Australians buy around 50,000 prestige and luxury vehicles each year - making up some eight percent of passenger vehicles sold. No fewer than 27 makes compete for the luxury business with over 130 model variants. Some deliver as little as five in the year, others as many as 8000. Government taxes including a luxury impost of 45 per cent above a retail price of $55,134 and the fringe benefit tax artificially limit the true potential of the luxury market. A forthcoming goods and services tax may, paradoxically, create some relief as other government charges are traded off.
	Lexus has been the start-up brand success of the 1990s. Already it is regarded by many marketers as the brand of the decade - not only in the automotive sector but overall. In America Lexus has become the largest single selling luxury model. In Australia it is the fastest growing luxury make. In 1998 sales of Lexus grew more than 50 percent to 1876 buoyed by demand for new models the GS300 sports sedan and the LX470 4x4. In 1999 dealer strength rose another 60 percent from 12 to 20, and dealers invested more than $40 million in new facilities. Internationally, Lexus vehicles have rated as the world’s most trouble-free for the fifth successive year in the J.D. Power survey. Lexus has earned more than 40 J.D. Power accolades since its launch as a brand in 1990. Australian accolades include the prestigious Wheels Car of the Year in 1990 for the flagship LS400 limousine, and Four Wheel Drive Wagon of the year in 1999 from both Overlander and Bushdriver magazines for the LX470 off-roader. Perhaps most important is the success of the company’s customer loyalty program - Lexus Encore - which has set an industry benchmark. A combination of vehicle excellence and customer satisfaction has led to an industry record of better than 65 percent owner retention.
	In the mid-1980s the then chairman of Toyota Motor Corporation (Eiji Toyoda) decided that for its international development his company needed a flagship. It was to be Lexus, a brand which set benchmarks in design, manufacturing expertise and value for money. In short, a brand which challenged precepts in the luxury car industry. Lessons learned would flow down to the entire Toyota range. Eiji Toyoda’s forebears had been at the forefront of the industrial revolution. They designed and built the world’s best automatic spinning loom and changed the face of the world textile industry forever. Their skills as manufacturers, then and now, are regarded as world leading. More than $4 billion was invested in the initial Lexus program. Fifteen hundred engineers worked for six years to build the first flagship LS400 limousine. Lexus stands for Luxury Export to the US - initially the target market. Teams of engineers lived in California to research the lifestyle. One team spent a full year scouring the world for a perfect stand of timber from which to make the dash panelling. Another team was assigned to designing the look of the engine bay. Laser welding, once a dream, became a reality on Lexus, achieving previously unattained levels of body rigidity and longevity. A $1.2 billion purpose-built test course replicated the world’s great roads - actual cobblestones from Belgium, the road surface from Germany’s Black Forest and a fully fledged F1 race track were just some of the features. The first Lexus LS400 came to market in Australia for $105,000 - 15 percent less expensive than Jaguar, 40 percent under BMW and 80 percent less than an S-class Mercedes-Benz. Lexus had succeeded in building a better and less expensive  car. Its appearance caused a global luxury turnaround, not only in price but in manufacturing technique and in back-to-the-source design. Competitive models have become better and less expensive, although still not matching Lexus’ strong value-for-money ratio. In 1999, the LS400 was still $70,000 less expensive than the equivalent Mercedes-Benz. Significantly, the Eiji Toyoda covenant has been fulfilled. Today even the entry level Toyota Echo boasts a safety body and level of noise vibration and harshness (NVH) control which is class leading thanks directly to the Lexus model.
	Lexus was initially a one-model brand. The quadcam 32 valve V8 LS400 limousine spent two years establishing its credibility in the toughest automotive market place. Before it was joined by another model, LS400 had singularly become the largest single selling luxury car in Australia and the largest luxury import in the USA. In Australia Lexus now offers five luxury models - from the recently launched IS200 entry level-sedan to the LS400. In between there is the ES300 quadcam V6 , the straight six twin cam GS300 sports sedan and the LX470 off-roader, regarded as the best four wheel drive on the Australian market. The IS200 establishes a benchmark in the lower luxury segment. Its chassis is universally acclaimed as the best in class. With its 2.0 litre quadcam six engine, mated to a six-speed manual or four-speed automatic, IS200 is introducing first-time luxury buyers to performance beyond their previous expectation. IS200, GS300, LX470 and LS400 are equipped with breakthrough intelligent infinitely variable valve timing. Fuel/air intake and exhaust ratios are modified constantly to achieve optimum performance and environmental control. LX470 comes with an electronic modulated suspension system to smooth out corrugations like no other.
	The recently opened Lexus of Brisbane features an electronic key entry Lexus Owners Club with a full size billiard table, comprehensive gymnasium, on-line work stations, and a boutique shopping arcade showcasing Hardy Brothers jewellers, Louis Vuitton and fashion designer Alex Perry amongst others. Investment in customer loyalty programs is a key point of difference between Lexus and its competitors. Lexus’ Encore program gives owners preferential access to performing arts centres. At Sydney’s Opera House Lexus owners park in their own reserved area. Lexus owners have access to otherwise unattainable show tickets. They can shop electronically for goods, services and information on a Lexus hotline. And they play golf, gamefish and attend polo in Lexus designed programs. The near doubling of Lexus dealerships by the end of 2000 will give an estimated 4000 new owners each year access to all services. Importantly, while oppo-sition marques make their owner loyalty programs selectively available according to grade of vehicle purchased, Lexus Encore applies universally. Lexus innovation abounds. A new NVH meter to measure minute vibrations has now been designed for use by all dealerships. Already renowned as the quietest and smoothest of the luxury makes, Lexus will test each car during regular service to ensure it remains within strict factory parameters.
	User recommendation is the key promotional force of Lexus worldwide. Lexus aligns itself exclusively to landmark events - The Three Tenors Concert, the Bee Gees One Night Only. Customers have access to special hospitality areas. Lexus seat cushions and wet weather ponchos are provided at outdoor venues. The national Lexus Legends Golf program has proved extremely popular amongst owners. Ten years of the Lexus Marlin Classic on the Great Barrier Reef provided opportunity for owners from Australia and overseas. Advertising reinforces the message already carried to the luxury market by existing owners. The launch of the IS200 entry level Lexus created new opportunity for promotion in clubs and fashion houses. Twelve young Australian personalities were chosen to test drive IS200 each for a year. Lexus encouraged under-35-year-olds in its advertising agency to work on the IS200 business.
	At manufacturing level “the relentless pursuit of perfection” is a driving credo. At dealerships the intention to “treat each customer as if they were a guest in our own home” creates an essential point of difference. In less than a decade Lexus has been instrumental in changing customer expectations in the luxury car market. Value for money has become as essential a requirement in the luxury segment as it is in the mass automotive markets. Lexus represents not just the recent achievements of Japan’s largest automotive manufacturer. It is symbolic of a culture of precise manufacturing skill which dates back centuries - long before the development of similar techniques in European communities.

LEXUS
		More than 2300 engineers worked for seven years on the first Lexus model. Some engineers lived in California and the South of France for a year, to gain a better understanding of customer needs and tastes
		Spending on the development of the first Lexus exceeded $1US billion (in 1980s dollars). The first LS400 was the subject of over 100 automotive patents.
		Lexus engineers re-thought automotive engineering to reduce or eliminate noise. They designed major components to eliminate noise and vibration at the source rather than add weight to the car with added sound-absorbing material.
		Technology in the first Lexus LS400 included Optitron instruments, which magically appeared out of black when the ignition was turned on. The technology employed was vacuum florescent illumination, which illuminates the indicator pointers from behind a screen. A decade on, the Lexus system is still considered the best in the world.
		Breakthrough manufacturing and materials technology in the first Lexus LS400 included weldable vibration-damping steel sheet, laser welding for body panels and infra-red video monitoring of the finish on the differential crown wheel and pinion.
		Recent technological breakthroughs include vehicle stability control, and variable valve timing which is both intelligent and infinitely variable.
		Lexus is the most successful motor vehicle launch in the last 30 years. The make went from start-up to a strong market position in the United States and the Middle East in half a decade.
		The Lexus launch lifted the luxury car industry, in product and service. No longer would rival manufacturers keep a model in production for ten years. Customers buying $100,000-plus motor vehicles were now treated as special.
		The Lexus creed is to exceed customer expectations, to delight and surprise. Special Lexus customer service touches include picking up and returning the car for servicing, and leaving chocolates for the owner.