Lexus luxury cars join the Toyota stable

While Toyota built good near-luxury cars, sales of the Cressida and Crown were not especially strong, especially given the brisk trade in Corollas and Camrys. In the 1980s, when Toyota seriously looked at its lagging luxury sales, Lincoln and Cadillac had both fallen from grace; Lincoln was relegated to the limousine and car-service trade, and Cadillac had destroyed its reputation with the 4-6-8 engine and the barely-disguised Cavalier clone, the Cimarron. Chrysler had started to plunge downmarket in the 1970s, and Lee Iaccoca was already erasing any prestige the brand had by making thinly disguised Chrysler versions of entry-level Plymouths. Mercedes' quality was fairly low, Audi was suffering from the "unintended acceleration" debacle, and, in short, the competition was in tatters. It was time for Toyota to create both a luxury car and a luxury brand to sell it with — the luxury brand mainly because Americans had become accustomed to brands with relatively narrow ranges (GM had no less than five brands to reach different markets; Ford and Chrysler both had three.)

In the early 1980s, the F1 Project and assigned to an engineering team of 1,400 engineers, 2,300 technicians, 60 designers, and 220 support people under the leadership of Shoiji Jimbo and Ichiro Suzuki. Market research for the Lexus name in the United States started in 1985, with Shoiji Jimbo attending focus groups and interviewing dealers. The first running prototype appeared in July 1985, with an astounding 450 running prototypes built as Lexus spared no expense to beat Mercedes and other luxury marques - which it did, decisively. In 1986, tests were conducted on public roads in the US and Germany. Finally, in 1987, the final design was approved after eight presentations to management.

The LS400, the first Lexus, finally appeared in 1989. It was an immediate hit thanks to its high levels of luxury and reliability, at a lower cost than Mercedes' far less reliable and luxurious models; the low ebb of the competition also helped Lexus to make a splash. Lexus would remain the leader in passenger car comfort and reliability through to the 21st century, though sales of other models - particularly the IS - lagged.