Honda were first to see the light and shortly after, Toyota followed. It was time to address the competition with the European luxury car manufacturers and challenge Germany’s dominance.
BMW and Mercedes-Benz were both at the very top of the luxury car market in the early 1980s, and especially the Mercedes-Benz type W126, was firmly positioned on the throne. In almost all markets, the W126 S-class was a market leader – a position which the brand was well accustomed to. The Japanese had at that time spent 20 years or so learning the art of producing cars. In fact, they had become so good at it, that by 1980 they overtook the USA’s position and were now the world’s biggest car-producing nation. With diligence, market understanding and technical ingenuity, they had achieved the impossible. They mastered the secrets of mass production and they had no shame in life when it came to letting themselves inspire by the most successful of their competitors. They honestly stole all that was worth stealing. It was with small and medium-sized cars that the leadership position was acquired, but it lacked tremendously at the expensive end of the scale and mainly in the lucrative segment of the luxury saloon – the status symbols of directors, officials and lawyers.
Whether it was some sort of deal between Honda and Toyota, industrial espionage, or pure coincidence based on the logic of both companies strategically targeting the luxury market, I do not know, but the two companies were establishing their plans at roughly the same time. In 1986, Honda launched the luxury brand Acura in the United States, and it was under this name that customers first got to experience exquisite luxury and performance from the Land of the Rising Sun. In 1989, big and powerful Toyota followed suit with their Lexus brand, and shortly after Nissan joined the movement too with their luxury brand, Infinity.
Lexus began its assault in the United States, but soon spread to the rest of the world and quickly became the “winner” of the Japanese car manufacturers’ attempts to conquer the market of expensive luxury cars. Today, Lexus is sold in over 70 countries and is among the 10 strongest Japanese brands.
Lexus’ first model was called the LS400 and was the culmination of prolonged development work, since 1983, in Toyota’s design studies. Internally, Lexus is called the Toyota F Division and the first steps were taken with the development of a model codenamed the F-1. At that time, the Lexus brand had not been thought up just yet, but there was a will to progress at Toyota. Success had been achieved with their Supra sportscar and the more prestigious Mark II. Both had rear-wheel drive and powerful six-cylinder engines. If you wanted something really exquisite and expensive from the factory shelves, then you were referred to the department for the hand-built and ageing Toyota Century. It was equipped with a V8 engine, but the design dated back to 1967. Furthermore, it was reserved for government officials and leaders of industry within the Japanese conservative home market. New lines were required…
The designers in the department where the F1 saloon was created had clearly targeted the international markets. Their endeavours had to be comparable with the best from both Europe and America. But it needed to be more than just skindeep, so the development of a brand new V8 engine was simultaneously underway.
Toyota sent a team of designers to California to investigate the habits and tastes of the group of Americans in the top income category. Focus groups were created and thorough market analyses were carried out. Prototypes were tested on everything from the German Autobahns to the American desert roads. Toyota’s final conclusion on the extensive work was that a new brand had to be established in order to be Internationally successful with a new Japanese luxury car.
The F1 project was completed in 1989 and included 60 designers, 24 engineering teams, 1,400 engineers, 2,300 technicians, 220 support staff, approximately 450 prototypes and more than 1 billion Dollars in cost. The final result was the new Lexus LS400. The car had a design that did not share any essential elements with Toyota’s other cars. The number 400 in the model name referred to the new 4.0-litre V8 petrol engine, and for a car in this class the rear wheel drive was still regarded as best practice.
The Lexus LS400 debuted in January 1989 and the launch of the Lexus name was accompanied by a multi-million dollar advertising campaign.
The LS 400 was widely praised for its silence and comfort, well-designed and ergonomic interior design, engine power, build quality, aerodynamics, and fuel economy. In some markets, it was priced against medium-sized, six-cylinder Mercedes-Benz and BMW models. It was rated by some car magazines as better than the more expensive Mercedes-Benz 420SEL and BMW 735i. Lexus quickly established customer loyalty and its debut was generally considered a shock to existing luxury marques. BMW’s and Mercedes-Benz’s US sales figures dropped 29 percent and 19 percent respectively, and BMW’s management were not slow to blame Lexus for dumping prices on that market.
Whether Lexus – initially through their LS400 – eventually achieves classic car status is hard to predict. The transition from Toyota to Lexus and the establishment of the new upmarket brand was masterfully executed and deserves due applause from car enthusiasts worldwide. It’s a rare occurrence that a company devotes itself 110% to a project of such substantial size, without imposing any financial ceiling and resource constraints. The conservative exterior of the LS400 and its elaborate interior technology reflect the willpower that Toyota put in place during the mid-80s. They were rewarded successfully too, as opposed to so many other marques and models which we often write about here at ViaRETRO. But inversely, that is perhaps also the reason why Japanese cars do not always get our full sympathy. They are succesful, too calculated – too purposeful.