Japanese technicians had set out with the audacious intention of producing a luxury car that in terms of quality, engineering, refinement and performance could match - preferably, better - the plushest products from Germany that were then gracing the bays reserved for chairmen and chief executives in the company car parks.
The alarm bells rang at Mercedes-Benz, BMW and a few other companies too, because the Lexus boffins had succeeded. There was only one area where the Japanese product was lacking. In this prestigious segment, the one essential element that, as a new kid on the block - and being Japanese to boot - the superb Lexus could not deliver was image. To many people, then as now, in this segment of the market, where prestige is paramount, there is no substitute for the three-pointed star on the bonnet.
Ten years on, the picture is not so clear. Lexus has been a huge success in the US and word gets around. The Germans realised they had to pull up their socks, keep their costs down and build their products to even higher standards if they wanted to continue to strut their stuff quite so arrogantly on Quality Strasse alongside Lexus.
Now, the subjective element of the Lexus 'image' appears to have blossomed - as has its sales, helped along by the accolades it has had from the likes of JD Power - and by skilful marketing.
Prompted partly by fast-advancing German competition, Lexus itself is now moving on with the introduction of the all-new LS430, which although more curvaceous, bears a strong family resemblance to the outgoing 400, is a few inches longer, has a slightly larger, marginally more powerful and more economical engine, better aerodynamics, tweaked suspension, notably more interior space - and such a profusion of electronic gadgetry that ideally you need a private tutor to show you how to open the door, let alone get in, become supremely comfortable - and drive away.
The LS430 driver is seriously cosseted, sheltered even from the arduous task of turning a key or blipping a fob. When the doors are locked, on the approach of somebody with the electronic key in their pocket, a mere touch of the handle unlocks the door. There is a 'smart ignition' system also.
When the person with the 'key' is in the car, the engine is switched on and the steering column is unlocked by the driver just turning a switch. At the end of the journey, park the car, gently push the door closed - if you don't push hard enough, little electric motors will also take the effort out of that task for you and quietly pull the door shut - and walk away. As long as the 'key' is about your person, the doors will then lock and the immobiliser will kick in.
The technologically unconvinced company chairman - or chauffeur - can switch off the smart key system. Then, the key operates much as a conventional fob, with normal lock, unlock and boot lid opening functions.
Beneath the elegant bonnet, the 4.3-litre V8 develops about the same power as its 4.0-litre predecessor but substantially more torque lower down the rev range. (309lb.ft at 3,600rpm compared with 293 at 4,100). This extra pulling power, coupled with the silky-smooth, five-speed auto-box, makes driving the LS430 a relaxing yet rewarding experience under virtually any conditions. Changes are mostly all but imperceptible - although kick-down brings a decidedly muscular push in the back.
Inevitably, it is as a motorway cruiser that the Lexus excels. Ironically, the extreme serenity of the vehicle's interior - there is virtually no wind or mechanically induced noise - makes the occasional sound of a tyre hitting the odd cat's eye all the more noticeable. Directional stability is superb, even with quite strong cross-currents.
The car I sampled had the 'premium pack', which includes electronically modulated air suspension which maintains a constant ride height, front and rear, irrespective of the vehicle's load. The ride height can be raised by 20mm over uneven surfaces and automatically lowers at high speeds, resulting in a very low drag coefficient of 0.25 - presumably because more of the frontal area of the fat tyres is tucked up inside the wheel arches. There is also a 'sport' setting for the suspension which provides a marginally firmer ride.
The interior of the LS430 is extremely lavish and the ergonomics are excellent. In fact, Lexus claims its designers and engineers visited five-star hotels, studied luxury jewellers and watchmakers at work and even visited quality guitar makers - to learn their wood-moulding secrets. The wood panelling - a feature not to everyone's taste - is actually discreet and harmonises well with the leather trim.
The few extra inches of length allow noticeably increased interior space - particularly in the rear compartment. Front headroom has been increased by 25mm while rear headroom gains 40mm.
Standard specification - particularly in the case of the premium model - features a seemingly endless list of devices to pamper the plutocrat. There is a CD autochanger, navigation system, Mark Levinson audio set-up, curtain shield airbags front and rear, and climate control air conditioning with 'intelligent' central vents which spookily sweep from side to side to maintain the ambience just-so.
The front seats are air-conditioned, there is an electric rear window blind, headlamp washers, soft-closing for doors and boot lid, side-window double-glazing, automatically dipping exterior mirror for reversing, ISOFIX preparation, rain-sensitive windscreen wipers and electrically-adjustable rear seats. Of course, for dynamic security there is ABS, traction control and vehicle stability control. The 'premium pack' even includes what Lexus calls 'rear seat enhancements', including vibro-massage, heating and electric adjustment with memory functions.
Pricewise, a Lexus LS430 (premium) at £53,950 would compete favourably with an almost similarly equipped BMW 740L, which would cost £56,595 (+£5,095), a Mercedes Benz S-class S430 at £55,764, (+£2,624), but would be undercut by an Audi A8 4.2 quattro which would cost £53,225.46. (-£3,405.46). However, all the competition would lack some of the standard items on the Lexus menu.
Comparison with the Lexus's peers is largely academic. All are superb, contemporary offerings in a highly prestigious sector. Ten years after the launch of the first Lexus, it still comes down mainly to image.