think of the LS when you think of luxury sedans. Now we have the freedom to think of making a 6-wheel minivan. Now we are not bound by those constraints anymore. All of that tradition in the Toyota Corp is now taken up by Century. Now we are free to drop into different kinds of products and free to pursue new luxury. We are going to take on the challenge as a brand now. It’s got nothing to do with the pricing or which brand is above the other. What kind of role they are going to play in the luxury space is what will dictate the product.

Now we are not just bound by automobiles; we can move into different kinds of mobility as well as new kinds of services. Examples are the Jovi, Catamaran, and the micro-mobility that we displayed at the Japan Mobility Show. We can try to offer these new kinds of mobility. At Lexus, we are going to offer more offerings for those kinds of products.

Q: Lexus has plans to go 100% Battery Electric Vehicle (BEV) models globally by 2035. Where are you on that journey? 

Watanabe:  BEVs are a core part of our electrification strategy.  The BEV technology is largely swayed by infrastructure and regulation, so the speed of adoption is different from region to region. Before we look at BEVs, we are a car manufacturer, and a car must be convenient and enriching to the user, and also has to be fun. If the car is not convenient to use, even if it is BEV, the customer will not choose it. First, we are focusing on electrification. Moving forward, we are going to act according to what we feel is the right timing. How are these electrified products going to express the Lexus brand? We will continue to develop products that will create new value, but we will do so in a manner to match the regulations and infrastructure that each region has. Once all that matches, the whole electrification movement will continue to progress.

Q: What will be the role of hybrids as you move towards BEVs?

Watanabe: We believe it will be purely based on what the customer wants. Both hybrids and BEVs will remain as an option to customers, but it all really depends on the region and the infrastructure there. We don’t want to force only one option on our customers. In the global context, hybrid technology has a very important role to play.

Q: How is Lexus aligning its charging ecosystem to underpenetrated EV markets like India?

Watanabe: When you talk about infrastructure regulations and things like that, it’s difficult. Things don’t move at the pace that we just one-sidedly want. After all, we have limitations. There is only so much that we can do as car manufacturers. We have to look at all the local regulations and also how the market itself is maturing, and then make sure the product is right for the market. All these things should align. The first thing we need to do is to ensure we have the proper timing with the proper product, and ensure our global Lexus lineup can handle that. One of the biggest challenges in having an EV is the charging speed. It takes a lot of time to charge. The thought process right now is whether one can have larger batteries to get more range, but then the charging time is longer. Is that the right way to think about cars? Is it ideal? We are thinking that if you are looking for convenience, then the charging speed should be good. That would be the key to making BEVs more convenient and mass market. For example, you can fill up your car with gasoline in one minute and drive 1,000 km, and if you could do that in a BEV, then you are there. We don’t need a 1,000 km in one-minute charge.

Q: How does Lexus view India as a market? 

Watanabe: At this moment, we are doing a lot of research and getting a lot of feedback on how much the Indian market is changing and how the luxury market is evolving. At the global stage, the luxury market is moving towards SUVs, and we are seeing the same trend in the Indian market as well. We need to ensure the products that we introduce in India are what the customer wants, so we are assessing if the line-up we have is what India needs.

Q: What are Lexus’s learnings across key markets, including Japan, the US, Europe, China, and India?

Watanabe: For us, what is important is the future of mobility. How can we make it sustainable and carbon-neutral? We take all that as a package and incorporate it, and that’s our first priority. Electricity, of course, is a crucial factor and solution for moving into the future. Looking at the vast potential of electricity as an energy source, our job is to take that and apply it to mobility so that it is easy to use and create new value through electrified products. For now, the focus is on that.