Who Makes Lexus Cars?

Dustin Hawley | Feb 28, 2021

Though individual in its brand name and vehicle line, Lexus cars are manufactured by Toyota Motor Company and are wholly owned by the company. Until recently, Lexus was structured as a distribution channel within Toyota’s corporate structure. Their chief executive didn’t even report to Toyota’s CEO, only to one of the senior vice presidents. While this may seem ancillary, it symbolizes Lexus’s individuality and independence within the company structure. 

who makes Lexus cars

So, how did Toyota end up manufacturing luxury cars? And why did they start Lexus? To find out, we’ll have to go back to the 1980s and explore the Lexus brand’s history.

A Brief History Of Lexus - Find the best Lexus deals!

For most of the 20th century, Japanese auto manufacturers played second fiddle to American and European brands. They were generally considered cheap alternatives, and in an era where even a minimum wage worker could afford new Detroit steel, there was a shrinking market for Japanese cars.

All of that changed in the 1970s when OPEC put an embargo on US oil refineries. The resulting supply shortage caused a sustained gas price increase, creating lines around the block at gas stations for patrons desperate for a fill-up. Suddenly, American gas hogs looked like a poor investment compared to their more efficient Japanese counterparts.

Flush with financial assets, Japanese manufacturers sought to expand their reputation beyond the economy car market. In the early 1980s, both Honda and Nissan announced the creation of luxury divisions: Acura and Infiniti, respectively. Toyota responded by developing the Lexus LS sedan, a process spanning from 1983 to 1989, to go from drawing board to production.

Lexus Finds Success In The US Market - Find the best Lexus deals!

The LS was a major success in the US, and in the following years, Lexus released new coupes, SUVs, and convertibles. In what may come as a surprise to many, there were actually no Lexus-branded cars in Japan until 2005, as Lexus cars were previously sold in Japan under the Toyota imprint. 

Lexus continued its run of success, and by the end of the 2000s, the automaker had become the fourth-largest luxury manufacturer in the world, occupying the number one spot in the US for ten years straight. In 2009, they also became a hybrid-only manufacturer in the European Union.

In 2010 and 2011, Lexus embarked on an immense expansion spree. They marketed their new compact CT200h in Europe and started offering additional variants in places like China, Russia, Japan, and Taiwan.

But in 2011, disaster struck. The Tōhoku earthquake and subsequent tsunami devastated the Japanese main island. Many supply routes were heavily damaged, and those that remained intact were needed for emergency relief efforts. This led to supply shortages, causing shortfalls in production, and in 2011, Lexus’ streak at the top of the US luxury car market finally came to an end.

In light of this setback, Lexus was restructured as its own brand rather than its parent company’s distribution channel. The brand’s chief executive now reports directly to the Toyota Board of Directors, which makes them equal in standing to the Toyota brand itself.

Since this time, Lexus has recovered and even grown its business. Lexus is now offering its products in Mexico, and with this addition, its vehicles are now available in 70 countries and territories around the globe.

Where Are Lexus Cars Manufactured? - Find the best Lexus deals!

Lexus cars and SUVs are primarily manufactured at seven factories throughout Japan. They maintain overseas factories in Cambridge, Ontario, Georgetown, Kentucky, and Bidadi and Karnataka, India.

With this global manufacturing presence, different locations focus on different vehicle types. For example, Lexus produces most of its sedans and SUVs in the Aichi and Fukuoka plants in Japan. Aichi primarily produces rear-wheel-drive cars, while Fukuoka works mostly on the front-wheel drive. Additional production occurs in Higashi, Susono, Shizuoka, and Sanage, with some other factories focusing specifically on hybrid vehicles.

The hybrid gas-electric RX is also built in the Cambridge, Ontario plant. Meanwhile, ES 350 sedans are manufactured for the local market in both Kentucky and Bidadi, India.

Lexus vs. Toyota — Worth The Investment? - Find the best Lexus deals!

When it comes to deciding between a Lexus and a Toyota vehicle, a lot depends on your automotive needs. A “Battle of the Brands” face-off conducted by US News and World Report can help shed light on each brand’s appeal. In that report, the automakers were compared in 13 different categories, with Lexus rated highest in five of them: subcompact SUVs, midsize SUVs, interior, safety, and performance. They also tied with Toyota in the 4X4 SUV category. 

Although Toyota prevailed in 7 out of 13 categories (and tied in another), US News declared Lexus the winner. Why is that?

The answer is that the categories in which Lexus came out on top were deemed more important to general consumers. If a manufacturer’s vehicles are safer and offer higher performance, ratings heavily favor those factors. Similarly, Lexus’ high-end interiors provided them with a significant edge over their parent company’s fleet. The seating is often roomier and more comfortable, with increased amenities like cupholders and charging ports.

However, Toyota didn’t exactly strike out in this matchup. In the same survey, the automaker won in fuel economy, price, midsize cars, compact cars and SUVs, and large cars and SUVs. This result indicates that Toyota tends to shine when catering to consumers’ practical needs, while Lexus is more of a luxury brand.

Summary  - Find the best Lexus deals!

As outlined throughout this article, Toyota does technically own the Lexus brand, but Lexus has developed into an independent force in its own right. Toyota has its headquarters in Toyota City, Japan, while Lexus operations are headquartered in Nagoya, Japan, with Lexus operating its own centers for design, engineering, and manufacturing, since the early 2000s. After making its mark in the luxury car market here in the US, Lexus is a brand that stands alone.

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