The `domestication' of the imported-car industry continues
The ``Americanization'' of the imported-car industry is moving into the mid-1980s at an ever faster pace. Japanese and European importers are fast becoming domesticated by:
Establishing vehicle production programs in the United States.
Enlarging and ``enriching'' their new-model lineups to compete more aggressively against General Motors, Chrysler, and Ford.
With the relaxation in April of Japan's voluntary quota on car shipments to the United States, sales of foreign-built new cars have already reached a plateau of about 2.4 million units a year, close to 25 percent of the total market.
The four-year export quota imposed by the Japanese government had contributed to the stabilization of import sales and at the same time has prompted the main importers of Japanese cars to seek other avenues for expanding their US market potential. What this has meant is the shifting of some of its car-assembly operations to other parts of the world, including the US. The first overseas carmaker to undertake US production, of course, was Volkswagen, whose Rabbit subcompact went on stream in 1978 at
New Stanton, Pa., near Pittsburgh.
Since Honda's 1982 start-up of its Accord production line in Marysville, Ohio, several other Japanese producers have taken concrete steps to join the domestic assembly ranks. Nissan, Japan's No. 2 automaker, became the first importer from across the Pacific to produce pickup trucks in the US when its new plant began operations at Smyrna, Tenn. Now Nissan is also assembling the subcompact Sentra at Smyrna as well.
The largest Japanese automaker, Toyota, has joined General Motors, the largest carmaker in the world, in a precedent-setting venture to build Toyota subcompacts at a vacant Chevrolet plant in Fremont, Calif. New United Motor Manufacturing Inc. is building the Nova, its first subcompact, which now is being sold in the midsection of the US.
Besides the joint venture with GM, Toyota also is looking for a site in which to build a $500 million car-assembly plant of its own in the US where it will produce the midsize Camry model. What it will mean to Detroit is far more pressure in the profitable midsize market.
Mazda Motors has acquired an old Ford plant at Flat Rock, Mich., which it is modifying, and it is adding new facilities there to produce cars it will market itself. Mazda will also sell some of the output to Ford.
GM is breaking new ground in several other ways internationally, in addition to the Toyota pact. Ironically, Ford and Toyota had earlier sought to forge a joint-venture accord, but the talks fell through.
In the summer of 1984 GM's Chevrolet division began selling the Chevrolet Sprint in nine West Coast states, including Alaska and Hawaii. The Sprint is a 1-liter, two-door sedan built by Suzuki, in which GM has a 5 percent interest. It weighs 1,500 pounds, lighter than anything now sold in the US, and has a base price of around $5,000, lower than any other import.
Chevrolet has also added another Japanese-built car to its mix, the Spectrum by Isuzu, in which GM has a one-third ownership equity, and which is now being sold in 16 Eastern states. GM's multifaceted strategy will take a turn away from Japan to South Korea in 1986, when the Pontiac division will begin importation of a sporty subcompact from Daewoo. In 1983 GM and Daewoo formed a joint venture to assemble cars.
South Korea's largest automaker, Hyundai, began the sale of its Pony subcompact cars in Canada last year and early next year will ship the Excel to the US. Its Canadian success has far exceeded its presale expectations. Because of much lower labor costs than in Japan, many analysts expect the Koreans to play a far larger role as the source of North America's smallest cars.
To catch up with GM's array of transpacific moves, Chrysler and Ford have initiated joint-venture discussions of their own with overseas partners. Ford and Mazda are pursuing assembly of a small car at Hermosillo, Mexico, while Chrysler and Mitsubishi are studying proposals to replace the Dodge Omni/Plymouth Horizon subcompacts with cars produced through arrangements similar to the GM-Toyota setup.
US production of foreign cars reached a new dimension in 1979 when Renault purchased 46.4 percent of American Motors stock. That deal led not only to the rescue of AMC from probable bankruptcy, but to domestic output of the Renault Alliance and Encore, cars based on French-built models.