The American Automotive Industry Has Long Enjoyed Domestic Sales Supremacy

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The American automotive industry has long enjoyed domestic sales supremacy, lasting through the greater part of the 20th century and driven by competition and innovation by the three largest automotive producers, General Motors, Ford, and Chrysler, and the various nameplates that each has had associated with them. However, the early to mid-1970’s saw a drastic change of position and reputation as the American economy was blasted by a fuel crisis in 1973, when OPEC nations engaged in an oil embargo, violently reducing global supply and seeing the price of oil and gasoline spike, with oil jumping 400% over 3 months (History.com, 2010). The spike in fuel prices coincided with an influx of inexpensive Japanese-built vehicles that were much…show more content…
The Japanese were better positioned as American manufactures were still struggling, with Chrysler so close to bankruptcy that Congress had to intervene with the Chrysler Corporation Loan Guarantee Act of 1979, which provided $1.5 billion to bail out Chrysler (P.L. 96-185, 1980). European cars, such as Mecedes Benz and Jaguar also developed greater market share in the U.S., but the English Pound and German Mark’s relative strength against the Japanese Yen gave the Japanese Big 3 (Honda, Datsun/Nissan, and Toyota) an extra edge over these competitors. The American manufacturers’ flat-footed response and improved perception of import quality led to growing importance of imported vehicles, with unit sales of imported vehicles exceeding 4.1 million by 1986 (Arnholt & Keenan, 1996). However, lower fuel prices and voluntary trade self-constraint by the Japanese put greater demand back on the American industry, just in time for the minivan revolution, for which Chrysler was particular well-positioned under Iacocca (Benjamin, 1999; Stepler, 1985, pp. 74-76). The 1980s and 1990s saw much investment and collaboration between domestic and foreign auto makers. Not only did the foreign acquisitions enable the domestic companies to obtain technologies to compete for
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