Who Makes Lexus? What you need to know.

Ok I’ve been into cars since I was like 15, especially the premium end of the market. One question that keeps coming up from my friends is about who actually makes Lexus cars. I decided to finally put together everything I know about the brand – partly from my own research and partly from that time I got to tour one of their factories in Japan back in 2019 (still can’t believe I got that opportunity lol).

Lexus and Its Toyota Parent Company

So here’s the deal – Lexus is basically the luxury vehicle division of Toyota Motor Corporation. Toyota launched Lexus wayyyyy back in 1989, mostly trying to grab some of that sweet North American luxury market. I’ve driven both Toyotas and Lexus cars a ton (my dad had a Camry forever before upgrading to an ES). And trust me, you can FEEL the difference in quality even though they’re technically from the same parent company.

Lexus kinda does its own thing within Toyota, with their own design teams and marketing people and all that, but at the end of the day, Toyota calls the shots. What I find super interesting is that Lexus International actually reports directly to Toyota’s CEO – that shows you how important the luxury brand is to their overall strategy!

The corporate structure is a bit boring tbh, but basically Lexus isnt a separate company – its just a division inside Toyota’s global operations. In the US, Lexus operates as a division of Toyota Motor North America.

Oh and fun fact – Toyota’s current CEO, Koji Sato, used to run the Lexus division before getting the big promotion. I read about that in Car and Driver last year and was like “well that makes total sense” cause it shows how Lexus is like their training ground for top executives.

So bottom line – Toyota makes Lexus cars. Period. Lexus is Toyota’s fancy arm that came from their project to build a super luxury car (they called it “F1” internally which led to the original LS 400). But Lexus definitely has its own vibe and style that’s totally different from regular Toyotas you see everywhere.

Where Are Lexus Manufactured?

So this is where it gets interesting! I always assumed ALL Lexus cars were made in Japan, but that’s totally not the case. I found out when I was touring their facilities that Lexus actually has factories in both Japan and North America.

Here’s where they make everything (and I’ve literally seen some of these places with my own eyes):

In Japan:

• Toyota Tahara Plant (Tahara, Japan): This is where they make the fancy stuff like the LS sedan, IS sport sedan, GX and LX SUVs, and RC coupe. I still cant get over watching them hand-polish the LS paint to a mirror finish – I was standing there with my mouth open like an idiot lol. The attention to detail is INSANE.
• Toyota Yoshiwara Plant (Toyota City, Japan): Makes the big boy LX SUV.
• Toyota Motor Kyushu – Miyata Plant: This one does the smaller models like the IS sedan and ES luxury sedan. My tour guide told me they also make the UX crossover here.
• Toyota Motomachi Plant: This is where the magic happens for the LC coupe (which is gorgeous af). They also built the crazy LFA supercar here – only saw one once at a car show and nearly passed out, its THAT beautiful.

In North America:

• Toyota Motor Manufacturing Canada (Cambridge, Ontario): I have a buddy who works here (hey Mark if youre reading this!) and he says they build the RX and NX SUVs for the North American market.
• Toyota Motor Manufacturing Kentucky: They make the ES sedan here – been doing it since 2015.
• Toyota Motor Manufacturing Indiana: This is the newest factory making Lexus stuff – they build the new TX three-row SUV that just came out last year.

Each factory gets parts from suppliers all over the place. The engines and transmissions come from Toyota’s own factories, and a lot of the electronics are from companies like Denso. And dont even get me started on those Mark Levinson sound systems. I upgraded to one in my last Lexus and it was sooooo worth the extra money.

Global Markets and Where Lexus Cars Are Sold

I’ve traveled a decent amount for work (and fun lol) and its always interesting to see which Lexus models show up in different countries. They export cars from the Japanese and North American factories to pretty much everywhere.

United States: This is by far Lexus’s biggest market. I lived in California for 5 years and Lexus RXs are literally EVERYWHERE there. It seems like every other car in some neighborhoods is a Lexus SUV.

Canada: Another big North American market where a lot of the Lexus RX and NX models sold are actually made locally in Cambridge, Ontario. My Canadian friends are always proud of this fact for some reason 😂

China: China has become a huge market for Lexus in recent years. Unlike the German brands that have factories there, Lexus imports all their cars to China from Japan. When I was in Shanghai for a business trip in 2022, I was shocked by how many Lexus ES sedans I saw – apparently they’re super popular with business people there.

Japan: This is kinda weird, but Lexus wasnt even a brand in its own home country until 2005! Before that, Toyota just sold the same cars under Toyota badges in Japan. Now they’re everywhere in Tokyo – my last trip there I counted like 50 Lexus cars just on the ride from the airport to my hotel.

Europe: Lexus struggles a bit in Europe cause everyone there is obsessed with their BMWs and Mercedes. But when I was in London two summers ago, I noticed a ton of Lexus hybrids – apparently the low emissions help with taxes or something.

Middle East: OMG Lexus is HUGE in places like Dubai and Saudi. When I visited my cousin who works in Dubai, it seemed like every third car was a Lexus LX or GX SUV. They love them because they’re reliable in the crazy heat there.

The US is still the biggest single market with like 320,000 Lexus cars sold in 2023, then China with about 181,000, and then Japan, Europe, and the Middle East.

Sales Statistics and Market Trends

So I’ve been nerding out on car sales stats for my blog (dont judge me lol), and Lexus had an amazing 2023 with 824,258 vehicles sold worldwide – thats up 32% from 2022 when they had all those supply chain problems.

Here’s how the sales break down by region in 2023:

• North America: 355,606 units (+24% vs 2022)
• China & Asia: 181,411 units in China (+3%), with 236,587 total in Asia
• Japan: 94,647 units, which is crazy cause thats more than DOUBLE what they sold in 2022 (+129%)
• Europe: 69,202 units (+46%)
• Middle East: 46,472 units (+60%)

I’ve noticed some interesting patterns in what’s selling:

Electrified vehicles are taking over: Almost half of all Lexus sales in 2023 were electrified (47% hybrid/EV/PHEV). I drove both the regular RX and the hybrid version before buying mine, and the hybrid is wayyy smoother and actually feels more luxurious.

Everyone wants SUVs now: Just like the rest of the car market. Lexus SUVs are crushing it while sedan sales are down. The RX, NX, and UX crossovers, plus the GX/LX big SUVs, make up most of their sales now. I was actually gonna get an IS sedan until I test drove the NX and immediately changed my mind.

Most popular models: The RX is still king (I see why – I’m on my second one now), with the NX right behind. The ES sedan still sells really well globally too. I drove the new RX 350h last month and was blown away by how much better it is than my 2019 model – seriously considering trading up now.

Lexus’s Share of Toyota’s Overall Sales

So this is interesting – I was curious how much Lexus contributes to Toyota’s total business, and the numbers are pretty wild:

Global unit share: Toyota sold like 11.2 million vehicles worldwide in 2023. Lexus’s 824k sales is about 8% of that total. So basically for every 100 Toyotas sold, about 8 are Lexus.

Revenue and profit share: Here’s where it gets crazy though – even though Lexus is only 8% of Toyota’s sales volume, they bring in wayyyy more money per car. I’ve heard from dealer friends that Lexus has historically brought in as much as HALF of Toyota’s annual US profits in some years! That’s insane considering how few cars they sell compared to all the Corollas and Camrys out there.

I had dinner with a Toyota dealer last year who told me his Lexus franchise makes more profit than the Toyota side despite selling 1/3 the volume. The margins on luxury cars are just so much better.

Competitive Landscape: Lexus vs. BMW, Mercedes-Benz, and Audi

Ok so I’ve driven pretty much everything in the luxury market for my YouTube channel car reviews. Here’s my take on how Lexus compares to the Germans:

Market share and sales volumes: Lexus is definitely smaller globally than the German brands. BMW sold like 2.10 million vehicles globally in 2022, and Mercedes was right behind with 2.04 million. Audi usually does around 1.6-1.8 million per year. Lexus’s best year (2023) was 824,000 units – about one-third of what BMW sells.

But it really depends where you are. In the US, Lexus is super competitive and was actually the #1 luxury brand for 11 straight years (2000-2010). My cousin in Germany has literally never seen a Lexus on the road there. While my garage has had 3 different ones lol.

Pricing strategies: From my own car shopping experiences, Lexus usually prices a bit below the Germans for similar models. When I was looking at midsize SUVs, the Lexus RX I ended up buying was about $7k less than a comparably equipped BMW X5. Plus Lexus tends to include more standard features rather than nickel-and-diming you with options (which the Germans are NOTORIOUS for – dont get me started on BMW charging for heated seats as a subscription 🙄).

Consumer perception and brand image: Having owned both a Lexus and a BMW, I can tell you the reputation for reliability is 100% deserved. My BMW was in the shop like every 3 months for some random sensor or electrical thing, while my Lexus has needed literally nothing but oil changes for 3 years. Lexus was ranked #1 most dependable brand in the US for 2023 in that JD Power study.

Sustainability and Green Initiatives

I’ve been pretty impressed with how Lexus has handled the whole sustainability thing:

Hybrid leadership: Lexus literally invented the luxury hybrid with the RX 400h SUV back in 2005. I remember when that came out – my dad thought it was so weird to have a “Prius powertrain in a luxury car” but now EVERYONE does it. Today pretty much every Lexus model comes in a hybrid version.

Electric vehicles (EVs): They’re newer to the pure EV game, starting with the UX 300e in 2020 and then the RZ 450e in 2022. I test drove a pre-production RZ last fall and was pretty impressed, especially with that DIRECT4 all-wheel-drive system that adjusts power between front and rear motors instantly.

Electrified sales mix: It’s pretty wild that 47% of all Lexus sales globally in 2023 were electrified (hybrid, plug-in, or EV). In Europe, it’s over 90%! My sister in London says literally everyone she knows with a Lexus has the hybrid version.

Technological Advancements and Innovations

As someone who geeks out on car tech, I’ve been following Lexus’s innovations pretty closely:

Advanced driver assistance: The newer Lexus vehicles have this system called “Lexus Teammate” for semi-autonomous driving. I tried it on a 2022 LS 500h during a dealer event, and the hands-free highway driving is pretty awesome. Not quite as aggressive as Tesla’s Autopilot (which tbh can be kinda scary sometimes).

AI and connected car tech: Lexus is working on this “Arene OS” system for their next-gen EVs. I saw an early demo last year at CES. It’s basically going to let the car learn your preferences and habits over time. Creepy but cool.

Infotainment improvements: THANK GOD they finally fixed their infotainment system! Anyone who had a Lexus before 2022 knows that awful touchpad system was the WORST part of the car. The new touchscreen in my friend’s 2023 NX is soooo much better – finally on par with the Germans.

Future Plans and Strategic Vision

Here’s what Lexus has cooking for the future (and I’m pretty excited about some of it):

Electrification goals: They’re going all-in on electric, planning to have a fully battery-electric lineup by 2030 in major markets and 100% electric vehicles globally by 2035. That’s ambitious af but I’m here for it.

New electric models: I got to see the LF-ZC concept at an industry event last fall. It’s this sleek electric sedan scheduled for production in 2026. They also showed the LF-ZL concept, which is a massive electric SUV with a crazy futuristic interior. Both looked amazing in person – way better than the press photos.

New models and segments: Lexus is expanding their lineup with:

• The Lexus TX: a new three-row SUV for us Americans who need to haul a million kids and their stuff
• The redesigned GX SUV for 2024 (which looks badass btw)
• The tiny LBX crossover for Europe (we won’t get this in the US sadly)
• The Lexus LM luxury minivan for Asia and Europe (also not coming here 😭)

So yeah, that’s my deep dive on who makes Lexus cars and everything else about the brand! Toyota is the parent company, but Lexus has its own identity and continues to grow worldwide. I’ve owned 3 different Lexus models over the years and they’ve all been super reliable while still feeling special. With all their new electric models and tech coming down the pipeline. I’m definitely keeping them on my list for my next car purchase!

What do you think – did I miss anything important about the brand? Let me know if you have any questions about my experiences with them!