3.2. The Finest Cars, the Finest Dealers

In Chapter 2, we had a glimpse of the Lexus story to illustrate the six forces at work. Here, we revisit the Lexus to show how setting impossible goals and resolving contradictions in development and production can become self-sustaining energy within the company that powers its growth. The following three goals that Toyota set for the Lexus were not only difficult, but seemed irrational:

  1. To develop "the finest cars ever built"

  2. To build "the finest dealer network in the industry and to treat each customer as we would a guest in our home"

  3. To ensure that a Lexus with 50,000 miles on its odometer wouldn't look, feel, sound, or perform any differently from one fresh out of the factory: the anti-aging standard

The Finest Cars Ever Built

When Toyota decided to develop a luxury car for the U.S. market in the mid-1980s it faced some serious obstacles. The most expensive car it sold in the United States was the Cressida, at $16,000 retail. Luxury cars in Japan, such as Toyota's Crown and Nissan's Cedric, were classified as compact cars in the United States and lacked speed. Japanese safety regulations required that the cars have limiters built in to prevent speeds above 111.8 mph (180 km/h). Thus, the Lexus required Toyota to move into areas where it lacked knowledge and experience, forcing a reexamination of its basic technologies, from manufacturing and body techniques to procurement. In addition, the United States was the most competitive market ...

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