The Hindu Business Line : Rigid caste system for cars in the parking lot

THE top-secret session of the company board was debating a project codenamed with an encircled F, or maru-efu, for `flagship.' The chairman posed a question, "Can we create a luxury car to challenge the very best?" Everybody said, `Yes,' and thus was born the Toyota's Lexus idea, recounts Chester Dawson in Lexus — the Relentless Pursuit, from Wiley (www.wiley.com) .

The car itself was to roll out "six years and half-a-billion dollars later." What was crucial was that the company had "smelled opportunity" in a market where the existing players "had grown fat, happy and increasingly out of touch with the demands of a new generation of car buyers."

By 2000, Lexus usurped Cadillac for `the leading luxury brand in the US' title and now "an estimated 1.3 million vehicles sporting the Lexus L are driven on the roads of America," proving not only the product's popularity but also durability. Well, it's a different matter that on the day I write this, Federal regulators are on a safety investigation into Lexus division's RX330 sport utility vehicle (SUV), in the wake of complaints about brake failures.

`Value-addition' and moving over to the premium segment was an imperative, in view of `voluntary' quotas that Japan "accepted under duress" during Reagan's time, writes Dawson. Toyota, Nissan and Honda thought hard about ways to extract profits "from a market with a tight ceiling on export sales growth." Two solutions came up: One, `transplant' more production to the US; and two, "sell fewer, but more profitable, export model cars."

In May 1985, Toyota sent a team on a month-long secret trip to the US, "to find out what luxury-car buyers wanted most." As part of intelligence gathering, the Japanese visitors "spent a lot of time surveying restaurant parking lots" and noticed "a rigid caste system of sorts." Best spots were closest to the entrance where "the most exotic and expensive cars were parked," and further away were the less prestigious ones. "Any jalopies were relegated to the Siberian outer reaches of the parking lot."

Another aspect of the research involved talking to clerks and caddies in LA "on how they catered to the whims of their most moneyed patrons." The finding showed "the importance that potential customers placed on personal service at upscale shops." The team went around affluent suburban housing developments and "took detailed notes on what kinds of cars were parked outside the three-car garages of luxury condominiums and houses."

Toyota's survey found that people tended to fall into one of three categories. One, the older customers who "placed importance on a comfortable ride, lots of creature comforts," and were patriotic. Two, younger ones on fast-track careers who preferred "superb engineering" and who "wanted to make a statement to their friends and neighbours." And three, "the wealthiest and most established luxury-car buyers" who where less concerned about impressing others than with perceived value of "reliability and maintenance"; this group was not only `recession-proof' but also `open-minded' to change to an alternative "for better perceived value".

It was to `bobos' or bourgeois bohemians, as David Brooks had said, that Toyota was targeting Lexus. And the question for the designers was: "What kind of car would turn the head of a 43-year-old American male Mercedes-owner earning over $1,00,000 a year?"

The project had 24 engineering teams; "a total of 1,400 engineers, 2,300 technicians and 220 support workers — more than half the numbers assigned by Boeing to work on the 777 jumbo jet programme in the early 1990s."

450 prototypes were built. Criteria too evolved over time and were spelt out thus: "Boxier, taller profile with a distinctive grille ... a luxury sedan with a sense of intelligence, which excludes gimmick and pursues the essentials." The car that finally got approved met with harsh criticism — that it was "a thinly disguised Benz clone." And that "from either side it was the spitting image of a Mercedes 300E and the rear end mirrored that of the BMW 735i."

Dawson explains the strategy behind `derivative styling': Better safe than sorry. Huge investments are required to design a car "too far ahead of its time," and the risks are "too high to countenance."

An inspiring biography of a brand that you may prefer to have if you aren't in the L league already, and hopeful that Toyota would power fix the power brake problem in its SUVs.

BookMark@thehindu.co.in

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