Why is Lexus so expensive in India?
Lexus is expensive in India primarily because most models are imported as completely built units (CBUs), which invites steep import duties and layered taxes, coupled with a relatively small local footprint for sales and service. This combination pushes the sticker price and ongoing ownership costs well above many rivals.
Taxation and import costs that drive price
The major cost drivers stem from India's approach to taxing imported luxury cars, especially when they arrive as CBUs. Here are the key components that inflate the landed price:
- Basic Customs Duty (BCD) on imported cars remains high for CBUs, significantly elevating the ex-showroom equivalent once duties are applied.
- Integrated Goods and Services Tax (IGST) is levied on the value of the car plus duties, further raising the total tax burden at the time of import.
- Compensation cess or other luxury-vehicle levies that apply to higher-end models add additional cost layers.
- Freight, insurance, and handling charges are included in the Customs assessable value, adding to the landed cost.
- State-level on-road charges such as registration fees and road tax vary by state, boosting the final price paid by customers.
- Currency fluctuations between the rupee and the currencies used in manufacturing (often the dollar or yen) can affect landed costs over time.
In short, the combination of duties, taxes, and import-related costs multiplies the displayed price into a substantially higher on-road price for Lexus in India.
Market presence and ownership costs
Beyond the price tag, ownership costs are shaped by how widely Lexus operates in India and how its vehicles are maintained here. A lean domestic footprint translates into higher service costs and slower parts availability relative to brands with broader localization.
- Limited dealership and service network across major cities, leading to fewer authorized service centers and potential delays in maintenance.
- Most Lexus models are imported with minimal localization, which keeps parts costs higher and can prolong supply timelines for repairs.
- Reduced economies of scale compared with brands that assemble CKD (completely knocked down) kits locally, which can bring down unit costs.
- Specialized labor and imported spare parts can drive up routine service and maintenance bills compared with more widely distributed luxury brands.
- Brand positioning as a premium, exclusive marque reinforces a higher upfront price and targeted after-sales strategies.
Put together, these factors mean a higher total cost of ownership for Lexus customers in India than for many premium rivals with more extensive local assembly and service networks.
What this means for buyers
For prospective buyers, the sticker price is only part of the equation. The on-road price, maintenance, and service access all contribute to the overall ownership experience in India.
- Calculate total cost of ownership (TCO) — including maintenance plans, insurance, fuel, and potential spare-parts costs.
- Assess the proximity and reliability of authorized service centers in your city or region.
- Compare with luxury brands that offer local assembly or CKD options, which can materially affect price and after-sales costs.
- Be mindful of delivery times and stock availability, as limited import volumes can result in longer wait periods.
In practice, the premium pricing of Lexus in India reflects a combination of heavy import taxes, limited localization, and a strategy centered on exclusivity and high service standards rather than mass-market affordability.
Summary
The high price of Lexus vehicles in India is driven by import-heavy costs (CBU imports with high duties and layered taxes), a sparse local dealership and service network, and the brand’s premium, exclusive positioning. While exclusivity adds value for some buyers, it also means higher upfront costs and potentially higher ongoing ownership expenses. Prospective buyers should weigh total cost of ownership, service accessibility, and local alternatives when evaluating Lexus against other luxury brands in the Indian market.
