How Lexus' First Ever Recall Cemented Its Name As A Luxury Carmaker

Vehicle recalls are something every car company has to deal with at some point, and they can have a major impact on brand reputation. Especially if you're talking about a new brand that's just come to market. What if that brand is a bold upstart attempting to take on the top dogs of the luxury car market with new levels of reliability? That could be a potential nightmare scenario. 

Indeed, in most cases, you'd expect a significant recall to have only a negative impact on a brand's reputation. But as we're about to see, that doesn't always have to be the case. Back in the earliest days of Lexus, the Japanese luxury brand issued a bold recall that, in the end, actually improved its reputation in 1989 and helped cement its a name as a luxury powerhouse during its pivotal infant years. Let's take a quick trip back to 1989 to see how this all unfolded.

Though we take Lexus for granted now, the late '80s launch of the brand was an extremely ambitious and risky venture for parent company Toyota. With a mission to compete with European luxury brands in the pivotal American market, Toyota invested well over a billion dollars into the launch of Lexus. Most of that cash went into the development of its flagship LS400 sedan. And it was that all-important LS400 that was the subject of Lexus' first recall in December, 1989, months after its dealerships had opened for business. 

The LS400's recall was not for a major mechanical problem or in response to a widespread customer complaint. It was actually about a few of different isolated issues that had been reported by dealers and their earliest customers. There were a couple claims of the cruise control not disengaging properly, some reports of some plastic warping around the third brake light, and possible poor battery connections that could cause the battery to deplete prematurely.

Typically, issues like this would be handled by service departments as individual warranty claims. These types of minor teething problems certainly aren't unexpected on a brand-new product. However, rather than being reactive and potentially letting these small problems spiral out of control, Lexus made the bold decision to issue a blanket recall for all 8,000 LS400s that had been sold by that point.

Though recalling every model you've sold could result in major brand harm — especially so soon after it launched — Lexus saw this as an opportunity not just to inspect and repair these possible LS400 issues, but to demonstrate the lengths they'll go in pursuit of customer satisfaction. They wanted to act quickly, with a goal to have the entire recall completed within a month. 

With lightning speed, dealers and brand representatives got in touch with every LS400 owner, offering the repairs free of charge, providing loaner cars, and completing car washes once the work was done. Dealers even went as far as to fly out extra technicians to handle the work in smaller markets. In the end, rather than putting a black mark on Lexus, the preemptive action only improved the brand's reputation among its early adopters. The same ones who would share tales of their positive experience with friends and colleagues were often luxury car customers themselves.

Some have even gone as far as to suggest that Lexus knew a recall of that magnitude wasn't necessary, but did so purposely as a way to showcase commitment to their customers. Whether it was all genuine or partially staged, the result was the same. The "Great LS400 Recall of 1989" only helped to boost Lexus' reputation as it aggressively entered a luxury car market dominated by the world's most established names.