Lexus: A New Car, a New Division by the Michael Jordan of Chief Engineers

January 29, 2009 - Tags:

Yukiyasu Togo was a successful Toyota executive in charge of Toyota Motor Sales, USA, in Southern California. His friends and associates were also well-to-do executives. But few would consider buying a Toyota. Mercedes and BMW were more their style. This bothered Togo. He was a fighter and not willing to accept being second-class. Making high-quality, fuel-efficient, and economical cars was fine, but he saw no reason why Toyota could not also make luxury vehicles competing with the best in the world. “Maybe what we need is a luxurious car that would create a new image, a car of high quality, perhaps even up-market of the Mercedes-Benz” (as quoted in Reingold, 1999).

To do this, Togo realized Toyota would need a new sales channel and name. He took his idea to management. At first he faced resistance. At Toyota this was not unusual. Much of Toyota’s success derives from incremental improvements year in and year out—part of that conservative mindset. Building a luxury car meant breaking the mold from sturdy and reliable but basic Japanese built cars to competing with the kings of luxury in Europe. Also the development of a luxury car would mean simultaneously developing a vehicle and a brand: a car company within a car company. But after some debate it was clear that Toyota was not living up to its challenge of staying a step ahead of trends in the market and the concept for the Lexus was born.

Such an effort could not be entrusted to just anybody. In this case, the task was given to one of the best and most revered chief engineers in Toyota’s history, Ichiro Suzuki, who was introduced to me as the “Michael Jordan” of chief engineers and a “legend” within Toyota. His comments in this chapter are from an interview I had with him at the Toyota Technical Center in Ann Arbor, Michigan, in April 2002, just a few months away from “real” retirement. Toyota had called him out of retirement to act as an “Executive Advisory Engineer.” Basically, he was making one last tour of duty to teach the younger generation what it took to be an excellent engineer at Toyota. (Principle 9, Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.)