Lexus\' pledge should be every carmaker\'s and dealer\'s commitment

HANDS ON: RICHARD TRUETT

Lexus' pledge should be every carmaker's and dealer's commitment

Richard Truett is a technology and engineering reporter for Automotive News.

The Lexus Covenant is etched in a 6½-foot slab of black granite block in the lobby of the automaker's U.S. headquarters in Plano, Texas. It includes this promise: "Lexus will treat each customer as we would a guest in our home."

At the Fixed Ops Journal Forum in Atlanta in August, I met Richard Chitty, who put these words into action nearly 30 years ago. As the Toyota luxury brand launched its debut car, the LS400, in America, it immediately faced a trio of technical problems — one of them potentially deadly.

Before he retired from Toyota more than a decade ago, Chitty held a series of senior management positions with Lexus. In fall 1989, Chitty was running parts and service as the brand rolled out at 79 U.S. dealerships.

The flagship LS400 got off to a strong start in September, but just weeks after it went on sale, three defects forced Toyota to recall about 8,000 of the cars. That was an embarrassment for a new luxury brand going up against Mercedes-Benz and BMW. Lexus' tag line, "The Relentless Pursuit of Perfection," promised unparalleled quality.

Two of the LS400's problems were minor: An improperly attached alternator wire caused batteries to drain in some cars, and the plastic housing around the third brake light could melt if the brakes were applied for long periods.

But the third problem — a faulty cruise control module that failed to disengage — put the Lexus brand in jeopardy, Chitty told me.

A dangerous defect in the 1990 Lexus LS400 threatened the luxury brand at its launch, until the automaker took urgent action.

Urgent response

How Lexus handled that early crisis remains a textbook example of the importance of taking care of customers. Each Lexus dealer mobilized crews of technicians who went to LS400 owners' homes and offices with loaner cars. Each LS400 was repaired, washed, filled with gasoline and returned with a small gift on the front seat.

Though the fix was expensive, it set the service benchmark for the brand. I asked Chitty how Toyota and Lexus executives arrived at the decision to send technicians to retrieve the cars instead of issuing a traditional recall.

Speed was important, Chitty responded. Lexus officials feared that some owners wouldn't return to the dealership promptly. The longer the cars were on the road, the greater the potential for an accident.

"The [LS400's] cruise control had two electromagnetic discs inside," Chitty recalled. "When you turned on the cruise control, electromagnetic forces pulled those two discs together. That's what locks in the speed."

But a shaft in the center of the discs had a rough surface, which prevented the discs from disengaging, Chitty explained. That meant the cruise control would not disengage either, he said.

No doubt

Lexus also was mindful of Audi's plight, Chitty added. In the mid-1980s, Audi blamed drivers for episodes of unintended acceleration that plagued its 5000 sedan. The luxury brand's reputation plunged so far so fast that Audi nearly quit the U.S. market.

After Lexus identified the serious defect in the LS400, Chitty said, "One of my colleagues, a Japanese coordinator, flew to Japan the next day." Toyota Chairman Eiji Toyoda approved the repair plan without hesitation.

The episode reassured customers that Lexus would stand behind its cars, and that helped the brand become a juggernaut. By the late 1990s, Lexus had passed Mercedes-Benz and BMW in sales and nearly every quality score. The Lexus Covenant became a key brand attribute that everyone from dealership porters to headquarters executives practiced every day.

"You could ask 100 Lexus drivers today what they like about the brand," Chitty said. "The car doesn't break and the dealer will take care of me."

Chitty still is remembered at Lexus for listing his home phone number on his business card. He told dealers and customers: "It's there to be used if you have a problem."

Today's service customers have so many choices for tires, oil changes and out-of-warranty repairs. The Lexus Covenant should be every automaker's and dealer's commitment.

You can reach Richard Truett at rtruett@crain.com

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