In 1989, from a standing start, Toyota took aim at the world’s luxury carmakers and damn near scared the life out of them.

Creating an entirely new brand for the venture, Toyota launched the Lexus LS 400 squarely at the likes of Mercedes, Jaguar, BMW and Audi – and came within an ace of toppling the lot of them.

We look at the early days of the flagship Lexus.

It took Toyota six years of painstaking development to take project F1 (“flagship one”), also known as Circle-F, from conception to production of the Lexus LS 400.

The Japanese giant threw everything but the kitchen sink at developing a world-beater, with an almost bottomless pit of cash, more than $1bn paying for the work of  60 designers, 1,400 engineers split up into 24 teams, 2,300 technicians and more than 200 support workers.

The new car was to be built entirely from scratch, rather than using any of Toyota’s existing platforms, with a 4.0-litre V8 powerplant at its heart.

The Relentless Pursuit of Perfection

Despite making huge inroads into the American market in the 1970s and early 1980s, Toyota’s research showed that customers abandoned the marque once they could afford something a little more upmarket.

To this end, they needed something that could compete with, and ideally beat, the best the rest of the world could offer.

The new car had to establish Toyota as a credible name in the luxury car market, so rather than call it a Toyota, the company came up with an entirely new brand – just as Japanese rivals Nissan and Honda were developing their Infiniti and Acura brands.

Image consultants Lippincott & Margulies were tasked with coming up with a name, with Alexis among a prospective 219 which included Vectre, Verone and Calibre.

Alexis became Lexus, while representatives from advertisers Saatchi & Saatchi came up with the slogan ‘The Relentless Pursuit of Perfection’ after noting the engineers’ obsessive attention to detail in developing the car.

In all, 973 prototype engines were built, the final version – 1UZ-FE – representing the pinnacle of the company’s engine-building capabilities.

The same level of obsession was shown over every other element, with a view to making the Lexus surpass rival European and American saloons in performance, aerodynamics, quietness and fuel efficiency.

Among more than 450 prototypes, early models were more sharp-nosed and low-slung, but the final shape was a more conventional three-box design not unlike Toyota’s flagship Crown saloon.

Despite this, considerable wind-tunnel testing resulted in a comparatively aerodynamic shape, its Cd of 0.29 beating rivals from Mercedes and BMW at the time.

And it was the class-leading Mercedes S-Class that the Japanese had firmly in their sights.

Launching the Lexus

Toyota’s plans to reveal its new flagship at the 1989 Detroit Motor Show hit a snag when Mead Data Central sued the company because Lexus sounded too much like its legal research system Lexis.

The court agreed that, should the Lexus fail, it would impact the reputation of Lexis, but Mead allowed Toyota to use the name as a one-off for the Detroit show while waiting for an appeal against the decision to be heard.

After the show, Toyota was saved from having to rename its new car when the appeals court ruled there was little chance of a luxury car being confused with a piece of software.

So after millions of miles of road testing, and extensive crash-testing, the LS 400 lined up at Detroit alongside the smaller ES 250, a re-modelled Camry to give the new brand a cheaper entry point.

Production began on May 15, 1989, with the first cars shipped to the USA in June and available for sale from September. Exports to the UK began the following year.

The UK launch price was £34,250, compared with £37,500 for a BMW 735i SE, £32,500 for a Jaguar XJ6 Sovereign, and £37,430 for a Mercedes S-Class 420SE.

For that, you got a lot of car, but the launch didn’t come without some embarrassing glitches.

In December 1989, Toyota announced a voluntary recall of every LS sold in America to fix three issues – a cruise control that sometimes refused to disengage, a plastic cover surrounding the third brake light that warped in the heat, and an electrical problem that drained the battery.

It affected all 8,000 cars sold to date, but the issues were quickly rectified and the next batch of cars were unaffected. The swift action actually enhanced Lexus’ reputation for customer service.

The Lexus specification

There’s only one place to start when discussing the Lexus LS 400 – its magnificent quad-cam, 4.0-litre V8 engine, which pushed out a maximum of 250bhp and went about its business with a whispering stealth.

How did they do it?

The engine was built around an aluminium block with cast iron cylinder liners for strength, with a five-bearing crankshaft for maximum support.

The four camshafts utilised the four valves per cylinder, while lightweight aluminium cam followers were used to reduce inertia in the valvetrain – a world first, according to Lexus.

Machining the tolerances of all moving parts by up to 50 per cent contributed to the smooth running, while the engine was suspended on special hydraulic-pneumatic mounts.

There was innovation throughout the drivetrain – a new computer-controlled automatic gearbox, featuring its own ECU ‘talked’ to the engine’s ECU, managing a split-second reduction in torque  to allow for an improved, smoother gear change.

In addition, the engine was tilted slightly backwards to allow the propshaft to lie in a straight line, minimising vibration.

Suspension was an advanced double wishbone system, with an optional computer-controlled air suspension set-up that adjusted its responses and ride height depending on speed, load and road surface.

As for the body, Lexus claims it was stiffer than any other contemporary luxury car, with welds 1.5 times stronger thanks to an innovative laser welding technique.

Lexus claimed another world first by welding sound-deadening material into the double-skinned front and rear bulkheads, adding to the quiet serenity of the cabin.

Inside, the dashboard featured new Optitron gauges that glowed with a three-dimensional effect, aimed at reducing eye strain.

The steering wheel, among the first tilt-and-telescopic example equipped with an airbag, would move out of the way when the ignition key had been removed to ease exit from the vehicle.

Creature comforts included walnut and leather trim, power seats, and a memory system that stored the settings of the seat, side mirror, steering wheel, and seat belt positions.

Luxury options included a Nakamichi premium sound system and an integrated car phone with hands-free capabilities.

The media reaction

Autocar tested an LS 400 in 1990 and wasn’t disappointed, noting that Lexus was “on the right road – a long, smooth, straight one”

“It is the quietest, most relaxed and most refined car we have ever had the pleasure to drive,” the magazine wrote. “Its engine is a marvel and its ride under such conditions is extraordinary.”

They did, however, believe it lacked a touch of class, that little something extra that made the likes of Mercedes, BMW and Jaguar a touch more special.

“Underneath it all, this exceptionally good car is still a Toyota, and it shows,” it concluded.

Peter Egan, writing in Road & Track magazine, recounted sitting in the passenger seat, flipping through a CD binder, completely unaware that the driver was doing 130 mph.

He wrote: “I had never before made a casual music selection while going more than two miles per minute. A near absence of wind noise and mechanical commotion, along with excellent directional stability, made the new LS 400 the calmest, quietest car I’ve driven at high speed. “The Lexus V-8 and its nearly vibration-free driveline simply set a new standard for combining horsepower with civility.”

Road & Track journalist Matt Farah, writing in 2019 about his experience driving a 900,000-mile  LS 400, described his experience of the car as new, when he was nine years old and his father bought a 1991 model.

“I would invite my fourth-grade classmates over to the house and ask my dad to start the car—you could not believe it was actually running unless you looked at the eerie ‘ghost’ dials,” he wrote.

“The Lexus was silent. It seemed so soft, so fast and quiet, that it was all that much more unbelievable when I told my friends the price.”

Best car in the world?

If Toyota’s aim was to build the best car in the world, CAR magazine put it to the ultimate test in November 1991, pitching it against a Bentley Turbo R, Jaguar Sovereign 4.0, and a Mercedes 600SEL.

It wasn’t an entirely fair contest, with the Bentley costing £124,000 and the Mercedes a mere £85,000, while the Jag was judged “world’s best saloon” when tested in 1986. But the Lexus, already judged by CAR as better all round than the Rolls Royce Silver Spirit the year before, was far from disgraced.

It had “the best external finish – superbly tight panel gaps, almost inimitable panel fit and paint quality”.

“But it lacks on-road presence. Its styling is very derivative Japanese rather than the bold step forward we had hoped.”

The interior felt the “least special”, “like an upmarket Camry…and in this company that’s not good enough.”

Nevertheless, the magazine concludes by saying they had gathered together “the world’s best cars” and that, while the Lexus lacked a touch of class, “it is still an exceptional car, not least because it is such a splendid first effort in this class. Its drivetrain is superb, as good as anything else here. It is quiet and wonderfully refined.”

A refreshed mark I was made available for 1993, featuring more than 50 changes largely requested by customers and dealers.

These included larger disc brakes, wheels and tyres, with suspension and power steering tweaks to improve handling.

A revised grille, additional body side mouldings and a greater selection of colours updated the exterior.

Production of the first-generation LS ended in September 1994, with a more significantly changed mark II debuting in November 1994 for release the following year.

Moving up a gear

On the surface, the second generation LS 400 wasn’t much of a departure, the body shape merely updated and slightly modernised rather than overhauled.

The wheelbase was lengthened by 35mm to provide a little more rear legroom, and the aerodynamics were improved further, with a class-leading Cd of 0.28.

Despite the visual similarities with the first generation, more than 90 per cent of components were new or redesigned.

After a first attempt that shook up the luxury car establishment, Toyota was determined to keep the pressure on with several more years of development in the bank.

Already one of the best engines in the world, the 1UZ-FE unit was extensively improved to  reduce weight and friction, raising maximum power to 260bhp in the process.

It was bolted to the same four-speed automatic gearbox, improved with a more efficient torque converter and revised gearing, which gave the new car the highest power-to-weight ratio, the fastest acceleration and most efficient fuel consumption figures in its class.

The interior was significantly remodelled, with more storage space, an improved air-conditioning system, and an optional six CD changer – claimed by Lexus as the world’s first.

On the road

Autocar tested the improved LS 400 in January 1995, with the new car now “armed to the teeth” in its bid to hit the top of the luxury car charts.

It noted that, after the “experimental” first model, Lexus believed this was “the car that would break the parameters by which all other luxury automobiles were judged”.

Were they right?

“It’s an unequivocally better car; that much your instinct tells you,” the magazine wrote. “There is no smoother or more refined engine anywhere in the world, at any price.

“Neither are there many to be found beneath the bonnet of a luxury car that responds so crisply to the throttle or sounds so mechanically sophisticated (or purposeful) when asked to do so.

“It’s the quietest car that money can buy. Any money. It’s the finest V8 engine in the world.”

The suspension’s ability to sponge away whatever the road surface can throw at it is “almost surreal”, while the Nakamichi sound system is “unquestionably the finest in-car entertainment system you’ll find in any standard production car in the world”.

There were one or two black marks, however, with the interior still lacking “prestige and visual sophistication”, while the seats offer “insufficient support after hours on the motorway. A bad fault”.

According to Autocar, it still lacked that essential touch of class: “It suffers from one painfully obvious, fundamental problem: compared with an Audi A8, a Jaguar XJ6 or indeed any of its obvious financial rivals, it lacks style, proving both bland on the outside and plain within.”

Having said that, overall, it was deemed a better car than rivals like the BMW 7-series and Audi A8, failing only to conquer the Mercedes S420, which cost £14,000 more at £56,000.

Like the first generation, the mark II underwent a mid-term upgrade for the 1998 model year, with the newly-developed VVT-i intelligent variable valve timing making its debut, allied to a new five-speed auto box.

Even though the LS was arguably the quietest car around, sound deadening material was further improved and the windscreen made thicker, reducing interior noise by 2.5dB.

There’s no doubt that, in a very short space of time, Lexus muscled its way into the higher echelons of the luxury car market, where it remains today, with the LS 500 its flagship model.