History
[edit] The F1 project
In 1983, Toyota Chairman Eiji Toyoda summoned a secret meeting of company executives, to whom he posed the question, “Can we create a luxury vehicle to challenge the world's best?”[12][3] This question prompted Toyota to embark on a top-secret project, codenamed F1 (“Flagship” and “No. 1 vehicle”).[13] The F1 project, which eventually became known as the Lexus LS 400, aimed to develop a luxury car that would expand Toyota’s product line, giving it a foothold in the premium segment and offering both longtime and new customers an upmarket product.[14] The F1 project followed the success of the Toyota Supra sports car and the luxury Toyota Cressida models.[15] Both the Supra and Cressida were rear-wheel drive cars with a powerful 7M-GE/7M-GTE engine. The U.S. launch of the Acura marque by Honda three years prior also influenced Toyota in its plans for a luxury division.[16] Around this same time, Nissan would unveil plans to create its own luxury division, Infiniti, while Mazda also considered developing a luxury division, to be called Amati.[17]
Toyota researchers visited the U.S. in May 1985 to conduct focus groups and market research on luxury consumers.[18] That summer, several F1 designers rented a home in Laguna Beach, California, to observe the lifestyles and tastes of American upper-class consumers.[18] Toyota’s market research concluded that a separate brand and sales channel was needed to present its new luxury flagship, and plans were made to develop a new network of dealerships in the U.S. market.[19]
[edit] Brand development
In 1986, Toyota’s longtime advertising agency Saatchi & Saatchi formed a specialized unit, Team One, to handle marketing for the new luxury brand.[20] Image consulting firm Lippincott & Margulies was hired to develop a list of 219 prospective names; Vectre, Verone, Chaparel, Calibre and Alexis were chosen as top candidates.[21] While Alexis quickly became the front runner (also associated with the Alexis Carrington character on the popular 1980s primetime drama Dynasty) and later morphed to Lexus,[21] the name has been attributed to the combination of the words "luxury" and "elegance."[22] According to Team One interviews, the name has no specific meaning and simply denotes a luxurious and technological image,[21] although Lexus in Australia claim the original name is short for Luxury Export to United States. (LExUS).
Just prior to the release of the first vehicles, database service LexisNexis obtained a temporary injunction forbidding the name Lexus from being used as they stated it might cause confusion.[23] Upon reflection, the court lifted the injunction, deciding that there was a low likelihood of confusion between the two products.[23]
The original Lexus slogan, developed after Team One representatives visited Lexus designers in Japan and noted their obsessive attention to detail, became "The Relentless Pursuit of Perfection."[24]
The Lexus logo was developed by Molly Designs and Hunter Communications.[25][26] The final design for the Lexus logo featured a stylized “L” within an oval, and according to Toyota was rendered using a precise mathematical formula.[21] The first teaser ads featuring the Lexus name and logo, designed by Team One, appeared at the Chicago, Los Angeles, and New York auto shows in 1988.[27]
[edit] Launch
In 1989, after an extended development process involving 60 designers, 24 engineering teams, 1,400 engineers, 2,300 technicians, 220 support workers, around 450 prototypes, and over $1 billion in costs, the F1 project was completed.[28] The resulting flagship, the Lexus LS 400, had a unique design, sharing no major elements with previous Toyota vehicles, with a new 4.0 L V8 gasoline engine and rear-wheel drive.[29][30] Testing locations for the LS 400 included the German autobahn.[31]
The LS 400 debuted in January 1989 at the North American International Auto Show in Detroit.[17] The following September, Lexus vehicles officially went on sale at a network of 81 new Lexus dealerships across the U.S.[32] The LS 400 was sold along with a smaller sibling, the Toyota Camry-based ES 250.[31] The launch of Lexus was heralded by a multi-million dollar advertising campaign in both television and print media.[33] Lexus subsequently began sales in the United Kingdom, Switzerland, Canada, and Australia starting in 1990.[31][34]
The LS 400 was widely praised for its silence, well-appointed and ergonomic interior, engine performance, build quality, aerodynamics, fuel economy, and value,[31][35] though it was criticized by some automobile columnists for anonymous styling and a suspension regarded as too compromising of handling for ride comfort.[17][31] The LS 400 debuted at $38,000 in the U.S. (in some markets, it was priced against mid-sized six cylinder Mercedes-Benz and BMW models),[36] and was rated by Car and Driver magazine as better than both the $63,000 Mercedes-Benz 420 SEL and the $55,000 BMW 735i in terms of ride, handling and performance.[37] It was generally regarded as a major shock to the European marques; BMW and Mercedes-Benz's U.S. sales figures dropped 29% and 19%, respectively, with the then-BMW chairman Eberhard von Kuenheim accusing Lexus of dumping in that market.[37] The LS 400 also won several major motoring awards when released.[38][39]
In 1990, during its first full-year of sales, Lexus sold 63,594 LS 400 and ES 250 sedans in the U.S.,[40] the vast majority being of the LS model.[40] By 1991, sales had increased to 71,206 cars in the U.S. market,[40] making Lexus the top-selling luxury import in the U.S.[41] That same year, Lexus earned first place in J.D. Power’s studies on initial vehicle quality, customer satisfaction, and sales satisfaction.[42]
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