When one of the world’s largest auto manufacturers decides to introduce a new brand, you cn be certain considerable thought and consideration go into making sure it is the right decision. Thus, in 1983 when Eiji Toyoda asked his top executives; “Can we create a luxury vehicle to challenge the world's best?” a lot of people thought very carefully before they answered.
Given the company we’re talking about here is Toyota, the possibility was more of a certainty. However, the real question was whether they could craft such a vehicle maintaining Toyota’s core philosophy of outstanding reliability and exceptional value for the money—in a premium rear-drive automobile powered by a V8 engine.
The answer, as we all know today was the Lexus LS, one of the quietest, smoothest, most luxurious cars on the road; initially offered at a price undercutting its competition by literally thousands of dollars. One of the reasons launching such a car became an attractive proposition was the voluntary trade restraints imposed upon Japanese manufacturers. The restraints limited the number of cars they could ship to the U.S. in an effort to protect U.S. manufacturers. Toyoda figured if his company must ship fewer cars, it needed to ship models he could sell for more money.
When Honda successfully launched Acura, in 1986, it further cemented Toyota’s plan. The first Lexus cars were introduced in 1989. Of course in this category, the brand identity you establish can be just as key to the car’s success as the car itself. For proof of this, one need only look at what happened when Nissan launched Infiniti. The first Infiniti ads did nothing to inform consumers of the nature of the car. They didn’t even show the car; so potential buyers had no idea what the brand stood for. To this day, Infiniti has yet to see success with a large rear drive V8-powered car, while the Lexus flagship was a sales success from the very beginning.
Launched with the tagline, “ The Relentless Pursuit of Perfection” along with ads showing a pyramid of champagne glasses sitting undisturbed on the hood of a LS 400 running at redline on a dynamometer, it was plain from the beginning this was a smooth running, luxurious car for buyers with champagne tastes. Introduced at the 1989 Detroit Auto Show, the Lexus automobiles came to market the following September with a base price of $38,000 for the LS 400, but with the accoutrements of the competing $60,000 Mercedes-Benz S-Class and the $55,000 BMW 7 Series.
The Lexus autos were noted for their quietness, luxuriously well appointed and ergonomically correct interior treatments, engine performance, build quality, aerodynamics, fuel economy, and value. It was one of the few times in the history of the automobile all of those qualities could be ascribed to the same car simultaneously.
There were a few issues though. Many reviewers called the LS an S-Class knockoff. Frankly, the Lexus did indeed usurp many styling cues from the German flagship. Others felt the LS compromised handling in favor of ride—but that one’s pretty subjective. Fact is, not everyone cares how fast a car will get through a curve as much as they care about a smooth ride.
The Lexus was so well received Mercedes sales took a 29 percent hit in 1989, while BMW took a 19 percent hit. A full 35 percent of early Lexus buyers traded either a Cadillac or a Lincoln for their Lexus. However, in December of that first year, a potential tragedy struck. Remember now, the car had just gone on sale in September. A recall was forced to repair an electrical system fault.
While 8000 cars had been sold up to that point, only two customers complained of an electrical system problem. Toyota recalled all 8000 cars and modified them all in 20 days. Further, Toyota sent technicians to pick up, repair, and return the cars to its customers to effect the correction—free of charge. If an owner was in a remote location and couldn’t get back to the dealer, Toyota flew repair personnel to the owner and rented garage space in their locale to effect the correction.
Widely reported, this sealed the Lexus brand’s customer service reputation.
Introduced alongside the LS 400 was a V6-powered front-drive model called the ES 250, which was based on the then current Toyota Camry’s platform. This gave the marque a more affordable car to sell, one with an already bulletproof powertrain.
Following the introduction of the LS 400 and the ES 250 was the sporty two-door SC 400 coupe in 1991. Featuring all of the luxury accoutrements of the LS, as well as its V8 engine and rear drive powertrain, it was an immediate hit. That same year, Lexus also revised the ES 250 to create the ES 300. Still Camry-based, the car was a solid hit. That version of the ES became the best-selling Lexus car. The ES remains so to this day.
By the end of 1991, Lexus had a full-size luxury sedan, a premium sport luxury coupe, and an entry-luxury sedan. It had also outsold all other luxury marques and was ranked by J.D. Power & Associates as the number one brand for quality, customer satisfaction, and sales satisfaction.
To go toe to toe with BMW, Lexus introduced the GS 300 sports sedan in 1993. This also gave it a model to slot in between the LS and the ES in terms of price. The Lexus certified pre-owned program rolled out that year as well, giving used car buyers an opportunity to benefit from the Lexus sales experience. The marque’s first SUV was offered in 1996—the uber-capable LX 450—based on the hugely respected Toyota Land Cruiser. Smaller SUVs quickly followed, giving the brand a full range of both SUVs and passenger cars. The 1998 Lexus RX 300 is notable for being the world’s first luxury crossover SUV.
In recent years, in addition to luxury, Lexus models have become more performance oriented too, with the LFA supercar sitting atop the brand as its halo model. Meanwhile, Lexus was simultaneously appealing to eco-minded drivers with a full range of hybrid models. Today, (June 2013) every Lexus passenger car has a hybrid variant.
In other words, Lexus automobiles have indeed managed to become everything to just about everyone.