From the Desk of Mike (The Hammer) Garvin

Asians win 50-year battle in U.S.

U.S. auto makers produced ‘disaster after disaster’
leaving the field wide open for Asian competitors

By Mira Oberman
Independent On Line

CHICAGO — Fifty years after the first Japanese car coughed its way up the Hollywood Hills, it is hard to imagine a time when the big three U.S. vehicle makers sold 95 percent of the cars on American roads.

About half of new car sales today are going to foreign brands and Toyota, which overtook Chrysler last year, is widely expected to knock Ford Motor out of the number two spot this year.

Meanwhile, the mighty United Auto Workers (UAW) 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-unionised foreign shops.

"The first wave was a price wave," said David Cole, chairman of the Centre for Automotive Research. "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."

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 (GM) were in their golden age, building elegant status symbols that 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 those perceptions until it released the Corona in 1965, 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 US market and remained dominated by Volkswagen, which sold nearly five times as many cars as Toyota.

It was not until the oil crises and economic downturns of the 1970s that the inexpensive, fuel-efficient cars produced by Toyota and other Japanese vehicle makers 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 $1.5 billion (R9.8 billion) in guaranteed loans.

While the Japanese might have been aggressive in pursuing sales, much of the damage done to US vehicle makers was self-inflicted, said Jeremy Anwyl, president of Edmunds.com.

"If you look at the products the big three brought out ... you had car after car being introduced that were a disaster after a disaster," he said.

"This stuff went on for 15 years before they started turning things around."
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