Lexus first ever branch in Iran
Time shortage does not stop the success
Lexus is the luxury vehicle division of the Japanese automaker Toyota. The Lexus brand is marketed in more than 70 countries and territories worldwide and is Japan’s largest-selling make of premium cars.
An investor in Iran was considering the first Lexus branch in the country. The reason was the new agreement that made among Europe, USA and Iran due to sanctions relief that makes it possible for foreign companies to come in to Irans market. When the Joint Comprehensive Plan of Action between Iran and the P5+1 was implemented In early 2016, sanctions relief affected the economy of Iran in four principal ways:
- Release of Iran’s frozen funds abroad, estimated at $29 billion, representing approximately one third of Iran’s foreign held reserves.
- The removal of sanctions against exports of Iranian oil.
- Allow foreign firms to invest in Iran’s oil and gas, automobiles, hotels and other sectors.
- Allow Iran to trade with the rest of the world and use the global banking system such as SWIFT
To bring the Lexus dream into reality, It was essential to plan a strategy, analyse the market, have a control on risk managing, budget managing and sell strategies as well as importing plan.
The greatest issue was time. we did not know if the sanction relief plan is going to last for long time as presidential election in Iran and then USA were close and it could effect the agreement. So it is crucial to make sure all the contracts are written and signed to restrict the sanctions risk.
Some of the points to start the process are:
- If market is ready for new luxury brand
- Financial agreement with the banks
- Where and how to establish the branch ( considering the need of exhibition, sell department, repairing department, etc.)
- Importing law and identifying the port to import products and equipment
1.If market is ready for new luxury brand
To asses the market in short time that we had, a fast testing process is defined. we asked some of well known car selling companies to offer different types of Lexus to the buyer as a car that going to be release in three month. The buyers can fill a wish list about the model, the interior and exterior colour and all the detail that interest them and they will be notified as soon as product is ready to buy. there were a great interest to the brand which was phenomenal.
The forms filled by customers, lead the team to the point that among all the type, SUV is mostly chosen group. the model LX600 is the famous one, almost every one asked for the exterior colour of white. The colour for exterior was various but among all there was a a good rang of these colours, Brown, orange, red.
So for the first part of project we decided to import 50 Lexus LX600 , white colour with an exterior colour suggested by Lexus factory which was between the brown, orange and red colour and could satisfy all the groups.
The importing could help us to assess not only the market but the logistic, custom and bank issues. The result was really satisfying. All cars been sold out in less than a week.
2.Financial agreement with the banks
Again on dealing with bank, the best way is the short way. therefore we get in contact with the banks that already have some agreements with other car brands like Porsche, BMW and Mercedes. They already have their branch in Iran and worked with banks for several years. the other issue was that these car brand are not from Japan and some points of agreement can varies with different countries. To prevent any risk we get in touch with banks that already work with Japanese brands like Panasonic as well.
At the end, we collect all the offers, agreements and information and made the best that fits Lexus factory on one side and Iranian investor on the other side by considering tempting offers for customers.
Date
20 November