Established in the early 1980s and launched in 1989, the Lexus soon became associated with quality, luxury and superior customer satisfaction. The brand reputation grew quickly until, and Lexus became one of the best-selling lines of luxury motor vehicles in USA. But they're facing a huge problem in 1995: The USA (via the USTR) is setting up a 100% tax fee on Japanese cars importations of 13 selected models (which constitutes an entry barrier).
I believe the main reason is that they were dissatisfied with the level of US auto parts exports to Japan. So it's a way to show the deception after Japanese promises haven't been realized. It can also be a way to avoid over-buying of foreign luxury cars and thus protect and preserve the American car industry (Ford?). As a matter of fact, luxury cars represent a big potential and they want to keep control on that. And a tariff of 100% of the vehicles prices is a huge amount of money which is certainly very dissuasive.
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[...] It can also be a way to avoid over-buying of foreign luxury cars and thus protect and preserve the American car industry (Ford As a matter of fact, luxury cars represent a big potential and they want to keep control on that. And a tariff of 100% of the vehicules prices is a huge amount of money which is certenly very dissuasive. 2-The segments of consumers will have various reactions: Current owners: - Those who will continue to purchase these cars as they really appreciate them. - Those for whom it was the last Lexus purchase and who'll go to other manufacturers. [...]
[...] 3-The first action to try is negociation with the American government. However, if no satisfying solution is found, Toyota could think of three alternatives: - They might reduce their luxury range in order not to suffer from that change. But it would be offering fewer choices to demanding customers and loosing the money already invested in advertising. - They could also try to compensate by focusing on their domestic market and conquer other foreign ones (Europe ) but they still loose a huge market. [...]