Asian automakers winning a 50-year battle for United States pocketbooks


AFP

CHICAGO — Fifty years after the first Japanese car coughed its way up the Hollywood Hills, it’s hard to imagine a time when the Big Three U.S. automakers sold 95 percent of the cars on the road. About half of new car sales today are now going to foreign brands and Toyota, which overtook Chrysler in 2006, is widely expected to knock Ford Motor Co. out of the number two spot this year. Meanwhile, the mighty United Auto Workers union, which for generations had helped set the standard for worker benefits and wages in the U.S. , is in the midst of ceding significant ground in the face of competition from non-unionized foreign shops. “The first wave was a price wave. Then it was a fuel economy wave. Then it became a quality wave. And at every wave the Japanese imports built a position that was very strong,” said David Cole, chairman of the Center for Automotive Research. “What has developed since then is the inability (of the Big Three) to compete against well-financed, global companies that had significantly lower costs.”

It didn’t have to be that way.

The first car Toyota Motor Sales introduced after opening its U.S. operations on October 31, 1957 was a complete flop.

Ford, Chrysler and General Motors Corp. were in their golden age, building elegant status symbols which helped cement the American love affair with cars and shape the structure of American cities. Japanese products were seen as cheap and of poor quality, and Toyota did little to change perceptions.

Used as taxis on Tokyo’s bumpy post-war roads, the Toyopet was uncomfortable, plain, and had an engine so weak it that “loud, threatening noises radiated from under the hood” when it was driven up steep hills, Toyota admitted in a retrospective. Toyota had sold just 2,314 Toyopets when it was replaced in 1965 with the Corona, which was designed for American roads and drivers.

The Corona was a hit, pushing Toyota into the number two spot for import cars by 1969. But import sales comprised just 11 percent of the U.S. market and remained dominated by Volkswagen, which sold nearly five times as many cars as Toyota. It wasn’t until the oil crises and economic downturns of the 1970’s that the inexpensive, fuel efficient cars produced by Toyota and other Japanese automakers began to pose a serious challenge. By 1979, the situation was critical in Detroit when Chrysler, on the verge of bankruptcy, had to be bailed out by the federal government with US$1.5 billion in guaranteed loans.