Why have Japanese carmakers entered into a battle against European luxury brands in their own way? – Jalopnik

After overcoming initial skepticism as purveyors of low-cost products thanks to years of honing their reputations for reliability, Honda, Nissan and Toyota chose to launch new luxury brands for the American market in the late 1980s. Was it to antagonize the Europeans, to keep brand loyalists in the family, or an opportunistic outgrowth of unique economic circumstances? In fact, the answer to all three questions is ‘yes’.

The European game we are talking about starts with car importer Max Hoffman. He introduced Jaguar, Alfa Romeo, BMW, Porsche and Mercedes-Benz to the US after World War II as desirable, sporty mass alternatives to American cars. Flash-forward to the 1980s, when BMW, Mercedes-Benz and Porsche vied for yuppie space, while Saab and Volvo brought some of your favorite Swedish cars to the fancy party. Meanwhile, American auto companies were mired in a mess of quality shortages, layoffs and possible bankruptcies. As the Europeans defined the luxury market, prices for small, affordable Japanese cars exploded. American University notes that Japan had 9% of the US car market in 1976, and that this percentage had increased to 22% by 1982.

To help stabilize the U.S. auto industry, the White House negotiated an escalating three-year Voluntary Export Restraint (VER) with Japan in 1981, which began by limiting Japanese auto imports to 1.68 million vehicles per year. Within four years, VERs would lead directly to the creation of Acura, Infiniti and Lexus.

Acura came first. While the US Big Three got their act together, Japanese automakers had to build factories in the US to accommodate export restrictions, which Japan continued to adhere to until 1994 – a decade after what they were bound by. It turned out that export restrictions weren’t suppressing American demand for their cars, so Japanese automakers simply raised their prices and began introducing optional luxury equipment as standard fare.

The voluntary export restrictions gave Japanese manufacturers proof that people would pay more for their cars. But small cars meant lower profit margins, and VERs had unexpectedly financed the way for these brands to move upmarket. Honda realized that an Accord with leather seats wouldn’t be enough in the U.S. if customers wanted to upgrade to something more powerful, luxurious and prestigious, like a BMW, Mercedes-Benz or Audi. Fortunately, Honda already had such a car in the works in 1981.

That car would become the 1986 Acura Legend. The JDM Quint-Integra would join showrooms as the Acura Integra. Honda became the value brand, while the Acura division brought home luxury and performance and priced to match. Acura quotes Volvo’s North American president on the day Acura opened its doors: “With all due respect to the tremendous quality of low-priced Japanese cars,” he said, “I don’t think they will ever be able to penetrate the American luxury market.” And yet, a year later, Acura sold the Europeans.

Just as Hoffman had done, Acura presented an alternative idea of ​​luxury in a sporty guise – albeit somewhat modest, with V6 power and front-wheel drive. Then came the original 1990 NSX for Ferrari and Porsche, and it turned heads with its capabilities. In part, people were receptive to Acura’s combination of Honda reliability and luxury execution because the Europeans had become notoriously complex machines. Other Japanese brands such as Toyota followed this simplicity – and Toyota also knew something about luxury.

When the all-new Lexus LS400 and its silky-smooth V8 arrived in 1989 as a 1990 model, it exceeded expectations at a price of about $35,000 (nearly $90,000 today), which was less than a comparable Mercedes 420SEL. While Honda sidestepped taking the U.S. market to the next level, Lexus coaxed Camrys to create the ES 250, providing a perfect stepping stone from Toyota to Lexus.

After two years of development, also close to the VER windfall, Nissan launched Infiniti in 1987. Its understated 1989 Q45 flagship, with its V8 and sporty pretensions, split the difference between Acura and Lexus. It was combined with the M30 Coupé, based on the JDM Nissan Leopard. Today, still alive with performance DNA, the 2028 Infiniti Q50 could even offer a manual transmission. The other Japanese luxury brands are also established veterans, and Genesis has charted its own ambitious course in luxury. Toyota has now indicated that Century will soon become its own brand above Lexus, directly aimed at Rolls-Royce.