The Lexus story

Ever wondered why Toyota decided to make luxury cars? We tell you the story behind the story of the brand that would take the world by storm.

It was 1983 and the person making the statement, more as a joke, was Hiroshi Okuda, then a senior executive of Toyota Motor Corporation in charge of Asian markets (and later President, then Chairman of the company), when responding to a question I raised about why Japanese companies had concentrated on small cars rather than larger ones. Perhaps Mr Okuda, whom I met in August that year, had not yet attended a top secret meeting in Toyota City which was of monumental significance to the company.

At that meeting, said to have taken place the same month, Chairman Eiji Toyoda declared that the company should make a new luxury model for export – and it had to be comparable or better than the best German luxury models.

By early 1984, a broad outline was prepared and top management gave its approval for the project team known as "Circle F" (for "Flagship") to begin work on an entirely new type of car never before sold by Toyota.

The new model had to be good enough to challenge the cream of the world market and had to be entirely new. Because of their lack of understanding of this new "territory" of the market, the Circle F team spent a portion of what would later be estimated to be US$1 billion (for the whole project) conducting extensive surveys in America, which was to be the model’s primary market.

Focus groups were organised in five major cities and out of the 22-month research, what the luxury car buyer looked for became clear in this ranking: prestige, safety, resale value, performance and styling. It became very obvious that image was crucial in the luxury car buyer's mind; Mercedes owners bought the German car because it was prestigious.

Having figured out who they were designing for, the next step was to work on styling. Calty (Toyota's advanced styling studio in California) was already exploring an upmarket model and this gave the designers a starting point for the model which would later be coded ‘F1’ by its chief engineer.

All the initial ideas were rejected by the top management and it took another 16 months before a shape was agreed upon, an indication of how vital it was to get the car right. Only in May 1987 - just over two years before the car was to be launched - was final design approval granted. It had been a tough battle between the American side which was against the conservative style that the Japanese side favoured.

In February 1986, Ichiro Suzuki was appointed as the new Chief Engineer of the model. Having Suzuki as chief engineer made a lot of difference because he was a body structure specialist. From the outset, he decreed that quietness would be achieved not by masking it with thick layers of sound insulation but by eliminating the very source of the noise.

Since most of the noise and vibrations came from the powertrain, the engineers examined it in detail and used new materials and ideas liberally for silent and smooth running. Their most impressive effort was probably the driveline and differential. Here, the two-piece propshaft was arranged in a very straight line with a high-precision universal joint in the centre and flexible couplings at either end to compensate for even the slightest deviation.

Over 450 test cars were built and driven a total of more than 1.6 million kilometres in different countries. Early engineering prototypes disguised as Cressidas and Crowns were flown to Germany for high-speed testing on the autobahns to confirm the target speed of 240 km/h could be attained. It was amazing that there were no rumours of a new luxury model from Toyota all the while.

Sales began in September 1989 with two models - the LS400 which was the focus of attention, and the Camry-based ES250. The LS400 cost US$35,000 (RM85,500 at that time), US$19,000 less than a BMW 735i and US$26,000 less than a Mercedes-Benz 420SEL which were comparably equipped.

Of the car itself, Mercedes-Benz found it to be ‘competently engineered’, like other Japanese cars, but still would not consider it a worthy rival. Most journalists thought otherwise and Autocar, when testing the Mercedes-Benz 600SEL V12, chose only the LS400 for comparison and declared that the Japanese car was actually smoother.

Ever since then Lexus has been making some of the most luxurious cars in the world and as such given the Germans a run for their money.

Article by Chips Yap

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