Toyota Motor Corporation launched the Lexus luxury vehicle division in 1989 but the project began in 1983. The Chairmen of the Toyota Motor Corporation at that time was Ejji Toyoda and he envisioned developing a line of automobiles that could compete with other luxury brands. Toyota gathered together his top executives and asked a simple question. He wanted to know if Toyota was capable of producing a luxury vehicle that could challenge the best luxury vehicles in the market. The project was to be developed under complete secrecy and was given the code name F1 (Flagship + Number one vehicle).

The project took approximately five years to complete and appears to have been a resounding success. The first of the new luxury line up to be introduced was the LS 400 with Lexus engine the finest in its large sedan class. Introduced for the 1989 model year, the LS 400 led the way in making Lexus the highest selling make of luxury automobile in the world. Toyota has introduced Lexus into 68 countries and territories around the world. Oddly enough, Toyota did not introduce Lexus into the Japanese market until 2005, although Lexus vehicles were made there entirely until 2003 when the assembly plant for the Lexus RX 300 opened in Ontario, Canada.

Since the release of the LS 400 sedan in 1989, Lexus has further expanded the line of popular vehicles to include another sedan, a coupe, a convertible and SUV models. By 2005, a hybrid line up was introduced into the Lexus fold.

Thought and attention to detail went into planning every phase of the new Toyota division and an image-consulting firm, Lippincott & Margulies was brought in to cultivate a possible list of names for the new line. The first proposal from the firm included a list of 219 potential monikers. Among the top choices included the names: Alexis, Calibre, Chaparel, Vectre and Verone. Alexis was the front-runner but was modified to Lexus as a combination of the words “luxury” and “elegance”.

Because the American market would be the primary launching platform for the new luxury line up, a team of designers made the decision to observe its target audience up close to determine what would be most appealing in a luxury vehicle. To do this, several F1 designers rented a house in Laguna Beach California to observe firsthand the lifestyle and tastes of upper middle class car-buyers. This research led Toyota to the conclusion that a completely separate line distinct from the Toyota name would be best in introducing the new luxury line up to the market. A different division, complete with new exclusive Lexus dealerships, was developed for the United States Market.

In January 1989, the new Lexus LS 400 was introduced at the North American International Auto Show in Detroit, Michigan. By September of the same year, the new luxury car went on sale for the first time.

A success from the very beginning, the Lexus LS400 sold 63,594 new models its first year. By 1991, Toyota had achieved their goal and new Lexus line claimed the title as the best selling luxury vehicle in the United States.