In the US, the 1989 Lexus LS 400 turned the luxury market upside down, one of the few genuine game-changers. It was cheaper than a six-cylinder Mercedes E-Class, yet offered V8 S-Class room and performance. And its softer ride than the Mercedes’ autobahn-tuned suspension was very much to the liking of Cadillac owners. The LS 400 perfectly created a new sweet spot in the market: Mercedes-like quality; Cadillac-like ride (but not wallowy), and Toyota-like reliability. Both Mercedes and Cadillac had to makes big changes to try to compete effectively; Mercedes cut quality and its prices, and Cadillac tried to step up its game.
Who was affected more, and was it for better or for worse?