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Overview 1901 - 1935 1935 - 1945 World War II 1945 - 1955 Industry Growth 1955 - 1965 Mass Production 1965 - 1975 The Environment Export Growth 1975 - 1985 Going Global 1985 - 1995 Conclusion |
Internationalization Strategies Growing Acceptance of Japanese Cars Despite the difficult global export environment in the aftermath of the 1973 oil crisis, Japan's export markets in the U.S. and Europe continued to expand with Japanese cars' growing reputation for excellent performance and superior fuel efficiency. According to a broad-ranging study by the United States Environmental Protection Agency during this period, the fuel efficiency of Japanese cars surpassed that of European cars, making Japanese cars particularly well-suited to the needs of the U.S. market. The United States was hard hit by rising gasoline prices in the late 1970s. Especially during the second oil crisis beginning in 1979, OPEC's price hikes caused gasoline prices in the United States to double. This was sufficient to transform the fuel-efficient Japanese cars from niche products to mainstream sellers. Import Policies of Leading Industrialized Nations Calls for protectionist measures to curb the sharp rise in Japanese car imports grew increasingly stronger in the United States, beginning in 1974 when the U.S. House of Representatives passed legislation reflecting this trend. In response to such moves, the Japanese government had no choice but to implement voluntary export restraints which would impose a ceiling on exports of passenger cars to the United States. From 1981 to 1983 the ceiling was 1.68 million units, from 1984 to 1985 1.85 million units, from 1986 to 1991 2.30 million units, and in 1992 exports were limited to 1.65 million units. Voluntary export restraints were finally abandoned as of 1994. France had implemented a policy of "limiting Japanese car imports to within 3% of the number of newly registered cars" since 1978, while Italy's policy towards Japan was essentially closed, limiting Japanese car imports to 2,200 units per year. First Phase of Internationalization Full-fledged joint ventures with foreign manufacturers marked the first phase of this new approach. At the time, the U.S. manufacturers GM and Ford were beginning to promote their "world car" plans aimed at producing small passenger cars on a global scale to meet the rising demand for these cars. As part of this initiative, Isuzu and Suzuki entered into international manufacturing tie-ups with GM; Toyota established a joint venture company, New United Motor Manufacturing Inc. (NUMMI), with GM in the United States; and Ford expanded and reinforced its ties with Toyo Kogyo (now Mazda) in a strategy centered on Asia and the Pacific region. Joint ventures were also established with European manufacturers during this period: between Honda and British Leyland in the United Kingdom, between Nissan and Motor Iberica in Spain, and between Nissan and Alfa Romeo in Italy. And in early 1984, Nissan was to begin production of Volkswagen's Santana at its Zama plant in Kanagawa, Japan. The Development of Local Production After construction of its Honda of America Manufacturing (HAM) plant in the state of Ohio in 1978, Honda began production there in 1982; Nissan established the Nissan Motor Manufacturing Corporation USA in Tennessee in 1983; and Toyota started producing cars at the NUMMI plant in 1984, later deciding to establish its own independent factory. Other Japanese manufacturers began automobile production in the United States and Canada: Mitsubishi (in an agreement with Chrysler), Mazda (in an agreement with Ford), Suzuki (in an agreement with GM Canada), Fuji and Isuzu, all as of 1989. In the U.K., Nissan began independent production while Honda and Isuzu began joint production with the Rover Group and GM, respectively. In Australia, Toyota had entered into manufacturing agreements as early as 1958, followed by Nissan with similar arrangements in 1966. After government restrictions limiting imports to 20% of market share went into effect in 1975, both companies obtained domestic manufacturer status and started full-scale local production "down under" in 1976. Mitsubishi began local production there after buying out Chrysler Australia in 1979. Since 1985, Japanese manufacturers have been promoting local production even more vigorously than in preceding years, as automobile production transitions into a new era of global interdependence. |
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