is the luxury vehicle division of the Japanese automaker Toyota Motor Corporation. The Lexus brand is marketed in more than 90 countries and territories worldwide and is Japan's largest-selling make of premium cars. It has ranked among the 10 largest Japanese global brands in market value. Lexus has been headquartered in Shimoyama, Aichi, in Japan since 2024. Operational centers are located in Brussels, Belgium, and Plano, Texas, United States.
Created about the same time that Japanese rivals Honda and Nissan created their Acura and Infiniti luxury divisions respectively, Lexus originated from a corporate project to develop a new premium sedan, code-named F1, which began in 1983 and culminated in the launch of the Lexus LS in 1989. Subsequently, the division added sedan, coupé, convertible and SUV models. Lexus did not exist as a brand in its home market until 2005, and all vehicles marketed internationally as Lexus from 1989 to 2005 were released in Japan under the Toyota marque and an equivalent model name. In 2005, a hybrid version of the RX crossover debuted and additional hybrid models later joined the division's lineup. Lexus launched its own F marque performance division in 2007 with the debut of the IS F sport sedan, followed by the LFA supercar in 2009.
Lexus vehicles are largely produced in Japan, with manufacturing centered in the Chūbu and Kyūshū regions, and in particular at Toyota's Tahara, Aichi, Chūbu and Miyata, Fukuoka, Kyūshū plants. Assembly of the first Lexus produced outside the country, the Canadian-built RX 330, began in 2003. Following a corporate reorganization from 2001 to 2005, Lexus began operating its own design, engineering and manufacturing centers.
Since the 2000s, Lexus has increased sales outside its largest market, the United States. The division inaugurated dealerships in the Japanese domestic market in 2005, becoming the first Japanese premium car marque to launch in its country of origin. The brand has since debuted in Southeast Asia, Latin America, Europe and other regions, and has introduced hybrid vehicles in many markets.
History
1980s: The F1 project 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, called the Acura 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.
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 evokes 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.
Launch The F1 project was completed in 1989, involving 60 designers, 24 engineering teams, 1,400 engineers, 2,300 technicians, 220 support workers, approximately 450 prototypes and more than $1 billion in costs. The resulting car, the Lexus LS 400, had a design that shared no major elements with previous Toyota vehicles, with a new 4.0 L V8 gasoline engine and rear-wheel drive. The car debuted in January 1989 at the North American International Auto Show in Detroit and official sales of the vehicle began the following September at a network of 81 new Lexus dealerships in the U.S. The LS 400 was sold along with the smaller ES 250, a rebadged version of the Japanese market Toyota Camry Prominent/Toyota Vista. The launch of Lexus was accompanied by a multimillion-dollar advertising campaign.
The LS 400 was praised for its quietness, well-appointed and ergonomic interior, engine performance, build quality, aerodynamics, fuel economy and value. However, it was criticized by some automobile columnists for derivative styling and a suspension regarded as too compromising of handling for ride comfort. In some markets it was priced against mid-size, six-cylinder Mercedes-Benz and BMW models. It was rated by Car and Driver magazine as better than the higher-priced Mercedes-Benz 420 SEL and BMW 735i in terms of ride, handling and performance. The LS 400 also won motoring awards from automotive publications including Automobile Magazine and Wheels Magazine.Davis, David E. 1990 All-Stars, Automobile Magazine. (1990-01). Lexus quickly established customer loyalty and its debut was generally regarded as a shock to existing luxury marques. BMW's and Mercedes-Benz's U.S. sales figures dropped 29 percent and 19 percent, respectively, with BMW executives accusing Lexus of dumping in that market, while 35 percent of Lexus buyers traded in a Lincoln or Cadillac.
In December 1989, Lexus initiated a voluntary recall of all 8,000 LS 400s based upon two customer complaints over defective wiring and an overheated brake light. A 20-day operation to replace the parts on affected vehicles included technicians to pick up, repair and return cars to customers free of charge, and also flying personnel and renting garage space for owners in remote locations. This response was covered in media publications and helped establish the marque's early reputation for customer service.
By the end of 1989, a total of 16,392 LS 400 and ES 250 sedans were sold in the four months following the U.S. launch. Although sales had begun at a slower pace than expected, the final tally matched the division's target of 16,000 units for that year. Following initial models, plans called for the addition of a sports coupe along with a redesigned ES sedan.
1990s: Growth and expansion
In 1990, during its first full year of sales, Lexus sold 63,594 LS 400 and ES 250 sedans in the U.S., the majority being the LS model. That year, Lexus also began limited exports to the United Kingdom, Switzerland, Canada and Australia. In 1991, Lexus launched its first sports coupe, the SC 400, which shared the LS 400s V8 engine and rear-wheel drive design. This was followed by the second generation ES 300 sedan, which succeeded the ES 250 and became Lexus' top seller. At the conclusion of 1991, Lexus had become the top-selling premium car import in the U.S., with sales reaching 71,206 vehicles. That year, Lexus ranked highest in J.D. Power and Associates' studies on initial vehicle quality, customer satisfaction and sales satisfaction for the first time. The marque also began increasing U.S. model prices past those of comparable American premium makes, but still below high-end European models. By 1992, the LS 400's base price had risen 18 percent.
In 1993, Lexus launched the mid-size GS 300 sports sedan, based on the Toyota Aristo using the Toyota "S" platform from the Toyota Crown, which had sold for two years prior in Japan. The GS 300 was priced below the LS 400 in the marque's lineup. That same year, Lexus became one of the first marques to debut a certified pre-owned program, with the aim of improving trade-in model values. The marque introduced the second generation LS 400 in 1994. In May 1995, sales were threatened by the U.S. government's proposal of 100 percent tariffs on upscale Japanese cars in response to the widening U.S.-Japan trade deficit. SUVs were exempt from the proposed sanctions. Normal sales operations resumed by late 1995 when the Japanese auto manufacturers collectively agreed to greater American investments and the tariffs were not enacted.