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Lexus is the luxury vehicle division of Japanese automaker Toyota Motor Corporation. It was founded in 1989 and has become Japan’s largest-selling make of premium cars. The division’s world headquarters are located in Toyota, Aichi, Japan, with operational centers in Brussels, Belgium, and Torrance, California and the United States.

Creating Lexus

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?” This question prompted Toyota to embark on a top-secret project, code-named F1 (“Flagship” + “No. 1 vehicle”).

The F1 project, whose finished product was ultimately the Lexus LS 400, aimed to develop a flagship sedan 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. The F1 project followed the success of the Toyota Supra sports car and the premium Toyota Cressida models. Both the Supra and Cressida were rear-wheel drive cars with a powerful 7M-GE/7M-GTE engine.

The opportunity for Japanese manufacturers to export more expensive models had arisen with the 1980s voluntary export restraints, negotiated by the Japanese government and U.S. trade representatives, restricting mainstream car sales. In 1986, Honda launched its Acura marque in the U.S., influencing Toyota’s plans for a luxury division. Around the same time, Nissan would unveil plans to create its own premium brand, Infiniti, while Mazda also considered developing an upscale marque, to be called Amati.

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. Toyota’s market research concluded that a separate brand and sales channel were needed to present its new flagship sedan, and plans were made to develop a new network of dealerships in the U.S. market.

Choosing A Name

In 1986, Toyota’s longtime advertising agency Saatchi & Saatchi formed a specialized unit, Team One, to handle marketing for the new premium 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 it later morphed to Lexus. This name has been attributed to the combination of the words “luxury” and “elegance,” and another theory claims it is an acronym for “luxury exports to the U.S.” According to Team One interviews, the name has no specific meaning and simply denotes a luxurious and technological image.

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. The injunction threatened to delay the division’s launch and marketing efforts. Upon reflection, a 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 their obsessive attention to detail, became “The Relentless Pursuit of Perfection.” The Lexus logo was developed by Molly Designs and Hunter Communications. 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. 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.


In 1989, Lexus showcased the smoothness of its V8 engines by placing champagne glasses on the hood of a revving LS 400.

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 US dollars in costs, the F1 project was completed. The Lexus LS 400, had a unique design that shared no major elements with any previous Toyota vehicles and its rear-wheels were driven by an all new 4.0 Liter V8 engine.

The LS 400 had its debut at the North American International Auto Show in Detroit. The following September, Lexus vehicles officially went on sale at a network of 81 new Lexus dealerships across the U.S. The launch of Lexus was heralded by a multi-million dollar advertising campaign in both television and print media.

At its launch, the LS 400 was widely praised for its quietness, well-appointed and ergonomic interior, engine performance, build quality, aerodynamics, fuel economy, and value, although it was criticized by some automobile columnists for derivative styling and a suspension regarded as too compromising of handling for ride comfort. The LS 400 started at US$38,000 in the U.S. and was rated by Car and Driver magazine as better than both the US$63,000 Mercedes-Benz 420 SEL and the US$55,000 BMW 735i in terms of ride, handling, and performance.

The LS 400 also won major motoring awards from publications including Automobile Magazine and Wheels Magazine. The launch of Lexus had a shocking impact on BMW and Mercedes-Benz’s U.S. sales, figures dropped 29% and 19%, respectively, with BMW executives accusing Lexus of dumping in that market.

In December 1989, Lexus initiated a voluntary recall of all 8,000 LS 400s sold to date, based upon two customer complaints over defective wiring and an overheated brake light. In a sweeping 20-day operation which replaced the parts on all affected vehicles, Lexus sent technicians to pick up, repair, and return cars to customers free of charge, and also flew in personnel and rented garage space for owners in remote locations. This response was lauded in media publications and helped establish the marque’s early reputation for customer service.

By the end of 1989, 16,392 LS 400 and ES 250 sedans had been 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 the initial models, plans called for the addition of a sports coupe along with a redesigned ES sedan.

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 vast 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 400’s 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’s top seller. At the conclusion of 1991, Lexus had become the top-selling luxury car import in the U.S., with sales reaching a total of 71,206 vehicles. That year, Lexus ranked highest in J.D. Power and Associates’ studies on initial vehicle quality, customer satisfaction, and sales satisfaction. 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% to nearly US$45,000.

In 1993, Lexus launched the GS line, that was based on the Toyota Aristo, which had sold for two years prior in Japan. The GS 300 sports sedan was priced below the LS 400 in the marque’s lineup. That same year, Lexus also became one of the first marques to debut a certified pre-owned program, with the aim of improving trade-in model values.

In 1994, the marque introduced the second generation LS 400, a complete redesign of its flagship model.

In May 1995, sales were threatened by the U.S. government’s proposal of 100% tariffs on Japanese luxury 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.

In 1996, Lexus debuted its first sport utility vehicle, the LX 450. The marque’s plans for developing an SUV model had accelerated during the U.S.-Japan tariff discussions of 1995.

In 1998, Lexus added the first luxury-branded crossover SUV, the RX 300, and the second generation GS 300 and GS 400 sedans. The RX crossover targeted suburban buyers who desired an upmarket SUV but did not need off-road capability and it was particularly successful. By year’s end, the RX 300 had become the marque’s top-selling model, ahead of the ES 300.

In 1999, Lexus recorded its one-millionth vehicle sold in the U.S. market, and was ranked the top-selling luxury automobile make in the U.S. overall.

Hybrids and F models

In 2000, Lexus introduced a new entry-level sedan, the IS 300. In 2001, the marque debuted its first convertible, the SC 430, and the third generation LS 430. The GX 470 mid-size SUV debuted in 2002, followed by the second generation RX 330 in 2003.

In 2004, Lexus recorded its two-millionth U.S. vehicle sale. The following year, Lexus debuted the first luxury-branded production hybrid SUV, the RX 400h. The vehicle used a Lexus Hybrid Drive system which combined gasoline and electric motors for increased power, fuel efficiency, and lower emissions relative to gasoline-only equivalents.

In 2005, Lexus completed a full organizational separation from parent company Toyota, with dedicated design, engineering, training, and manufacturing centers working exclusively for the division. This effort coincided with Lexus’s launch in its home market of Japan and an expanded global launch of the brand in major world markets. Executives aimed to grow the marque’s sales outside of its largest market in the U.S. The next generation IS, GS, and LS sedans were subsequently designed as “global models” for worldwide markets.

In 2006, Lexus unveiled the GS 450h, a V6 hybrid performance sedan, along with the fourth generation flagship LS line, comprising both standard and long-wheelbase V8 (LS 460 and LS 460 L) and hybrid (LS 600h and LS 600h L) versions. The LS 600h L subsequently went on sale as the most expensive luxury sedan ever produced in Japan, with a sticker price of approximately US$125,000. Lexus sales reached 475,000 vehicles worldwide during 2006.

In 2007, Lexus announced a new F marque performance division, which would produce racing-inspired versions of its performance models. The first of this line, the IS F, made its debut at the 2007 North American International Auto Show, accompanied by a supercar concept, the LF-A. By the end of 2007, Lexus’ annual U.S. sales had risen to 329,177 vehicles, and total worldwide sales reached 500,000 vehicles.

In 2008, amidst the global recession, U.S. sales dropped 21% to 260,087, and worldwidel sales fell 16% to 435,000.

In mid-2009, the marque launched the HS 250h, a dedicated hybrid sedan for North America and Japan. The RX 450h, the second generation hybrid SUV replaced the earlier RX 400h, and later that year debuted the US$375,000 production LFA supercar. In terms of volume, Lexus was the number-one-selling luxury car marque in the historically largest automotive market for the past decade and ranked as the fourth-largest luxury car brand in the world by volume.

Recent developments

At the beginning of 2010, Lexus underwent a gradual sales recovery in North America and Asia as the marque focused on adding hybrids and new model derivatives. Sales in the U.S. for the first half of 2010 held steady during the 2009–2010 Toyota vehicle recalls, several of which included Lexus models. The ES 350 and certain IS models were affected by a recall for potentially jamming floor mats; the New York Times found more federal acceleration reports per-vehicle for the marque versus parent company Toyota, while NPR determined the reports to be generally rare, with comparable rates at multiple makes.

The redesigned GX 460 was also voluntarily recalled in April 2010 for a software update, one week after Consumer Reports issued a recommendation not to buy the SUV following the slow stability control response to a high-speed emergency turn. Although it knew of no reported incidents, the U.S. publication warned of a possible rollover risk, and the GX 460 received updated stability control software.

At the 2010 Geneva Motor Show, Lexus introduced the CT 200h, a compact four-door hybrid hatchback initially designed for the European market. The CT 200h was scheduled to go on sale in Europe in the latter half of 2010, with exports to follow in the U.S. and other regions worldwide.

How The Models Are Named

Lexus production models are named alphanumerically using two-letter designations followed by three digits. The first letter indicates relative status in the Lexus model range (ranking), and the second letter refers to car body style or type (e.g. LS for ‘luxury sedan’). The three digits indicate engine displacement in liters multiplied by a factor of one hundred (e.g. 350 for a 3.5 L engine). A space is used between the letters and numbers. The same letter may be used differently depending on the model; ‘S’ can refer to ‘sedan’ or ‘sport’ (e.g. in LS and SC), while ‘X’ refers to ‘luxury utility vehicle’ or SUV.

On hybrids, the three digits refer to the combined gas-electric output. For certain models, a lower case letter placed after the alphanumeric designation indicates powerplant type (‘h’ for hybrid, ‘d’ for diesel), while capital letter(s) placed at the end indicates a class subtype (e.g. ‘L’ for long-wheelbase, ‘C’ for coupe, ‘AWD’ for all-wheel drive).

On F marque models, the two-letter designation and the letter ‘F’ are used with no numbers or hyphens (e.g. IS F).

Design and Technology

Lexus design has traditionally placed an emphasis on targeting specific vehicle development standards. Since the marque’s inception, design targets have ranged from aerodynamics and ride quality to interior ergonomics. The backronym “IDEAL” (“Impressive, Dynamic, Elegant, Advanced, and Lasting”) is used in the development process. Each vehicle is designed according to approximately 500 specific product standards, known as “Lexus Musts,” on criteria such as leather seat stitching.

In 2006, Lexus incorporated the first production eight-speed automatic transmission in an automobile with the LS 460 and the gearbox was later adapted for the GS 460 and IS F models. Continuously variable transmissions, regenerative brakes, and electric motors have been used on all Lexus hybrid models.

In 2007, Lexus executives signaled intentions to equip further models with hybrid powertrains, catering to demands for a decrease in both carbon pollution and oil reliance. Hybrid models have been differentiated by separate badging and lighting technology; in 2008, the LS 600h L became the first production vehicle to use LED headlamps.

Safety features on Lexus models range from stability and handling programs (Vehicle Stability Control and Vehicle Dynamics Integrated Management) to backup cameras, swivel headlights, and sonar warning systems. The Lexus Pre-Collision System (PCS) integrates multiple safety systems.

In 2007, Lexus introduced the first car safety systems with infrared pedestrian detection capabilities, lane keep assist, a Driver Monitoring System with facial recognition monitoring of driver attentiveness, and a rear pre-collision whiplash protection system.

As a safety precaution, Lexus GPS navigation systems in many regions feature a motion lockout when the vehicle reaches a set speed; to prevent distraction, navigation inputs are limited, while voice input and certain buttons are still accessible. This safety feature has attracted criticism because passengers cannot use certain functions when the vehicle is in motion. Pre-2007 models came with a hidden manufacturer override option and updated European models allow operation in motion.


Many Lexus vehicles are manufactured in Toyota’s flagship Tahara plant, a highly sophisticated, computerized manufacturing plant in Japan. Lexus production techniques include methods and standards of quality control that differ from Toyota models. At the Tahara plant, separate assembly lines were developed for Lexus vehicles, along with new molds and specialized manufacturing equipment. Welding processes, body panel fit tolerances, and paint quality requirements are more stringent. Lexus plant workers, typically veteran technicians, are identified via repeated performance evaluations and ranked according to skill grade, with limited applicants accepted. The highest level takumi (Japanese for “artisan”) engineers are responsible for maintaining production standards at key points in the assembly process, such as testing engine performance. Production vehicles are given visual inspections for flaws, individually test-driven at high speeds, and subjected to vibration tests.

The North American–market RX 350 (since the 2004 model year) is produced in the city of Cambridge, in Ontario, Canada, which is the first Lexus production site located outside of Japan. In addition to the Tahara factory, Lexus vehicles have been produced at the Miyata plant (Toyota Motor Kyushu) in Miyawaka, Fukuoka, the Higashi Fuji plant (Kanto Auto Works) in Susono, Shizuoka, and the Sanage plant (Toyota Boshoku; Araco) in Toyota, Aichi.

All front-wheel drive cars, such as the ES and HS, are produced at the Miyata plant. Through the late 2000s, most sedan and SUV production occurs in Japan at the Tahara plant in Aichi and Miyata plant in Fukuoka.

In 2005, J.D. Power and Associates bestowed its Platinum award for worldwide plant quality on the Tahara plant for the fourth consecutive year, stating that it has the fewest defects of any manufacturing plant in the world. In 2006, J.D. Power named the Miyata plant, then the site of ES and IS model production, as its recipient of the Platinum award for worldwide plant quality and in 2009 the Higashi Fuji plant, site of SC production, received the same recognition. J.D. Power has named Lexus the most reliable brand in the U.S. fourteen times since 1995, according to its Vehicle Dependability Survey of over 53,000 vehicle owners and the first three years of ownership.

In the 2000s, Consumer Reports also named Lexus among the top five most reliable brands in its Annual Car Reliability Surveys of over one million vehicles across the U.S.


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