Japan’s improbable rise to luxury car dominance

Japan's improbable rise to luxury car dominance

A major factor aiding the new nameplates was a 1981 voluntary trade agreement that restricted imports of Japanese cars to the United States. The import restrictions, which extended into the early 1990s, and the subsequent loss of sales motivated the Japanese to make more expensive vehicles to increase their profits.

Toyota pumped a billion dollars from the 1980s into Project F1, amassing 3,700 of its top engineers. There would be a 4.0-liter V8. It would run as quietly as a… well, like a Mercedes. It would cost $40,000. (Direct response from car buyer: “$40,000 for a Japanese car?”) In the wings, the all-aluminium Acura NSX two-seater waited. At $65,000, it was the most expensive Japanese car until then. It was a stunning feat of engineering: aluminum suspension, four-channel Anti-Blocking System brakes, 270-horsepower V6 mid-engine with variable valve timing, as in VTEC.

And then there was Nissan. Infiniti was launched in 1989 with two cars: the M30, a dated coupe and the first generation Q45. Both cars were several years old when they arrived in the United States. Some reviewers compared the interiors to Japanese tapestries, and what didn’t help dispel that idea was an ad campaign featuring stones and flowers, but no car. As one comedian noted, Infiniti sales had changed little, but rocks and trees sold well.

But later vehicles, such as the 2003 G35 sports saloon and FX crossover, both established Infiniti’s engineering feats and proved popular with enthusiasts. “Made in Japan” started to mean something else.

“The three major Japanese automakers developed premium brands because they believed they could compete in the U.S. market in quality, performance and dealership experience,” said Bill Howard, a New Jersey auto analyst, adding that Lexus quickly gained sales with luxurious and sublime fitting and finishing.

“Acura was five years ahead of Lexus and Infiniti,” he continued. “But Acuras had an early reputation as nicer, sportier Hondas—both came with gearshifters—while buyers today ignore the fact that various Lexus models are just much nicer Toyotas.”

While summarizing some sales figures, Mr. Howard found that BMW, Mercedes and Lexus each ended 2021 with approximately 330,000 sales in the US.