Lexus is building a new kind of head office for a new era

This article was originally published here: https://www.autonews.com/automakers-suppliers/new-lexus-global-head-office-will-jumpstart-shift-evs.

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TOYOTA CITY, Japan — Lexus is up to something big and bold at a secret mountain lair taking shape in the forested hills on the outskirts of Toyota City, far from the public’s prying eye.

In a different era, the woods concealing the company’s new test track here might have thundered with the roar of V-8 engines. Now, it’s the futuristic whine of Lexus electric vehicles.

Lexus engineers — even Toyota Motor Corp. President Akio Toyoda himself — are busy testing the brand’s next-generation EVs at this little-talked-about proving ground. And soon, the secretive Shimoyama complex will play an even bigger role for Japan’s top premium player.

In March 2024, Lexus will open what amounts to its first world headquarters here. Executives say the facility will not only revolutionize the way Lexus develops cars, but speed the brand’s shift into the EV era. The new approach, they assert, will make Lexus a leader in the global EV race at a time when critics say the brand is in danger of falling behind.

“This is a next chapter initiative to improve the vehicle fundamentals, sharpen the Lexus Driving Signature and evolve design in harmony with functionality,” Lexus President Koji Sato told Automotive News about the new undertaking. “The core value is how to design and create cars that generate a desire among people to own that vehicle.”

For the first time, everyone involved with devising, developing, designing and deploying Lexus vehicles will be under the same roof, right next to their testing facilities and garages — from designers and engineers to purchasing, production and sales management, and even technicians sent by suppliers.

Lexus will finally have a house all its own. It will no longer be a collection of offices scattered among the departments and divisions of the parent company, Toyota Motor Corp. The goal is to accelerate development, improve innovation and churn out ever-better cars.

“Now we have an environment where we can really focus on Lexus,” Sato said.

The consolidation could supercharge Lexus’ transformation into an electric-only brand in Europe, the U.S. and China in 2030, when it plans to be prepared to sell 1 million EVs annually. Following that, it will offer nothing but full-electric vehicles worldwide by 2035.

Internally, Lexus calls this the “Next Chapter” of brand development.

Lexus wants its future lineup of EVs — and all vehicles — to stand out for their dreamlike driving dynamics. And Lexus will mold that driving profile at its new Shimoyama nerve center.

The next generation of Lexus products is already being put through the wringer and vetted at the facility, including the NX plug-in hybrid and the RZ full-electric crossover.

The location of the new head office is unusual for any company, let alone a global luxury brand. Lexus International will consolidate its far-flung operations into a two-tower campus being erected in a corner of the new 1,608-acre Toyota Technical Center Shimoyama.

The complex covers an area the size of 140 Tokyo Domes, the capital city’s biggest baseball stadium.

Still under construction, the mammoth proving ground and development center is nestled in mountains covered by cedar and cypress forests about 30 minutes from Toyota’s corporate headquarters in downtown Toyota City. It is reachable only by a two-lane road that winds through rice fields, Japanese cherry blossom groves and up a mountain pass. Not even one of Japan’s ubiquitous convenience stores is nearby.

The project is tucked away like some hidden fortress in a James Bond film.

The main test track to serve Lexus was among the first of Shimoyama’s facilities to go operational when it opened in 2019. Internally, the twisting strip of asphalt is called the Country Road. But the grueling 3.3-mile course also has a nickname: Mini-Nürburgring.

Full of ups and downs, blind curves and off-canter grades, it was modeled after the famous German circuit, where company president Toyoda, the company’s hot-rodding “master driver,” learned how to race. And not unlike Nürburgring’s Green Hell, Shimoyama is also cloaked in evergreens.

Its guardrails, Lexus says, are three times as strong as those on a normal test course.

“It is an especially difficult course, both on cars and people,” says Shuichi Ozaki, one of two “Takumi” expert drivers who push Lexus cars to their limits here to hone their driving feel.

Toyota has invested $2.22 billion in the entire Shimoyama complex.

Aside from the Lexus campus and Mini-Nürburgring, there will be 11 other test courses for Toyota engineers to work with. On tap are a giant high-speed oval, low-friction road, dynamic pad, multi-surface drive, handling track, hill climb and load-force strip, just to name a few.

When the whole facility goes fully operational in the fiscal year ending March 2024, some 3,300 people will be working there, including those at the Lexus campus.

The Shimoyama Technical Center will become Toyota Motor Corp.’s epicenter of all future product development. It will largely supersede the company’s Higashi Fuji Technical Center near Mount Fuji, which has been in use since the 1960s and is only a third of its size.

Even as rivals Mercedes-Benz, Audi, BMW and Genesis — not to mention Tesla — flood the market with battery-electric models, Lexus has yet to launch its first dedicated EV. That first vehicle, the Lexus RZ, will arrive toward the end of 2022. Lexus is tight-lipped about timelines for other EVs it has teased, including a super sleek BEV Sport performance car, a large SUV and a sedan.

Building an EV identity around driving dynamics could prove risky for Lexus.

Today’s EV adopters seem more enamored with digital gadgetry such as big touch screens, connectivity and automated driving than such old school mechanics as cornering rigidity, roll angle and steering input. Lexus has historically lagged its German rivals in those characteristics.

And while the Japanese brand has long prided itself on bulletproof quality and reliability, Tesla has shown that electric car fans are happy to overlook lackluster quality for cool cachet.

Another hanging question is how Lexus will sell its handling and dynamics in a future when cars drive themselves.

“It’s not a top EV brand at peer level yet,” said Takaki Nakanishi, head auto analyst at Nakanishi Research Institute in Tokyo. Lexus’ traditional brand promise, he said, is trust, reliability and safety.

“That is what has been demanded by loyal Lexus drivers,” Nakanishi said. “Lexus has a chance now to create a new ‘Lexus-ness’ in moving into electrification.”

The push is born from Akio Toyoda’s conviction that driving will always matter.

“Lexus is all about cars,” said Takashi Watanabe, chief engineer of Lexus Electrified, the division charged with making the marque gasoline-free. “Everybody at Lexus wants to be a car guy.”

Sato and Toyoda are betting that having the whole team together will sharpen Lexus’ focus for the EV shift. The question is how to shape a Lexus feel in an era when many expect autos to become commoditized by electrification.

Lexus’ answer is something it calls Lexus Driving Signature, a kind of driving character that strives to directly channel the driver’s will to the wheels.

“Drivers need to feel confident the car is 100 percent under their control,” Sato said. “We want to focus on the sensory and emotional attachment to Lexus.”

Internally at Lexus, Toyoda is referred to as the Brand Holder for his role as the arbiter of all things Lexus. He takes a keen interest in primping his premium brand. He wants to make better cars by having everyone centered on the genba, Japanese parlance for the place where the action is. To that end, the Lexus campus will be patterned after the pits and paddock of a racetrack.

The first floor of the Lexus building will be a labyrinth of garages where engineers, designers and suppliers can tinker on cars, work on prototypes and hammer out problems, before buckling up and taking the vehicles for a quick spin on the test course right outside.

Afterward, engineers can return to their computers on the second floor to brainstorm, while designers can gather in the third-floor studio to fine-tune their digital sketches. With glass walls, wide staircases and an open layout, the vibe will be one part Silicon Valley, one part pit row.

The idea is to run the car, troubleshoot, then run the car again, just like in racing.

“The more you test drive, the more issues you capture,” Sato said. “The test course has very precisely calculated road conditions. You can get a lot of feedback.”

The setup is second nature to Toyoda and Sato, who see racing as a trial-by-fire shortcut to kaizen, or improvement. Aside from running Lexus, Sato also heads Gazoo Racing, Toyota’s motorsports and tuner arm, a unit that obsesses about on-track dynamics and building better cars through competition.

Lexus global design chief Koichi Suga planned the third-floor design studio for Lexus’ 50 stylists. It will have everything from clay modeling mills to its own wood shop and paint booth.

“Now whenever we want to drive, we have to go to a different building,” Suga said. “But when we move to Shimoyama, we just go downstairs to the garage. It’s great for car development.”

Next to the Lexus building will be the Messe building. It will house yet more garage space, this time dedicated to suppliers who can set up shop. It will also have meeting rooms, as well as a cafeteria, health center, gym and yoga center, and not to be missed, that convenience store.

Cleaving off Lexus into its own isolated control tower is not without its potential downsides.

“It seems you’re being close to the racetrack but farther away from the consumers,” said Christopher Richter, lead Asia auto analyst at CLSA in Tokyo.

“There is also a risk you lose communication with the development and innovation happening in the rest of Toyota. They can’t afford to lose the synergies of being in this big organization.”

For the time being, those Lexus buildings are little more than foundations. But the Shimoyama facility is already leaving its mark on Lexus vehicles.

Lexus management makes a habit of gathering at the track to put new products through the paces, try tweaks and make quick decisions with everyone present.

With the NX, for instance, engineers trialed a dual-lock system for the corners of the hood, over the traditional single center-lock. They drove both versions and instantly agreed that the double lock delivered a tighter, stiffer drive with the hood clamped down tightly.

That latch system was then adopted on the NX and the redesigned RX crossovers.

With the electric RZ, Lexus engineers and designers hashed out the looks and functionality of its funky, horn-like spoilers in a similar fashion. Now they are fine-tuning its driving dynamics and yoke-style steer-by-wire system at Shimoyama ahead of its launch toward the end of 2022.

For designers, getting on the track — especially a challenging one like Shimoyama’s — helps them improve cockpit visibility and keep the cockpit design driver-focused and easy to use. Those real-life learnings are one reason Lexus shuns a pure touchscreen control panel and stays true to tactile buttons.

Brand Holder Toyoda even gets in on the act. He takes all new models for a three- or four-lap spin on the Mini-Nürburgring before giving a thumbs up or down. With the prototype of the new RX, he didn’t make it that far. After just one lap, he told engineers to go back to the drawing board.

They did, and Lexus is about to release what it says is the best RX ever.

“We didn’t use to have this kind of activity. We didn’t talk to each other,” Lexus design boss Suga said. “Now we all gather together and create a consistent Lexus Signature.”

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