The Start of Lexus

The F1 Project

Lexus redefined what luxury meant in 1989, when they unveiled their first ever model, the LS 400. It shook the whole luxury car segment with how good and what a steal it is compared to the competitors. The Lexus brand was created around the same time as Japanese rivals Nissan and Honda developed their Infiniti and Acura premium brands. The Japanese government imposed voluntary export restraints for the U.S. market, so it was more profitable for Japanese automakers to export more expensive cars to the U.S.

In 1983, Toyota chairman Eiji Toyoda issued a challenge to build the world's best car. The project, code-named F1 (“Flagship One”) developed the Lexus LS 400 to expand Toyota's product line in the premium segment. The F1 project followed the Toyota Supra sports car and the premium Toyota Mark II models. Both the Supra and Mark II were rear-wheel drive cars with a powerful 7M-GE or 7M-GTE inline-six engine. The largest sedan Toyota built at the time was the limited-production, 1960s-vintage Toyota Century, a domestic, hand-built limousine, and V8-powered model, followed by the inline-six-engined Toyota Crown premium sedan. The Century was conservatively styled for the Japanese market and along with the Crown not slated for export after a restyle in 1982. The F1 designers targeted their new sedan at international markets and began development on a new V8 engine. 

Japanese manufacturers exported more expensive models in the 1980s due to voluntary export restraints negotiated by the Japanese government and U.S. trade representatives that restricted mainstream car sales. In 1986, Honda launched its Acura marque in the U.S., influencing Toyota's plans for a luxury division. The initial Acura model was an export version of the Honda Legend, itself launched in Japan in 1985 as a rival to the Toyota Crown, Nissan Cedric/Gloria and Mazda Luce In 1987, Nissan unveiled its plans for a premium brand, Infiniti and revised its Nissan President sedan in standard wheelbase form for export as the Infiniti Q45, which it launched in 1990. Mazda began selling the Luce as the Mazda 929 in North America in 1988 and later began plans to develop an upscale marque to be called Amati, but its plans did not come to fruition. 

Toyota researchers visited the U.S. in May 1985 to conduct focus groups and market research on luxury consumers. During that time, several F1 designers rented a home in Laguna Beach, California, to observe the lifestyles and tastes of American upper class consumers. Meanwhile, F1 engineering teams conducted prototype testing on locations ranging from the German autobahn to U.S. roads. Toyota's market research concluded that a separate brand and sales channel were needed to present its new sedan, and plans were made to develop a new network of dealerships in the U.S. market.

Brand Development

In 1986, Toyota's longtime advertising agency Saatchi & Saatchi formed a specialized unit, Team One, to handle marketing for the new brand. 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. While Alexis quickly became the front runner, concerns were raised that the name applied to people more than cars (being associated with the Alexis Carrington character on the popular 1980s prime time drama Dynasty). As a result, the first letter was removed and the "i" replaced with a "u" to morph the name to Lexus. Front quarter view of a sedan parked on a street. 1989 LS 400 sedan was the first Lexus model. Theories of the etymology of the Lexus name have suggested it is the combination of the words "luxury" and "elegance," and that it is an acronym for "luxury exports to the U.S." According to Team One interviews, the brand name has no specific meaning and simply denotes a luxurious and technological image. Prior to the release of the first vehicles, database service LexisNexis obtained a temporary injunction forbidding the name Lexus from being used because it might cause product confusion. The injunction threatened to delay the division's launch and marketing efforts. The U.S. appeals court lifted the injunction, deciding that there was little likelihood of confusion between the two products. The original Lexus slogan, developed after Team One representatives visited Lexus designers in Japan and noted an obsessive attention to detail, became "The Relentless Pursuit of Perfection." Three firms were involved in the final phase of logo development: Saatchi & Saatchi, Molly Designs and Hunter/Korobkin, Inc. The finished logo was a combination of two firms’ final designs: the Lexus logo typeface came from Saatchi & Saatchi and the “L” was Hunter/Korobkin, Inc.’s design. According to Toyota, the automaker made some refinements so the logo would be easier to manufacture, rendering it using a mathematical formula. The first teaser ads featuring the Lexus name and logo appeared at the Chicago, Los Angeles and New York auto shows in 1988.