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
The rapid increase in Japanese car exports was not universally welcomed, and with a struggling world economy in the wake of two "oil shocks", some of the advanced industrialized nations adopted industrial policies in the automobile sector that assumed a more and more protectionist nature.

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
The growing demand for fuel-efficient Japanese cars in the 1970s provided Japanese manufacturers with opportunities to embark on full-scale internationalization strategies which were based on local production in export market countries, transcending the framework of exports from Japan.

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
Further to their international joint venture initiatives, Japanese automobile manufacturers were also making plans to establish local production facilities, based mainly in the United States and Europe.

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.