(music: Metamorphosis - Quincas Moreira)
From the YouTube library It’s rare that a car company sets out to build
“the best car in the world”. But with an almost limitless budget, Toyota had a better
shot than most. The car they created, the LS400, was a statement of intent,
and an engineering marvel. It was also an audacious bid to take on
the finest luxury marques, from a company that just a few years before
had been known for making cheap, tinny cars. But what’s clear is their first car, the LS helped
establish Lexus as a successful luxury name faster than any other car company. Why did Toyota
decide they needed to build the LS, and did this audacious bid to beat the finest luxury
marques succeed? This is the Lexus LS Story. (music) The 1960s saw the British Invasion of America,
but the 1970s were surely the Japanese Invasion. Floods of cheap Japanese cars tempted American
buyers, and once gas prices quadrupled in the mid-70s, they found small, fuel sipping
Japanese cars the ideal choice. Detroit auto makers were wrong footed, and struggled to
keep the domination they’d become accustomed to. Through the 1970s Ford, GM & Chrysler tried to
fend off this new threat. They designed their own cars, brought in small economy cars from their
European operations, or even partnered with those Japanese rivals. But if you can’t beat ‘em, call
your Congressman! Detroit’s car companies, and all of their American workers had more political
sway than these Japanese upstarts, so pressure was applied to impose import restrictions on Japanese
cars. In the end a voluntary restraint agreement was agreed in 1981 where Japanese car companies
agreed to limit imports to 1.68M cars every year. This of course sent a clear signal to Japan’s car
producers. If they wanted to grow their revenue in the USA they either had to start manufacturing
cars there, or make sure each of those 1.68M cars could make as much profit as possible. They
were known for good quality, reliable vehicles, so it made sense to move upmarket, especially
as the young people who’d bought Japanese cars in the 1970s were now older and more affluent.
Honda was the first to launch its Acura luxury brand in 1986. The Honda Civic had competed
with the Ford Pinto. Now The Acura Legend, also known as the Rover 800 would compete with the
Lincoln Continental. This wasn’t what Detroit’s big three had in mind with the voluntary
restraint agreement! Nissan followed up with the Infiniti brand in 1987, and Mazda had plans
to introduce luxury cars under the Amati brand. Toyota wasn’t going to be left out, and
they’d had experience building prestigious cars. The hand-built Century limousine had been
in demand from Japanese dignitaries since 1967, and the Toyota Crown had been in
production since the mid-50s. But the most luxurious car Toyota exported by
the 1980s was the Cressida and little Crown or Camry. But neither of these cars came close
to threatening the best the world had to offer. In 1983, with Toyota’s 50th anniversary looming,
Yukiyasu Togo, head of US operations challenged Toyota to create just this, the best car in the
world. Soon the “Circle F” project was born, “F” standing for “Flagship”. The team initially
considered making an upgraded Toyota Crown, but after driving the best cars the world had
to offer, this idea was dismissed. They needed to produce something much better, and it had
to beat two cars they believed stood out from the crowd, the BMW 7-series and Mercedes-Benz
S-Class. They travelled to the United States, living there for months talking to hundreds of
wealthy Americans about what they wanted from a luxury car. Videos of their findings were sent
back to Japan for the rest of the team to study. Initial designs were created but Toyota wasn’t
satisfied. It would take 8 proposals and 18 months until management were happy. Serious work began
in 1985 and ramped up with a team of 60 designers, 1,400 engineers and 2,300 technicians in both
Japan and the US, producing 450 prototypes. Designers built a mock-up of an American home in
Japan so they could really get into the mindset of their target customer. 1.7M miles (2.7M km)
were logged in global testing. It’s estimated Toyota spent an unprecedented $1B USD (in 2022 £2B
GBP, $2.4B USD, €2.3B, $3.5B AUD) to produce what they hoped was the best car in the world. It’s
a budget other luxury makers like Jaguar could only have dreamt of, but for Toyota this
was a drop in the bucket. They spent $1½B every year on research and development!
The chief engineer was Ichiro Suzuki, and he set the team seemingly impossible
goals. It had to be fast yet efficient, quiet yet lightweight, elegant yet aerodynamic.
To satisfy these conflicting requirements Toyota went through 973 engine prototypes. The
resulting all-new V8 used an aluminium block, produced 241hp (180 kW), and when installed in the
final car got a decent 25 miles per imperial gallon (11 l/100km, 21.4 mpg US). The engine
sat on hydraulic-pneumatic mounts so yes, you could balance 15 champagne glasses on the bonnet
at the equivalent speed of 145mph (233 km/h). Making a car quieter usually involves lots
of sound deadening that adds weight. But Toyota’s new car needed to be lightweight, so
Suzuki took a different tack. This car would avoid making the noise in the first place. The
powertrain was optimised for smooth running, and the engine would be tilted to ensure the whole
transmission line to the rear wheels was straight, so reducing noise and vibration. And to make
the car lightweight, and so faster, Suzuki was draconian over any increase in weight. He had
to be consulted if a part increased the car’s weight by more than 10 grams (0.3 oz)! But by
staying light, and by using an efficient engine, it was able to avoid the US Gas Guzzler tax.
Elegance is something that’s in the eye of the beholder, but it was certainly aerodynamic,
again increasing speed and efficiency. Toyota learnt from Audi and Citroën, producing a
design with a drag of just 0.29. The team initially dismissed the idea of a front grille,
but when compared to its German rivals Toyota realised they needed to include one to give the
car the prestige its American customers craved. Those rich Americans had told Toyota they bought a
BMW or a Mercedes because of its image. Toyota was known for reliable cars, but they knew American
customers wouldn’t want a luxury car with the same badge as a Toyota Corolla. The name most
preferred for their new luxury brand was “Alexis”, but it was associated with the character
“Alexis Colby”, a less than angelic character on the 1980s TV show “Dynasty” or “die nasty”
if you’re American. Toyota tried other names, but with a few jiggling of the letters,
Alexis became Lexus and the name stuck. This new luxury car was taking Toyota into new
territory in terms of quality. Laser welding would produce a stiffer chassis with less material,
the first time it was used in car production. Each component had to be as good or better than
BMW’s or Mercedes’. Tolerances were reduced to ever finer levels. Every component was tested
to destruction and subjected to an accelerated aging process to test for durability as Toyota
had identified depreciation as a problem with other luxury brands. This inadvertently
helped Toyota’s entire range of course. If you’ve learnt to make a better component,
you can put it on a top-of-the-line Lexus or an entry level Toyota Tercel. After all,
the cost to machine them was the same! Inside there was the same attention to
detail. Yamaha’s piano-makers helped ensure the finish of the wood was as good
as it could possibly be. The driver’s seat memory system also stored the side mirror,
steering wheel and seat belt height position. The instruments were designed to reduce
eye strain. But Toyota weren’t trying to copy their German or American rivals, the
car featured its own unique Japanese style. But it also needed extensive testing. Prototypes
were taken to Germany, disguised as Cressidas and Crowns and driven down the autobahn at
150mph (240 km/h). It got hot-weather tests in Saudi Arabia and Australia. By the end of 1988
Toyota felt the car was ready for its big reveal… (music: Take it Slow - SefChol)
From the YouTube audio library The Lexus LS400 launched in January 1989 at
the North American International Auto Show in Detroit. The public were amazed. The
competition were wrong footed. Deliveries started later that year. As a statement of
intent Toyota held the press launch in Germany, right on BMW and Mercedes’ doorstep. Motoring
critics tested the car at autobahn speeds, coming away impressed. Magazines like Car & Driver rated
it higher than its German rivals. No wonder – it had a quieter cabin and a higher top speed.
As for other nascent Japanese luxury brands, the LS400 dwarfed their efforts. Their cars simply
weren’t in the same class, and cars like the new Infiniti Q45 were more expensive. No, Lexus’ true
competitors came from Germany, and by avoiding the Gas Guzzler Tax, it was less expensive. The
new Lexus was 30% cheaper than a BMW 735i and a massive 40% less than a Mercedes-Benz 420SEL. No
wonder then that despite launching when luxury car sales were slumping, North American sales
dwarfed its German rivals. Toyota’s strategy was to attract younger buyers who couldn’t afford
its German rivals, but they were surprised that over a third of people who bought a Lexus
LS400 were trading in a Lincoln or a Cadillac. Of course Lexus dealers needed more than just one
model to fill their expensive showrooms. The ES250 was based on the Toyota Camry, and the SC400,
launched in 1991, was the basis of the 1993 Toyota Supra. Although these new cars were aimed squarely at export
markets, the LS400 would be sold in Japan as the Toyota Celsior, meaning “higher” in Latin. It
was positioned as the finest car Toyota produced, with the exception of the Rolls-Royce
wannabe, the Toyota Century of course! “Lexus focused on products of superior
execution, and created an elevated customer experience
that shook luxury standards.” Well, that was the position of Lexus. BMW and Mercedes-Benz didn’t quite see it that way. Surely
they couldn’t be making this car for a profit, especially as they had to pay off the $1B they’d
just spent on developing the LS400! Lexus must be dumping cars to kill the competition. BMW
& Mercedes allowed it was a well-made car, but it wasn’t a patch on their prestige offerings.
It all sounded a bit like sour grapes! Lexus replied that its German competitors had been
overcharging their customers for years. After all, hadn’t MIT studies shown Japanese carmakers
were already producing higher quality cars than the Germans with just 1/5 of the labour? Despite
their protestations the LS400 was an inferior car, the German automakers bought a few of them and
started tearing them apart to understand just what was so special about Toyota’s new car.
Amazingly, 2 years after the brand appeared Lexus became the top-selling premium car
import in the US. And its caché rubbed off on the Toyota brand, elevating its
reputation as a maker of quality cars. But it wasn’t all plain sailing for the new LS400.
Three months after the first customers received their cars three problems were discovered, two of
them safety related. After all Toyota’s claims of this being such a perfect car, this was a big
loss of face for the Japanese company. Their response was swift, offering to pick up, repair
and return all 8,000 affected cars. What’s more, they’d wash and polish the car and return it with
a full tank of fuel. Rather than tarnishing the Lexus reputation, their response enhanced it.
Lexus listened to customer and dealer feedback, and their changes were incorporated into the 1992
update. Brakes were improved as was the handling, and inside the car got a passenger airbag.
But Toyota’s engineers were busy working on the second-generation LS. Second acts can be a
challenge when the first has been so successful, and Toyota’s engineers had to be careful not to
mess with their winning formula. So, although over 90% of the 1994 second-generation LS400 was new,
the look barely changed. The engine got more power yet sipped less fuel. The car also lost weight,
meaning it could get to 60 in under 7 seconds, which meant bigger brakes were needed. Thanks
to a longer wheelbase there was 2½” (7 cm) of extra rear leg room, yet as the car wasn’t any
longer the boot space suffered. Almost everything in the cabin got an update to make it better.
The air conditioning system monitored the air quality and recirculated it if too much pollution
was detected. The front seats got an internal suspension system, increasing the ride comfort.
Quite a novelty for 1994, the car stereo featured a 6-disc changer in the glovebox.
When the LS launched it sold for $35,000 (£28,600, €33,900, $49,300 AUD), but
Toyota had initially wanted to sell it for just $25,000 (£20,400, €24,200, $35,200 AUD). A
strong Yen had put paid to that aggressive price, but by 1994 the demand for the LS meant that
rather than discounting it, Lexus was selling their new car for $50,000 (£40,900, €48,500,
$70,400 AUD). A lot more, but still below BMW and Mercedes who’d been forced to drop their
prices and scramble to make their cars better. The strong Yen may have meant Lexus dodged a bullet.
At $25,000 the Lexus may have been seen as cheap, and being within reach of the middle class the
brand may not have gained its luxury appeal. Regardless, and maybe thanks to a $50M
(£41M, €48M, $70M AUD) marketing budget, the LS sold well. Not at the high levels
when it was introduced, but more than its BMW and Mercedes competition, and also that of its
Japanese rivals. Maybe a little too well. The US Government imposed a 100% tariff on 13 Japanese
luxury cars including the Lexus LS, claiming the Japanese market wasn’t open to US car imports.
This meant that $50,000 price had now just doubled to $100,000. Crisis talks between the two nations
went on for a month before a resolution averted the punitive tariffs, and Lexus dealers across
the nation breathed a collective sigh of relief! The LS got a facelift in 1997
with an updated front end, but it was the extra 30hp (22 kW) and the new
5-speed automatic that was of most interest. By 2000 Lexus had been established for over 10
years, and the range had grown to 7 models that included a coupé, an SUV and the first
luxury crossover. They notched up their 1 millionth sale in the US, and overtook
Cadillac as the luxury sales leader. So, it was natural the third generation LS would
continue to take the fight to BMW & Mercedes-Benz. The engine bore was increased to 4.3L, giving
faster acceleration thanks to a better engine management system. With a lower drag of just
0.25 the new LS430 could get to 60 in 6.7s. The interior took inspiration from luxury hotels,
and the first-class seats of British Airways and Japan Airlines. Those luxurious seats could be
both heated and cooled. The power massaging rear seats had their own audio controls. The air vents
automatically moved airflow away from the driver and passenger when the interior temperature had
stabilised, and the new DVD-based navigation system was voice controlled. Once again, the
wheelbase was extended, giving a little more interior space, but the boot space didn’t suffer
thanks to a repositioning of the fuel tank. It got laser-based adaptive cruise control,
that would brake as well as accelerate. The 2003 update swapped this out for a radar
version that worked in all weather conditions. The update also featured a pre-collision
system with autonomous braking, and knee airbags for both driver and passenger. A 6th
gear gave a little better acceleration. Like the 1960s Citroën DS, the headlights
would swivel in the direction of vehicle turns. The third generation allowed Lexus to stay ahead
of its German competition, and move ahead of its Japanese rivals, with Nissan’s luxury brand
Infiniti dropping the Q45 in 2006. But this wasn’t just about US sales. Since Lexus debuted
in 1989 they’d been expanding to more countries. A notable exception was Japan where the Lexus
LS was still known as the Toyota Celsior. This was in part due to Japan’s economic problems
in the 1990s, the so called “lost decade”, but by 2003 Toyota felt confident enough to
launch the Lexus brand in their home country. Toyota had always struggled in Europe,
despite building factories there, and Lexus was no exception. European buyers still
preferred domestic luxury brands. But worldwide expansion continued, with Lexus making gains in
areas of new wealth such as China, the Middle East and Russia. By 2005 Lexus was the number 1 luxury
import in both Taiwan and South Korea. Two years later it was the number 1 luxury import in China.
The design direction for the next generation car was shown through the 2005 LF-Sh or
Lexus Future-Sedan hybrid concept. The new design language, known as “L-finesse”
would be carried forward to the fourth-generation LS, which launched a year later. Lexus spent big
on the new car - every part was completely new. The number of laser welds doubled to
create the lightest, strongest body yet. The brand new engine was larger at 4.6L, producing
35% more power through a new 8-speed automatic, and in 2007 the first all-wheel drive model
appeared. The new LS came in short and long wheelbase versions, but Toyota played to their
strengths by adding a hybrid version, borrowing the technology from the popular Toyota Prius. The
hybrid drivetrain added weight, but improved the fuel economy to over 30 mpg (9.3 l/100km, 25.3
mpg US). Lexus clearly felt hybrid was a key advantage – not something the competition could
quickly replicate, and by 2009 they had plans to bring hybrid technology to the entire Lexus range.
For the first time in an automobile, the climate control system featured infrared monitoring
of the occupant’s body temperature. The new car got features that were ground-breaking
then, but humdrum today such as automated parallel parking assist, lane departure warning
and a driver monitoring system. LS owners could now finally hold their head up to minivan
owners with a DVD player in the back seat! But DVD entertainment aside, Lexus was again
throwing money at the LS programme to deal a knockout blow to the competition. Sales
certainly spiked when it launched, and the 12,000 pre-orders in Japan must have helped,
but by the first facelift in 2009 sales, at least in the US, were barely higher
than BMW & Mercedes. Maybe the price, now almost the same as its German rivals, or maybe
a series of high-profile recalls were dragging on sales. Supply of Lexus LS models also took a hit
from the 2011 Japanese earthquake and tsunami. The 2009 facelift was fairly minor, but the
second facelift in 2012 saw a much bigger update. The most noticeable change on the
outside was the new larger grille, but it was inside where the biggest changes lay. It received
a significant dashboard update, along a less-than intuitive version of BMW’s i-Drive system.
When Lexus had launched the original LS400 in 1989 they were careful to place the
car as a luxury model for smooth, effortless, unrushed driving. This was at odds with BMW
& Mercedes who began to lean more heavily on sporty models for the extra caché it gave their
image, and the stratospheric money they could charge for “M” and “AMG” versions. Lexus realised
they were missing a trick, and so launched an "F Sport” model of the LS. It got sportier wheels,
bigger brakes and a lower ride height, but it was no faster, and didn’t worry its competition.
In fact, the competition were now more than a match for the LS, with both BMW and Mercedes
regularly outselling it in the US. But sales for all luxury saloons were dropping as customers
started snapping up SUVs and crossovers. Despite dwindling sales, Lexus could amortise
the cost of new parts across its entire range, so despite lower sales Lexus hoped the next
generation car could still recoup the cost of development, sharing a platform with the Toyota
Crown, Mirai and Lexus LC. The shape was again previewed as the LF-FC concept, with the “FC”
standing for “fuel cell” – something Toyota had been refining for many years with the hope of
widespread adoption. But the 2017 production car went for the tried and tested engine plus hybrid
options of the previous generation, albeit with a smaller V6 instead of the previous V8. Yet the
smaller 3.5L engine got more power than the old 4.6L, and the hybrid model got a quite phenomenal
45mpg (6.2 l/100km, 37.9 mpg US), around the same as the most fuel-efficient first-generation
Austin Metro, which was also lauded for its fuel efficiency. To show how aerodynamics and
engines had developed in 40 years, the Lexus was almost 3 times heavier, and instead of getting
to 60 in 18 seconds, it could do it in about 5! Inside the customer could get optional fancy
glass door inserts with pleated fabric. The lateral fins on the dashboard were designed to
evoke the Japanese koto stringed instrument. Shiatsu massaging came to the front seats. To
provide the quietest and most serene cabin Lexus went to every level to reduce noise, even
creating wheels with a channel that reduced vibrations. This was still intended to be
the pinnacle of Lexus engineering, and a car to take on the best the world had to offer.
The LS received its customary mid-cycle facelift in 2020, with a raft of small changes. The
largest change customers would likely notice was the infotainment system which finally received
Apple Carplay and Android Auto support, meaning it could now do what the Chevrolet Spark could do
- the cheapest car sold in the USA! For all the money Lexus and other luxury car makers spent
on custom infotainment systems, they couldn’t beat the money Google and Apple poured into
improving the entry-level phone in your pocket. Over the last 10 years sales of the
LS had dropped while at the same time other models in the Lexus range had gained
prominence. In the USA, their largest market, the LS accounted for only 1% of all Lexus sales.
Lexus might be sharing platforms and components, but with sales like this the writing may be on the
wall for the car that kicked off the Lexus brand. Since its inception Lexus have stuck to
their “Relentless Pursuit of Perfection”, striving to make the LS the finest
car money can buy. It can, of course, still replicate the champagne
glass trick of the original car. It was a reaction to people’s view that Japan
could only make basic cars, and an attempt by the US to limit Japanese expansion. It had
the opposite effect of course! While Lincoln and Cadillac sales have seen a steady decline,
Lexus has seen a meteoric rise thanks in part to a growth of luxury car sales. But Lexus hasn’t
managed to overcome the dominant German luxury car makers who can still get people to pay more
for their cars. And while Lexus has been able to sell well in North America, they haven’t made much
of a dent on the German luxury makers home turf. But they have managed to eat into their
bottom line. When adjusted for inflation, the latest LS is even cheaper than
the original model. But to compete, the BMW 7-series and Mercedes-Benz S-Class
have had to take a hatchet to their prices. Lexus attempted to make the best car in the world
in the 1980s, and it came close. Some have also tried to crack the luxury market and failed – the
Volkswagen Phaeton springs to mind – and there are always new pretenders to the throne waiting to
usurp the established players, but Lexus can be credited with dominating the luxury market in just
2 years. That’s a record that may never be beaten, and it’s all thanks to 60 designers, 1,400
engineers and 2,300 technicians who dared to dream of making the best car in the world. To hear the story of Volkswagen’s attempt to make a luxury car, check out the video on the right.
And if you want to hear more about the Lexus LS story, check out the Optional Extra video. Thanks
for watching and I’ll see you in the next video.
I wish big sedans would make a comeback. I'm tired of looking at the bubble-shaped SUVs that all look the same.
One of the all time greats.
Its a bit weird how overhyped these cars have become. They are good cars and can be reliable with proper maintenance, but so can many others. Most enthusiasts didnt care about these for decades...and then youtubers got ahold of them. The used market now is also weird. There's total clapped out ones barely running and there's really nice ones that people with too much money spend big for. There seems to be very little in between. Maybe I just miss the days of buying one from an elderly person with actual service records and no used car salesman pitch. :(
They’re gonna be sought-after classics to the degree that an 80s Benz are, for making Lexus a household name.
But modern Lexus kinda seems like an underachiever compared to 90s Lexus. Mercedes and BMW is outselling Lexus by some margin per year in the US.