The Pre-1973 American car market was dominated by US-based manufacturers. In 1961, 75% of the US market was owned by GM and Ford, which is an insane figure in today’s standards (source). As seen in the line graph below, this number one position has been held by these two companies since 1961, but we can see that their market share percentage has been heavily impacted over the years. What has happened during this time?
The Fuel Shortage
A change in the consumer purchasing habits can be linked to the 1973 Arab-Israeli War, Arab members of the Organization of Petroleum Exporting Countries (OPEC) created an embargo against the United States in an attempt to stop them from supplying the Israeli war efforts. This resulted in a massive oil shortage which plagued the nation. During this time, American “Pony” cars were popular. Iconic cars such as the Mustang, Camaro, Impala, and Corvette sported loud and powerful V8s, which are known today as gas-guzzlers. US citizens were disappointed in the lack of variety and choice provided by homeland manufacturers, and looked elsewhere for more economic choices.
Rising Past The Market Leaders
This led to the discovery of Japanese manufacturers. Cars such as the Honda Civic and Toyota Corolla were tiny in comparison to the usual American sedans, but they were fully equipped for families, usually sporting a small, but fuel-efficient 4-cylinder, while also providing seating for five. These cars quickly rose in popularity, so much so, in fact, that the United States government was scrambling to place trade limitations and parameters on Japan by the early 1980s. These new imposed trade laws and taxes limited the amount of vehicles and steel that Japanese manufacturers could export to the United States (source). This placed a huge barrier that has yet to be passed to this day, which could explain the first and second positions which are still held by GM and Ford.
So no, the Japanese cars on roads today didn’t just appear out of nowhere. They were the result of a conflict that the United States was involved in, but results that came to stay. These tiny cars caught the attention of many during the 70s, and these impressions lasted.
Henry Ford may have created the affordable car for everyone, but the Japanese companies perfected the formula by mixing together affordability, maintainability, and utility.