Lexus: The Relentless Pursuit

For

Alyssa and Sean

and Mirabelle

"Our vision for the future is very clear and it doesn't include being in anyone's rearview mirror. In the 10 years since Lexus was launched, it often has been referred to as a ‘text book example.’ I don't know who's going to be standing in front of you at the Detroit Auto Show 10 years from now, but I do have a feeling they'll be talking about another successful chapter straight from that standard-setting business publication, The Relentless Pursuit of Perfection."

—former Toyota Motor Sales, U.S.A., Inc. Lexus division head Bryan Bergsteinsson, speaking to the press at the North American International Auto Show in Detroit on January 5, 1999

Introduction and Acknowledgments

My journey toward writing this book had many starting points, but the primary impetus arrived in the form of a mysterious brown envelope one day in late May of 2002. As a correspondent in the Tokyo bureau of BusinessWeek magazine, I was accustomed to receiving unsolicited mailings from discontents, kooks and—occasionally—admirers. But this one stood out because it was marked with the logo of a major corporate icon. Inside was a neatly stapled set of internal case studies—mostly written in Japanese—by the Toyota Motor Corporation along with an assortment of newspaper clippings on the auto industry. It turned out to have been sent by a Japanese acquaintance whom I had met once for dinner—and then never again. How this person obtained the eyes only documents from Toyota Motor or why they were passed on to me remained a mystery. (To unravel the mystery, see the Afterword.) But one thing was clear: I had been handed the keys to unlocking the secrets of Toyota Motor's first world-class luxury car, the Lexus LS 400.

At the time I already was in discussions with John Wiley & Sons (Asia) Pte. Ltd. about a book project, but I had hesitated to sign on due to the demands of my work schedule and, frankly, lack of any particular insight. In fact, I only had begun to cover the Japanese auto industry with any depth after joining BusinessWeek in 2000. Prior to that, my reporting on cars was mainly limited to noting how a handful of automakers, including Toyota Motor, seemed impervious to the slow meltdown of Japan Inc. in the 1990s. But once bitten by the car bug, I began to grasp the importance of the industry to the world's leading economies and to average consumers around the globe.

Even more so than sports, talking about cars is truly one of the few surefire conversation starters. Everybody's got a favorite car story—even those of us who live in cities such as New York and Tokyo where ownership is often the exception rather than the rule. The arrival of the mysterious manila envelope was the nudge I needed to start connecting the dots from what I had learned in the course of my reporting on Toyota Motor, the world's luxury car market and the auto industry in general. Once I had embarked on the book project, I spent most of 2003 poring over all manner of material in Japanese and English and culling notes from interviews with dozens of auto-industry hands, on and off the record. Even so, I am the first to admit my lack of expertise under the hood and in the showroom. Any flawed descriptions, interpretations or analysis are therefore solely due to my own inexperience and shortcomings as a writer.

With that caveat, in this book I hope the hard cover and subsequent paperback editions shed some light on the manufacturing and marketing of one of the automotive world's most impressive success stories to date—the Lexus brand. In the space of 10 years, Toyota Motor's luxury division evolved from the butt of jokes in 1989 to become the preeminent benchmark for quality among the world's top vehicles by 1999. Since then, not only have Lexus cars won more J.D. Power & Associates awards than any other brand of automobile, but Lexus also has been the best-selling luxury car in the U.S.—import and domestic—every year from 2000. Having spent more than a decade based in Tokyo, I never failed to be struck on trips back to the U.S. by the ubiquity of a luxury icon that did not—at that time—even exist in brand-obsessed Japan (Toyota Motor introduced Lexus as a brand into its home market in 2005 after the first edition of this book was published.) Today, in addition to 165 dealerships in Japan, Lexus vehicles are sold in 46 geographic entities around the world (43 countries plus the territories of Gibraltar, Guam and Hong Kong), including three of the four BRICs (Brazil, Russia and China—though not yet India). However, in many ways Lexus remains very much an American brand despite Toyota Motor's best efforts to grow sales globally. In Japan, sales of Lexus brand vehicles have been somewhat erratic (since their introduction in 2005), hitting 36,438 units in 2009, which was up from the previous two years, but essentially flat compared to 2007. As for China, where a dedicated Lexus sales channel was newly established in 2005, sales reached 33,000 in 2009, unchanged from 2008. But that is just a fraction of the 450,000 luxury cars sold in the Chinese market annually and, more pertinently, way below the 2009 luxury sales totals in China for the German Big 3: Audi, BMW and Mercedes-Benz. And Toyota Motor's efforts to carve out an identity for Lexus in these German brands' home territory of Continental Europe have yet to pay off in terms of meaningful sales growth. In contrast, the Japanese luxury marque reached a watershed moment in the U.S. by cracking the 300,000 unit sales per year barrier in 2005, something which only one brand (Cadillac) had ever done before—and then only in the mid-1980s. It is no coincidence that 2005 was also the year that U.S. sales of the Lexus RX entry-level crossover SUV hit an all-time high of 108,775 units. By 2007, overall Lexus sales in the U.S. climbed to 329,177—the most ever, before or since. But that peak represented both the best of times and the worst of times, for the stellar growth enjoyed by Lexus (and, more broadly, Toyota Motor as a whole, particularly in the U.S.) sowed the seeds for problems that would haunt the brand (and its parent company) for many years to come.

For more on the challenges facing Lexus, including its spate of recalls, and the opportunities still ahead for the brand, especially as concerns the debut of the LFA supercar in 2011, please see the Afterword, which has been added to this paperback edition. Another bonus is the new Coda chapter written by my journalistic senpai (mentor) Hisao Inoue. One of Japan's leading business journalists and the author of a pair of books about Toyota Motor, Inoue provides an in-depth look at the turmoil within the automaker over the past few years and the resultant ascendancy of a scion of the founding family, Akio Toyoda, as CEO and president in June of 2009.

I would be remiss if I did not mention the new Foreword contributed by Erwin Lui, one of the top vehicle designers at Toyota Motor and a founding member of the fraternity at Calty Design Research, Inc. in Newport Beach, California. Erwin has been involved in any number of notable projects at Calty, but is perhaps best known for his innovative role in shaping the first generation Lexus SC. He gives an insider's perspective on the development of that path-breaking sports coupe and also some lessons he has learned throughout his remarkable career at Toyota Motor.

With 2010 marking the 21st anniversary of the brand since its debut amid a snowstorm at the 1989 Detroit Auto Show—just four days after the death of Emperor Hirohito (known posthumously as Emperor Showa)—it's an appropriate time to look back and attempt to divine the secrets of the Lexus brand's success and how Toyota Motor has dealt with a number of flat tires along the way. From its hallmark quality and top-notch customer service—starting on the factory floor and ending in the showroom—to the brand's distinctive advertising and innovative vehicle line-up, Lexus has been nothing if not . . . relentless. The final chapters of the book look at some of the enduring and more recent challenges faced by the brand. They also provide a peek at what's in store for the Lexus line-up. Although the new chapters focus primarily on events that have transpired after the publication of the hard-cover edition, most of the older original content has not been updated with current data, job titles and such—with the exception of this Introduction and selectively in Chapter 1 and Chapter 8. In opting to keep it mostly contemporary to the original date of publication, I have relieved myself of a huge administrative workload but also given the reader a chance to compare that snapshot in 2003 with how Lexus has evolved over the past seven years. In truth, the bulk of the text is timeless to the extent that it mostly covers historical events prior to 2000. What's more, the brand new Afterword and Coda provide ample current reference points.

I would like to thank the many, many people who have provided material, editorial and emotional support for the writing of this book. Above all, credit goes to journalist and fellow author Hisao Inoue for reasons discussed elsewhere in the paperback edition. Deserving of equal billing is Wiley and its indefatigable publisher Nick Wallwork, who chased me for many months to sign on with him and exhibited remarkable pluck in the process. Recognition is also due to the eminently capable editorial staff at Wiley in Asia, particularly the dogged and patient Janis Soo, skilled wordsmith Grace Pundyk and project manager Joel Balbin, all of whom shepherded along the paperback edition with invaluable help from assistant Jules Yap.

Although this work has no official sanction by Toyota Motor, I am grateful for the cooperation of many current and former executives, engineers and sales associates of Toyota Motor Corp. (TMC) in Japan, Toyota Motor Sales, U.S.A., Inc. (TMS) in the U.S. and the Lexus Division of TMS who offered their stories to me. I would like to extend particular thanks to former TMS senior vice president J. Davis Illingworth Jr., who contributed the Foreword in the hard cover edition, and former TMC executive advisory engineer Ichiro Suzuki, the godfather of the LS series. Both men put up with incessant questioning in the course of several interviews with me. Special thanks also go out to Calty Design Research Inc.'s creative innovation studio manager and new Foreword author Erwin Lui; former TMS group vice president and Lexus Division general manager Dennis E. Clements; former TMS executive vice president Robert Buck McCurry; former TMS vice chairman Yale Gieszl; former TMS vice chairman Jim Perkins; Toyota financial services president and CEO George Borst; former TMS executive vice president and chief operating officer Jim Press; Toyota Motor Manufacturing Canada Inc. president Real Ray Tanguay; former Toyota Motor Marketing Europe president and CEO, Tadashi Arashima; former Toyota Motor Asia Pacific senior vice president, Richard Dick L. Chitty and former TMS project manager John French. I am also appreciative of the unending assistance of Toyota Motor's global media relations staff. In North America, that includes TMS corporate communications division external communications manager Mike Michels, former Lexus division national public relations manager Bill L. Ussery, former TMS processing archivist Amy Lucadamo, former TMS national strategic news manager Nancy Hubbell, former Toyota Motor North America vice president for external affairs Veronica Pollard, former Toyota Motor Manufacturing North America media relations manager Daniel Sieger, and former TMS northeast public affairs manager Wade Hoyt. In Japan, I would like to thank the members of TMC's public affairs division international communications department in Tokyo, including former general manager Shigeru Hayakawa (currently a managing director), former group managers Tetsuo Kitagawa and Shinya Matsumoto and assistants Monika Fujita, Liu Hong, Paul Nolasco, Hisayo Ogawa and Shino Yamada.

Among the many TMC engineers I spoke to in the course of my reporting for BusinessWeek, I am especially grateful to RX 330 chief engineer Yukihiro Okane and ES 330 chief engineer Kosaku Yamada. Former Lexus division vice president Takashi Sakai, former Lexus development center product development group managing officer Takeishi Yoshida, former Lexus planning division general manager Shinzo Kobuki and former Lexus brand planning group manager Yukihiko Yaguchi also provided invaluable assistance. Specific thanks are also due to the helpful staff at TMC's Global Design Center in Toyota City, including former senior general manager Hideichi Misono, former Lexus design division general manager Kengo Matsumoto, former group manager Simon Humphries and Masako Nagai of the resources administration department.

I must not fail to mention my debt to the current and former employees of TMC and TMS who spoke only on the condition of not being identified in order to protect their long-term ties to the company. These brave souls provided documentary evidence and oral insight, which helped fill in many of the blanks in Toyota Motor's official history of Lexus.

Among the auto industry outsiders who contributed in some way, shape or form, I would like to offer special thanks to current and former members of ad agency Saatchi & Saatchi's Team One unit based in El Segundo, California, who helped me piece together the advertising side of Lexus, including former Saatchi & Saatchi New York office CEO Scott Gilbert and former J. Walter Thompson Detroit office co-president Tom Cordner. A deep bow is due as well to photographer Makoto Ishida, who snapped a few memorable pictures of me monkeying around on the LS/GS assembly line in Tahara, Japan, including the one used on the inside back flap. I also would like to express my gratitude to (pre-Bloomberg) BusinessWeek magazine, which took a chance on an untested local hire with a newswire background when it brought me on board. In particular, I am indebted to former Asia bureau chief and current Bloomberg BusinessWeek assistant managing editor Brian Bremner, who has given much sage advice in return for little over the years.

For the paperback edition, I would like to offer a thank you to TMC global design management general manager Simon Humphries (again), Lexus prestige communications manager Nancy Hubbell (again) and Allison Takahashi of Lexus public relations at TMS; the gifted David Dewhurst of David Dewhurst Photography; Newsday editorial cartoonist Walt Handelsman; Julie Brown of The Permissions Group, Inc.; Shin Sano of Sano Research and the erudite and urbane journalist-cum-lawyer-cum-financier Hajime Matsuura. A tip of the tam o' shanter is due to motor sports buff Sean Coleman as well.

As far as inspiration is concerned, I point to two seminal works with which I dare not compare this tome but which provided me with basic reference points for my narrative framework. These are David Halberstam's breathtaking 1986 book The Reckoning, on the rise of Japan as an automotive power and the relative decline of Detroit, and Rich Nation, Strong Army: National Security and the Technological Transformation of Japan, a fascinating 1994 study of Japan's pervasive techno-national ideology by Richard J. Samuels, Ford International professor and head of the department of political science at Massachusetts Institute of Technology.

Finally, a word of thanks to the friends and family members who provided critical support while I undertook this project and unfailingly encouraged me even when the task seemed too daunting, especially my parents, the late Chester Jr. and Ruth, and my partner, Miyuki.

Chester C. Dawson III

June 2010

A note on Japanese names:

Although Japanese convention is to use the surname before the given name, for purposes of standardization, all names in this book are written with the given names first.

Foreword

When young people think of Lexus, they tend to do so under the same perceptual umbrella as they do with Google; that is, they assume it's always been around. But 20 years ago there was no such thing as the Internet or a Japanese luxury car in the popular lexicon. That alone speaks volumes as to how far Lexus has come (to say nothing of Google!). Far from being an integral player in the premium/luxury brand landscape, Lexus was once an upstart underdog with a funky sounding name.

When I think of Lexus now, I often think back to a time in the mid-1980s when a group of strategic product planners from Toyota Motor Sales' (TMS) head office in Torrance, California paid a rare visit to us at Calty, Toyota's U.S. design studio in Newport Beach, in order to ask our opinions about possible names for Toyota Motor Corporation's (TMC) future luxury brand, which at that time was still on the drawing boards. We were told then that one of the favorite candidates from Japan was Lucidia. When I first heard that, I couldn't help thinking to myself that it sounded like a cross between the words Lucifer and insidious. Then it occurred to me that it could be confused for Leucadia, the name of a small, rocky state-run beach popular with beach bums and surfers north of San Diego—not exactly the kind of image normally associated with a refined luxury brand. And that, in turn, reminds me of the perceptual differences, challenges, difficulties—and ultimately successes—of working to bridge different corporate and country cultures (TMS in the U.S. vs. TMC in Japan). To this day, I always wonder: Would Lexus have been as successful if it were known as the Lucidia brand?!

When the first Lexus—the LS 400 sedan—debuted in 1989, executives at other carmakers, automotive journalists and the car-buying public all wondered if this newcomer from a budget carmaker would really compete head-to-head with more storied rivals in the luxury market. The answer was yes, thanks to its ability to set new standards in manufacturing quality, performance, technology, luxuriousness and aggressive pricing. Combining Japanese cultural values such as understated beauty, subtlety, and hospitality, the LS 400 and the Lexus brand were off and running from the time of the launch, finding a place almost instantly in the hearts and minds of the auto press and American car buyers alike as a legitimate player and an intelligent alternative.

Similarly, the SC 400 sports coupe also shook the automotive world when it debuted as the third Lexus model and just two years after the LS. Although I have been involved with many other cars before and since, the first generation SC is perhaps the vehicle I am most closely associated with. And, like the LS, the design and engineering of this car provide key insights into the development of Lexus in its infancy in terms of its brand image and philosophy, an image and philosophy which still resonate throughout the line-up to this very day. Our mission was simple: create a product that captivated, delivered on its promises and was unique. The SC was to be a true coupe, not a sedan derivative. It broke new ground with its grille-less front-end design, unheard of on a luxury car at the time. What's more, the original design called for parallel dual-hinge doors to aid entry and egress in tight parking.

A Soarer Amid Shrugs

When I was assigned to work on what eventually became the SC 400 in 1987, I was told I would be working on the third generation Soarer coupe, which had been a Japan-only Toyota model unknown to most American car buyers. But for an auto aficionado like me, this was a dream come true. I couldn't believe I had a chance to compete for the next iteration of a car that had captivated me from my very first trip to Japan in 1983. I learned that this iconic vehicle—one that every Japanese yuppie aspired to—would be coming to America as part of a new luxury channel. So I approached this monumental task with a sense of deep honor, excitement, naïveté, and bravery—all traits that I believe were ultimately a benefit to how the finished product turned out, as I will detail below.

Even before starting the design process, TMC shipped a Japanese Soarer to the U.S. and told us to get a sense of the car by driving it around the streets of Southern California. Shockingly, my beloved Japanese icon got absolutely no head-turns or double takes—except for a few curious glances at its right-side steering wheel. When we took it to a local car wash and hotbed of auto enthusiasts, no one bothered to give it more than a passing glance or ask us what it was. We knew right then and there that a huge directional change would be needed for the U.S. launch of the car. History proved us right. Not only was the SC 400 a huge hit; its chief competition in the market segment—the Infiniti M30 coupe—was a flop. The reason? Nissan had simply re-badged its Japanese market Leopard coupe, which was a direct competitor to the Soarer. Since our Japan market Soarer had failed to impress in the U.S., it didn't surprise us that the M30 failed to catch on in a big way among Americans.

99 RED Balloons

Of course, the SC 400 is best known today for the novel way in which it was designed, utilizing 3D sketches born from ceramic potter's clay. But, to me, the more interesting back story is how this was used to market the car. Our path-breaking design was inspired by balloons, or rather plaster-filled balloons, that were sculpted by hand, allowed to harden and then photographed from many angles. Those photos were subsequently projected onto a slide screen which we stretched and skewed into a variety of elongated speed forms. This feat is easily and effortlessly done today with the magic of Adobe Photoshop, but at the time it was a truly revolutionary technique. It wasn't until TMS execs caught wind of it just before the car's launch years later that we realized our design studio high jinks would become fodder for a marketing campaign. I distinctly remember Lexus division general manager Dave Illingworth saying as soon as he heard about it: "We've got to use this."

Of course, we at Calty never really intended to share our playful methods with the wider world. But the TMS execs in the U.S. took the ball and ran with it, so I got more than my 15 minutes of fame. The novelty of our approach led to a flood of press, culminating with a video of our handiwork being featured on the big screen at the annual Lexus dealers show and, as I recall, coupe design process videos popping up on the cabin monitors of American Airlines flights. Looking back now, in all honesty, I think the uniqueness of our use of balloons as design inspiration tools was more important to the SC 400's marketing efforts than any other attribute of the car's design. It gave automotive writers a hook to sell magazines, and who was TMS to turn down an opportunity to exploit the media's appetite for The Next Big Thing? Since then, I've heard there were a few frowns and even some ridicule about our approach among certain circles in the automotive industry. Even within Calty, some Doubting Thomases asked jocularly: "When are you guys going to design a real car?" Regardless, the process served its purpose in the design studio and also managed to garner a lot of positive press for Lexus.

What I believe was missing from much of the media coverage and industry debate about the plaster and balloon process was any mention of the open-minded mentality and free spiritedness of the design studio that tolerated and nurtured such a novel approach. Not only was the freedom I was given unusual by industry standards; even more interestingly this was going on at Toyota, which has long been known as a rather conservative, monolithic company. Due credit for that must be given to our Japanese executive stationed at Calty, Katsushi Nosho, as well as chief designer Dennis Campbell, my immediate boss. The fact that we were 3,000 miles away from Toyota headquarters didn't hurt either. This created an environment in which myself and other young designers weren't afraid to try new things and achieve new results.

In fact, there was very little second-guessing and corporate bureaucracy involved in our work. I believe that's because our local executives shielded us by not advertising our somewhat unorthodox design processes to headquarters. In fact, Dennis once told me flat out: You're going to design the next Soarer. But I don't want you to do any sketches and foam-scale models like we always do. Instead, I want you to use artistic, hands-on methods. Of course, I thought I had been using artistic methods all along, but what he meant was non-traditional design methods.

The underlying thinking behind this idea is that the world had entered a time when there were increasing conflicts between art and technology. It was our job to try to bring balance between those two forces. The power of technology is that it can bring to life an artistic vision. But the flip side is that technology often renders artistic ideas very crudely, resulting in somewhat cold design expressions. At Calty, we believed our design of the new luxury coupe should find a way to better articulate its underlying artistic inspiration. By appearing as if it were created by human hands (instead of computer models), the resultant shape of the car would convey more of an artistic aesthetic—so much so that its owner might enjoy washing his or her own car just to run his or her hands along the same lines as the designer. I was later told that luxury owners don't wash their own cars, but I didn't let that stop me from entertaining the notion. With this paradigm in mind, we found that plaster-filled balloons provided non-linear volume, fluidity and tension. I believe these qualities are timeless attributes of good art form. And that fueled our drive to work with Toyota's engineers in Japan to harness their state-of-the-art manufacturing technology on the factory floor in order to stamp sheet metal in a way that was faithful to the coupe's artistic essence in the final production model of the SC 400.

Tortoise Shell, Suicide Doors and Green-Tinted Glass

The same freewheeling atmosphere that allowed us to play around with plaster and balloons also spawned some lesser-known (and less successful) design concepts. Most were rejected in good faith and I believe that many served—however subtly—to influence other car models' designs in the years to come. One of these ideas dawned on me during a brainstorming trip to New York City. I came away from that three-week visit with lots of impressions about old money as represented by the precious objects and materials I saw on display all around me while walking the non-automotive-friendly streets of Manhattan. One thing that grabbed me in particular was the row upon row of beautifully displayed tortoise shell sunglass frames in one boutique's window on Madison Avenue. I thought to myself: Why can't automobile ornamentation be made of something other than chrome?

A combination of tortoise shell and brushed metal ended up on our initial design proposal in the form of window moldings. To create that effect, I purchased a huge sheet of faux-tortoise shell material (used for guitar pick guards) and carefully crimped it into shape. We received a lot of curious and polite chuckles from our internal audience of Japanese executives. They were probably thinking: How many turtles were slaughtered to achieve this feat? Unfortunately, the tortoise shell idea never went any further. It was no doubt viewed by my higher-ups as a youthful indiscretion.

Another novel design idea I had for the SC 400 was too far ahead of its time. It all started when I noticed doormen opening doors for patrons of limos outside high-end apartment buildings all over Manhattan. During a subsequent trip to Tokyo, I remember seeing a beautiful woman awkwardly getting out of a Porsche 928 in the hip Shibuya district. From those observations, we designed a suicide-style access door to allow better ease of entry and exit to the rear seat. The idea was to evoke the sense of hospitality that a doorman provides and it was incorporated into our first coupe proposal. We were so in love with the idea that we even imagined how this could be marketed with a TV commercial showing two beautiful women exiting coupes at valet parking. The woman exiting the SC 400 does so in style and grace—thanks to the access door—while the other poor woman stumbles out awkwardly onto the pavement.

But the access door idea never made it to the production stage due to a host of irresolvable technical issues such as its extra weight, inherent body structure weakness and long development time needs. We were also (politely) told by naysayers: Coupes don't have four doors. Ironically, the access door did eventually make it into production years later—but not on a Toyota model. Among those vehicles that managed to square the circle from design to manufacturing for this feature were a GM Saturn coupe, Mazda's RX-8 and, of course, many club-cab pickup trucks. (And just for the record, I think of the Mercedes CLS as a four-door coupe.)

A final outtake design idea from the SC 400 was the clear glass tail lamp lenses we incorporated into our earliest proposal. These had a slight green tint to them, which was inspired by the thick, greenish architectural glass used by many post-modern New York City skyscrapers. But the Japanese chief engineer at the time wasn't having any of it. He couldn't understand why I put the color green on an area that is normally red. Doesn't green mean GO, and red mean STOP? he asked. Here, too, clear tail lamps won favor years later. In fact, they donned the first generation Lexus IS and were widely copied in the ensuing years by other automakers. They also became a very popular aftermarket personalization item for young street racers and their low-rider cars.

Two-Eyed Beauties and Four-Eyed Monsters

But that's all been forgotten now. What hasn't been is the successful design that prevailed—one that earned the respect of our peers inside and outside the company. Much of the credit for pulling that off goes to the Japanese design teams that competed against—and then embraced—our new design at Calty for the SC 400. As part of the selection process, I was asked to go to Japan for three months to help develop our proposal into a prototype that could be feasibly manufactured. When I first arrived, my Japanese design boss told me that we were going to have to eliminate the major body character line from the design. It doesn't need it, he confidently announced. I argued this was a critical directional element of the design. But he pulled rank and we ended up going with his version, sans character line.

Weeks later, we pushed a prototype of this new and improved version to a viewing yard on the grounds of the Japan design studio. There we observed it side-by-side next to my original design. At that point, he turned to me and, without missing a beat, said: I ruined your design. We ended up going back to the original look, losing about a month out of our tight, three-month design schedule. I'm sure it took a lot of character to admit the mistake, but in the end getting the best result mattered more than his ego or pride. Once he understood the true artistic power of our design, he began fighting hard with the TMC engineers in Japan to maintain and realize it.

And there was a lot of fighting. Most of it can be summed up as a tense, but good-natured turf battle between us designers and the engineers. Those nuts and bolts guys had trouble wrapping their heads around the idea of fitting this odd, bulbous-nosed shape onto their beloved Soarer platform. The chief issue involved the dramatic circular front plan view. Compared to most cars at the time, which were basically shaped like boxes, the curves of our design presented many technical challenges. Core components that would normally occupy the boxy corners needed to be moved or re-configured to conform to our fluidly shaped hood. The biggest single obstacle to actualizing our design ended up becoming the most iconic element of the front end: the headlights.

My original design had only one headlamp on each side containing both the high and low beams. But the engineers complained they couldn't fit such large lamps on a curved surface. So we had to strip out the high beams and position them slightly inside the low beams on the fascia. It was not love at first sight. Looking both foreign and awkward, I remember thinking we'd gone from a two-eyed beauty to four-eyed monster. But this time it was I who was wrong. Those dual headlamps became the most notable feature of the SC 400's front-end design. Moreover, the distinctive circular shape of all four lamps was created by a Japanese designer on my design team. Because a circle is a relatively neutral shape that is usually harmonious with almost anything, it was the only graphic configuration that worked well. And that's when everything else began to fall into place.

At the end of the arduous design selection process, Calty's model was selected, but not without some lingering internal controversy. That's because it was such a huge departure from the existing Soarer model, in terms of both surface taste and overall feeling. Some critics thought it to be too classic, too elegant, too romantic, too expressive and too big. However, TMS executives in the U.S. supported it strongly. In the end, the pendulum swung towards appealing to American car buyers over the purist argument for the traditional Soarer popular in Japan. I had confidence the new design would be a winner in the U.S., if only because of my negative experience driving the Japan market Soarer around Southern California. History is written by the victors, but it's true that Soarer sales in Japan declined even as the SC 400 took off in the U.S.

The final product reflected the commitment of everyone I worked with at TMS and TMC to achieve the highest level of execution, especially once they understood the heart and soul of the design. Cultural differences disappeared once the goal was clear. Over the years I have received a lot of credit for the SC 400, but in reality there were many contributors to the finished product.

From Manhattan to the French Riveria . . . and Beyond

Alas, no design is permanent. Much as the SC 400 breathed new life into the predecessor Soarer line in Japan, the successor model to the SC 400 took the car in an altogether new direction. The Lexus SC 430 that followed further exemplifies how Lexus is always looking one or two steps ahead. Sporting singular headlamps, a large grille and a retractable hardtop, it expressed a completely different styling sensibility than the SC 400. Rather than balloon ballistics and Manhattan motifs, the SC 430 reflected its design roots in the relaxed but upscale retreats of the French Riviera. That car retains nothing from the original Japan-market Soarer and represented a radical departure from the SC 400. But mutation is part of the Lexus DNA. That's the same trait that made the RX crossover—the best-selling Lexus of all-time—into such an unprecedented success. Desired and emulated by many, the RX is yet another example of Lexus breaking ground by crossing the once rigid boundaries of utility, sportiness, and luxury in a very personalized way.

For me, the process of winning a place in the legend and lore of early Lexus history presented some tough challenges at the time, but ultimately those challenges became the reward. So what does the future hold in store for Lexus? Like everything of value, or that is valued, Lexus will continue to evolve—but never again as an upstart or, God forbid, under the name Lucidia. Currently, Lexus reflects today's values, with a number of eco-sensitive hybrid models, but it also reflects driving passion, performance and high technology via the sporty LFA. Lexus will evolve by understanding what it stands for, taking those values to new levels by exceeding the expectations of consumers. The secret to the brand's success is that it continually meets and exceeds expectations that car buyers often don't even know they have.

But one essential component that won't change in the future for Lexus is its