Further observations on Lexus’ 1989 gamechanger.
Attempting to second-guess the United States customer has been the rock innumerable carmakers have perished upon over the past fifty years or so. It ought to be quite simple really. Large capacity engines, plenty of equipment, a sense of visual definition or style coupled with ease of operation. Durability too, since vehicles are likely to do large mileages in often hostile climatic conditions amid owners sometimes averse (it’s been alleged) to the prospect of preventative maintenance.
So much for generalisations, but those who have wilted under America’s often unyielding glare have largely failed to sufficiently cover the basics. Not so the Japanese, who like the Europeans before them learnt the hard way not only how difficult the US market can be to crack, but also how lucrative it could be if you carried out the necessary due diligence.
In the 1950s, Jaguar were for a time the top-selling imported car brand in the United States. Keen to capitalise on this, the carmaker began work in 1957 upon an all-new model, aimed primarily at the US market. Jaguar founder, Sir William Lyons was an autocrat, who preferred to work by instinct, in the belief that he had a sound idea of what the customer wanted.
Based on intelligence gleaned from occasional visits to the US and from wish lists provided from his American concessionaires, Browns Lane developed Mark Ten, the most ostentatious, most US-centric Jaguar ever. But Lyons’ market intelligence proved to be flawed and the car misfired badly, leaving them with a hugely expensive model programme whose costs could not be amortised. Ditto Peugeot, who a decade later also got their calculations wrong with the 604 model. US customers didn’t necessarily want a larger, more opulent car, they wanted a better 504.
Unlike Jaguar in the 1950s, and to a lesser extent, PSA in the 1970s, Toyota was not run along autocratic lines – this not being the corporate Japanese way. So when senior management at Toyota City approached to the issue of building a luxury car aimed primarily at American (and European) tastes, they didn’t simply rely upon gut feeling. They set up a committee to establish the parameters, carrying out huge quantities of market research, which included sending a number of senior engineers to live in California to absorb the lifestyle of their target customer. Nothing was left to chance, because only when fully appraised of the facts could they arrive at a conclusion.
The background to Toyota’s Circle F programme was dominated by two significant factors. First, the realisation by Japanese carmakers that punitive import restrictions into the US and European markets were unlikely to be relaxed, and that the only way around this was to offer more upmarket, more profitable vehicles. The second factor was that on the back of a stock-market and property fuelled economic boom in Japan, credit was both cheap and freely available to businesses to invest as they saw fit.
Toyota already had decades of experience in both the United States and Europe to draw upon, so they knew the pitfalls. By 1984, when development of the LS 400 began in earnest, Toyota had already begun to cast off its reputation for engineering conservatism, building cars which genuinely impressed an often prejudiced motor press, if still lacking that final sprinkle of charisma.
Lead engineer, Ichiro Suzuki was in the enviable position of being able to select his best people for the Circle F programme, as well as drawing upon the not inconsiderable resources of a giant multi-national car company, and thanks to Japan’s credit bonanza, an almost unlimited budget. Certainly, cost constraints were out the window – the rationale being that the best could only be achieved if everything was on the table.
But all the resources in the world are no use if you do not know exactly where the destination lies, and can marshal your resources to get there. According to Lexus, over the timescale of the programme, 60 designers, 1,400 engineers split into 24 teams, 2,400 technicians and over 200 support workers worked on the car. Managing that number of people, without swamping the project or losing focus requires both leadership and sound judgement. Suzuki it seems was such a character, and as such deserves tremendous credit, a matter noted to this author by his former Jaguar opposite number.
Reviewers marvelled at how sorted the LS400 felt from the off, one journalist describing the driving experience as if Toyota had been building the car for around a decade, rather than being an all-new design. Another simply stated, “Toyota nailed it”. But the LS400 wasn’t flawless, there being some very minor early build-related issues. However, the exemplary manner in which Lexus handled this potential PR reversal proved a textbook case of going above and beyond previously held nostrums of customer care, laying the groundwork for their pre-eminent reputation in this arena.
Some have since suggested that Toyota were fortunate with the timing of Lexus, coming as it did to the US market in the wake of arguably the worst decade in the domestic industry’s history from both a product, perceived quality and durability perspective. As America’s premier luxury marques, already under pressure from imports, the arrival of Lexus hit both Cadillac and Lincoln hard. And with buyers already familiar with more upmarket products from Japan, it wasn’t as huge a leap for them perception-wise than it might have been for their European equivalents, who were also more hidebound in marque loyalties – to say nothing of brand snobbery.
Certainly, even if the LS400 never quite caught on with the European customer, its impact was felt acutely by all its major prestige rivals who were forced to re-evaluate their entire offer – particularly from a quality, durability, equipment, value for money and customer service perspective.
But timing, like luck is often commensurate with hard work and application. Basically, Toyota, having definitively established what was required, worked at it and worked at it until they had arrived at a conclusion they were satisfied with. And while some are equally content to dismiss LS 400 as simply a Camry on steroids, such was the engineering depth within the car, that such accusations turn to dust when faced with the reality of Toyota’s achievement.
Because if you want to make it big in America, you’ve got to do your homework. Even then, it requires hard graft and an unswerving focus. Relying on guesswork and a mentality of ‘if it works for us, it’ll work for them’ simply isn’t going to cut it. Because like most overnight successes, the Lexus LS400 was decades in the making.