Japanese Autos Come to America, 1958 to 1980: A Brief History

1958-9 Toyopet Loaded for Export to U.S.

Japanese Automobiles Come in a Big Way to America

            As James Flink stated in The Automobile Age, organizational structures, policy programs and conscious planning were key to the success of the Japanese auto industry. [1]  In this case, government served as the promoter of the industry. At the heart of the success story is the Ministry of International Trade and Industry (MITI), created in 1949 to protect certain industries from foreign competition so that home industries could be competitive abroad. This was achieved by eliminating foreign competition from the domestic market. To this day, American cars in Japan are more curiosities than staples of transportation. Competition among Japanese firms was discouraged, and thus economies of scale resulted. With low wages and Union cooperation after 1953, the Japanese had a key initial advantage in their quest to penetrate American shores. But given their reputation for shoddy products, could they make cars that Americans would buy?

            While the Japanese made mostly military vehicles before WWII, the first seeds of its future growth were linked to supplying the American military during the Korean War. David Halberstam elegantly traces the emergence of the Japanese automobile industry in The Reckoning.[2] His story features a host of remarkable and powerful personalities, but perhaps two Americans were as critical as any in shaping the Japanese automobile industry. Prior to WWII, American engineer William R. Gorham played a key role in setting up the first factories and promoted a distinctive manufacturing philosophy. After 1945, statistical quality control expert W. Edwards Deming, instilled a passion for quality at a time when American automobile executives seemingly cared less.

            Deming's 14 Points, articulated in Out of the Crisis, served as management guidelines that were embraced by the Japanese.[3] The application of these points resulted in a more efficient workplace, higher profits, and increased productivity. They included the following:

• Create and communicate to all employees a statement of the aims and purposes of the company.
• Adapt to the new philosophy of the day; industries and economics are always changing.
• Build quality into a product throughout production. 
• End the practice of awarding business on the basis of price tag alone; instead, try a long-term relationship based on established loyalty and trust.
• Work to constantly improve quality and productivity.
• Institute on-the-job training.
• Teach and institute leadership to improve all job functions.
• Drive out fear; create trust.
• Strive to reduce intradepartmental conflicts.
• Eliminate exhortations for the work force; instead, focus on the system and morale.
• Eliminate work standard quotas for production. Substitute leadership methods for improvement.
• Remove barriers that rob people of pride of workmanship
• Educate with self-improvement programs.
• Include everyone in the company to accomplish the transformation.

            While the 14 points made for great publicity during the 1980s, statistical analysis was the key to Deming’s management methods. It was this merging of the quantitative with quality that made Japanese production methods so effective, with the result that “Made in Japan” meant goods of the highest precision and quality. But the Japanese have to be given credit for their efforts as well. At Toyota, lean manufacturing was pioneered after WWII. A complex system of ideas that is well described in James Womack, Daniel Jones, and Daniel Roos’s The Machine that Changed the World, lean manufacturing involved production, supply, and distribution principles that included continuous improvement with just-in-time inventories.[4] Deming’s ideas did not enter Japan in a vacuum, however. Toyoda’s culture, for example, was greatly influenced by Sakichi Toyoda, its founder.  19^th century British self-help author Samuel Smiles had an enormous impact on Sakichi; in particular Smile’s emphasis in his writings on the authority of time. K. Dennis Chambers has argued that for Smiles – and Toyoda – “Almost everything else is replaceable; time is one commodity that can be lost forever and never recovered. That truth was to become the central tenet of the Toyoda family’s search for perfection.”[5]

Beginning in 1958, both Datsun and Toyota began to import vehicles into the U.S., but the few early models were underpowered and technologically primitive.  By the late 1960s, however, both quality and performance improved dramatically. The models that exemplified this transition to competitiveness were the 1965 Toyota Corona, 1969 Datsun 240-Z and the l972 Honda Civic CVCC. The Corona proved to be remarkably well built at a time when the quality of vehicles coming from Detroit was lagging. The Datsun 240-Z became a favorite among sports car enthusiasts, especially displacing British Triumphs and MGs, and the Honda Civic offered no-nonsense, reliable, efficient, and environmentally clean transportation.

The meteoric rise in Japanese imports to the US during the late 1960s and early 1970s is best reflected in the following table:[6]

Year	Toyota	Nissan	Honda	Mazda	Mitsubishi	Subaru
1965	2,986	13,201	--	--	--	--
1966	17,423	21,037	--	--	--	--
1967	36,013	33.275	---	--	--	--
1968	71,846	40,760	9	--	--	2,884
1969	127,018	60,872	51	--	--	2,406
1970	196,749	104,067	4,159	2,083	--	5,591
1971	294,850	188,029	12,509	19,630	28,381	14,162
1972	295,915	192,707	20,500	57,850	34,057	24,056
1973	289,378	235,449	38,931	119,003	35,523	37,793
1974	238,135	189,026	43,119	61,190	42,925	22,280
1975	283,909	253,192	102,383	65,351	60,356	41,587
1976	346,920	270,103	150,929	35,383	78,972	48,928
1977	493,048	338,378	223,633	50,509	121,262	80,826
1978	441,800	338,096	274,876	75,309	103,292	103,274
1979	507,816	472,252	353,291	156,533	138,053	127,871
1980	582,204	516,890	375,388	161,623	129,350	142,968

To fully understand the rise of the Japanese industry and its subsequent transitory stagnation post-1990, one must fully explore the complexities associated with international economics and monetary policy. The split-community tax, floating yen to dollar values, tariffs, and import quotas all contributed to Japanese competitiveness in the American marketplace, along with the inability of American manufacturers to export to Japan.

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[1] James J. Flink, The Automobile Age, 327-345.

[2] David Halberstam, The Reckoning (New York: William Morrow, 1986).

[3] W. Edwards Deming, Out of the Crisis (Cambridge, MA: MIT Press, 1982).

[4] James P. Womack, Daniel T. Jones, and Daniel Roos, The Machine That Changed the World (New York: Rawson Associates, 1990).

[5] K. Dennis Chambers, Toyota. Greenwood Press: Westport, CT, 2008, pp.18-20.

[6]From C.S. Chang, The Japanese Auto Industry and the U. S. Market, New York, Praeger, 1981. P.204.  Data taken from The Automotive News.

[7]  On the history and operation of EFI, see http://bestride.com/blog/top-automotive-innovations-history-of-fuel-injection/2780/Fuel Injection, accessed 2/14/16; “A Short History of Fuel Injection,” http://www.secondchancegarage.com/public/fuel-injection.cfm, 2/14/16; http://members.rennlist.com/pbanders/djetfund.htm, accessed 2/14/16.

Mercedes-Benz at the 2016 Silvretta E-Car Rally, July 7 and 8, 2016

The Silvretta High Alpine Road in Austria's Montafon region is considered to be one of the most beautiful panoramic roads in the Alps. On 7 and 8 July 2016 it will provide the setting for the legendary Silvretta Rally, featuring 26 locally emission-free electric cars and around 190 classic cars, which spectators will be able to see on Saturday, 9 July too.

The drivers of the Mercedes-Benz plug-in hybrid vehicles will discover to their delight how effective the intelligent operating strategy is on the challenging 224-kilometre Silvretta E-Car Rally course, featuring uphill gradients of up to 14.5% and an overall difference in altitude of 11,208 metres. The 5291 metres of uphill gradients will be particularly demanding on the electric drive system, while the downhill sections (5917 metres in all) can be used for regenerative braking.

The 2016 Silvretta E-Car Rally will be Mercedes-Benz's seventh in a row and the nine models below represent the biggest participating fleet:

• The Mercedes-Benz B 250 e (three vehicles) features a 132 kW electric engine which is particularly quiet and locally emission-free. The maximum torque of 340 Nm is available from the start, which means that this model takes just 7.9 seconds to sprint from 0 to 100 km/h. With a range of around 200 km, the B 250 e is not only ideal for urban travel and short distances but for longer journeys too.
• The winner of last year's E-Rally - the Mercedes-Benz SLS AMG Coupé Electric Drive - is already a classic among electric cars. It has taken part since 2010 and has every chance of winning again this year. With peak performance of 552 kW, maximum torque of 1000 Nm and acceleration from 0 to 100 km/h in 3.9 seconds, the super sports car is the world's fastest electrically powered series-produced car.
• The Mercedes-Benz S 500 e blends an ultramodern hybrid drive configuration with the unique innovations and the luxurious equipment and appointments of the S-Class. With a system output of 325 kW and 650 Nm of torque, it accelerates from 0 to 100 km/h in just 5.2 seconds and has an all-electric range of up to 33 km. The certified consumption is 2.8 litres/100 km, which is equivalent to emissions of 65 g CO2/km.
• In the new Mercedes-Benz E 350 e (two vehicles) the combination of the 9G-TRONIC plug-in hybrid transmission and the latest generation of electric motors ensures top rankings for fuel consumption, ride comfort and dynamism. The new power electronics have allowed further increases in output and torque to 65 kW and 440 Nm respectively. Further improvements to the intelligent operating strategy, including ingenious thermal management, have also increased the efficiency of the hybrid. Depending on the driving profile, the business saloon is able to cover 18 to 33 km with no emissions, consuming just 2.1 litres of fuel per 100 kilometres (NEDC).
• The GLC 350 e 4MATIC combines agile all-wheel-drive driving pleasure with minimal consumption and emissions figures: the mid-size SUV emits only 59 g of CO2 per km and attains a top speed of 235 km/h with a best-in-class system output of 235 kW (320 hp). This part-time electric model has an all-electric and therefore emission-free range of up to 34 km, and can accelerate as required to 100 km/h in 5.9 seconds thanks to the boost function.
• The Mercedes-Benz B-Class F-CELL is almost an old hand on the route through the Alps. The fuel-cell vehicle impresses with a range of about 400 km, a power output of 100 kW and 290 Nm of torque. The technology boasts long ranges and an impressive refuelling time of around three minutes.

Daimler deliberately opts not for a solitary type of powertrain for tomorrow's mobility, but for a coexistence of different technologies. These are optimally tailored to the particular customer needs and vehicle models. "Petrol, diesel, plug-in hybrid, battery or hydrogen - all forms of drive system will continue to have their justification and prospects," emphasises Jürgen Schenk, Head of E-Drive System Integration at Daimler AG.

In the next two years Daimler will be investing 14.5 billion euros in research and development – more than half of it in 'green' technologies. We are talking about 5.4 billion euros for passenger cars alone. No other manufacturer can offer a comparable portfolio of electric vehicles and e-mobility solutions. The spectrum ranges from the smart city runabout and attractive Mercedes-Benz passenger cars to buses, coaches, and trucks of the Fuso brand. We will be electrifying all Mercedes-Benz passenger car model series step by step. In 2017 we will be launching a new petrol engine family, which will set new standards in efficiency and feature a particulate filter for the first time. At the same time we will be introducing the 48 volt on-board electrical system and starter alternators will become standard. smart is set to become the world's only car manufacturer to offer its entire model range with both combustion engines and with battery electric drive. Mercedes-Benz will put the first fuel-cell-powered vehicle with plug-in technology into series production, the GLC F-CELL. The company is also developing its own platform for battery electric cars, set be launched on the market during the current decade.

At the same time the Mercedes-Benz plug-in hybrid initiative is in full swing: following the S 500 e, the C 350 e (Saloon, Estate and long-wheelbase version for China), the GLE 500 e 4MATIC and the GLC 350 e 4MATIC, models number seven and eight - the GLC Coupé 350 e 4MATIC and the E 350 e - are set to arrive in our dealerships in 2016.

Mercedes-Benz at the 7th Arlberg Classic Car Rally, June 30-July 1, 2016

Susie Wolff in an Mercedes-Benz 300 SL at Mille Miglia 2016. Since 2016 Wolff is brand ambassador for the Daimler initiative She's Mercedes, with which the Stuttgart-based automotive manufacturer aims to put a stronger emphasis on the needs of women.

Three days, 120 classic automobiles and around 600 kilometres on dream roads between Tyrol and Bavaria: those are the key details of the seventh Arlberg Classic Car Rally, which takes place from 30 June until 1 July 2016. Mercedes-Benz Classic will be represented by two sporting classic cars from the inventory of the ALL TIME STARS vehicle trading platform. The Mercedes-Benz 350 SLC (C 107) of the ALL TIME STARS team will be driven by Susie Wolff, brand ambassador of She's Mercedes. The second vehicle to be entered in the regularity rally by the Stuttgart-based brand is a 280 SL "Pagoda" (W 113) with the Laureus Sport for Good team.

Stuttgart. The Arlberg Classic Rally is a challenging regularity rally for vehicles manufactured up until 1975. Since its first running in 2010, the rally has fascinated with its breathtaking routing over legendary Alpine roads and passes and a top-class field of starters, with no fewer than 40 classic cars from the pre-1939 period taking part in last year's event.

The entries for 2016 include a private Mercedes-Benz SSKL from 1929. The supercharged sports car dates back to the era of the international Arlberg Race, which was first held on the Arlberg road in 1927. The same road is today part of the route for the Arlberg Classic Car Rally. The winner in 1927 was Hans Stuck in an Austro Daimler.

Mercedes-Benz, the main sponsor of the Arlberg Classic Car Rally, recalls its more recent rallying successes with two factory vehicles in the starting field. Both the SL model series W 113, called the "Pagoda" because of the characteristic shape of its roof, and the SLC from the C 107 model series were triumphant in international rallies in the 1960s and 1970s. The sporting prowess of Mercedes-Benz in the decade before that is represented by several private teams. For instance, the field for the 2016 Arlberg Classic Car Rally will include several examples of the Mercedes-Benz 300 SL from model series W 198 (gullwing-door coupé and roadster).

For the around 120 classic automobiles manufactured between 1908 and 1975, the 2016 Arlberg Classic Car Rally will begin on the afternoon of 30 June (Thursday) with the Stuben prologue. The route takes in Stuben am Arlberg, Flexenpass and the Flexenpass gallery. On 1 July (Friday), the vehicles will set off on the "Castles & Lakes Tour". The competitors will drive from Lech over the Ammer Saddle into Bavaria, where, after passing the castles at Linderhof and Neuschwanstein, they will make their way back through the Allgäu and the Bregenzerwald. On 2 July (Saturday), the last stage, the "Tyrol Loop", will include Hahntennjoch and Ötz.

The brand ambassador of Mercedes-Benz at the 2016 Arlberg Classic

Susie WolffBorn on 6 December 1982 in Oban, Scotland

Susie Wolff is equally at home in the cockpits of DTM racing cars and Formula 1 racing cars. Born as Susie Stoddart in Oban on the west coast of Scotland in 1982, she began her racing career at the age of eight, initially in karting. Her parents, the owners of a motorcycle business, awakened their daughter's interest in sporty vehicles early on: she was not yet three years old when she was given a small quadbike as a present. Moreover, both her father and grandfather competed in motorcycle races, and brought the petite young girl into contact with the motor racing world at an early age. Susie Stoddart's involvement with karting became a British success story. In 2000 she then moved across to formula racing, driving in Formula Ford, Formula Renault and the British Formula 3. She was nominated twice for the renowned "British Young Driver of the Year" award. Mercedes-Benz engaged Susie Stoddart for the 2006 season as a works driver for the German Touring Car Masters. The Scottish-born driver drove for Mercedes-Benz in the DTM series for six years. In 2011 she married Toto Wolff, who became head of motorsport at Mercedes-Benz in 2013. In 2012 Susie Wolff's dream of a cockpit in Formula 1 came true, when she was engaged as a development driver for the British Williams F1 racing team until the end of 2015. Since 2016, Susie Wolff has been a brand ambassador for the company-wide initiative "She's Mercedes", with which the Stuttgart-based automotive group aims to increase its focus on the needs of women.

Oil Shock I (1973) and the American Automobile Industry

Oil Shock I

            In October 1973, OPEC (Oil Producing and Exporting Countries) placed an embargo on oil shipped to the U.S. as a result of American support to Israel during the October 1973 Yom Kippur War.[1] Gasoline, already in short supply since the United States had reached its peak of oil production in 1970, suddenly became very scarce and more costly. Lines formed at virtually every gas station that had gas. At a number of stations, color-coded signs or flags indicated availability. Eventually, even-odd license plate rationing took place, as did a federally mandated reduction in the interstate highway speed limit to 55 miles per hour. Gas station customers, once accustomed to service that included the washing of windshields and oil checks, now waited three hours or more.  The situation led to shortened tempers and fistfights, even in laid-back southern California.

            OPEC thus used oil as a weapon, and it was a weapon used well. The embargo not only brought the United States to its knees in terms of unemployment and inflation, but also increased the profits of OPEC members nearly seven-fold between 1972 and 1977. Gas prices, responding to a nervous spot market, climbed 70 percent. Along with the embargo and further price increases, OPEC announced a cut in oil production. Leonardo Maugeri recounted that, “Total Arab oil production in September 1973 had reached 19.4 million barrels per day; in November, 15.4 million.”[2]

            Conspiracy theories abounded as the price of gas ran up. Were the Arabs or the oil companies at the heart of the problem? As studies subsequently demonstrated, it was neither. Rather, the decrease in supply wasn’t the chief cause of Oil Shock I and its impact. Looking back to that time of fear and confusion, Maugeri claimed that “considering as well additional output from other parts of the world, there was never a shortfall in supply. It was not loss of supply, but fear of possible loss that drove up the price.”[3]

            Federal government action in response to the oil embargo of 1973 and 1974 was largely ineffectual, and indeed even made things worse. In response to the inflation that followed, the Federal Reserve Board attempted to contract the economy by raising interest rates, and in so doing only deepened the recession. President Nixon, already facing a crisis in confidence over Watergate, called for a $410 billion “Project Independence,” based on American efforts to develop synthetic rubber during WWII. Nixon’s proposal sought to make America energy independent by 1985, a worthy goal that none of the energy experts in Washington thought possible. Nixon’s successor, Gerald Ford, emphasized supply rather than a curtailment of demand on the part of Americans, and thus encouraged the development of nuclear power plants, an initiative that that hit a brick wall after the Three Mile Island accident in 1979. Politicians were adverse to placing blame for the energy crisis on those who were most responsible, namely the American consumer, who used a disproportionate percentage of the world’s petroleum supplies and owned more automobiles per family compared to other developed nations.

                        The oil shocks of 1973 and 1979 did more to forcefully influence Detroit’s direction in the manufacture of more fuel-efficient automobiles than federal government Corporate Average Fuel Economy (CAFE) standards and the 1978 Gas Guzzler Tax. Indeed, the shortage of petroleum products and the rise in the cost of gasoline, along with foreign competition carried more weight in transforming automotive technologies than consumer demand or government regulation.

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[1] The definitive history of the oil companies remains Daniel Yergin, The Prize (New York: Simon and Schuster, 1991), 606-666;. See also Alvin Alm and Robert J. Weiner, Oil Shock (Cambridge: Ballinger, 1984); David Frum, How We Got Here:  The 70’s (New York: Basic Books, 2000); Leonardo Maugeri, The Age of Oil: The Mythology, History, and the Future of the World’s Most Controversial Resource (Westport: Prager, 2006); David E. Nye, Consuming Power: A Social History of American Energies (Cambridge, MA: MIT Press, 2001); T. M. Rybczynski, The Economies of the Oil Crisis (New York: Holmes and Meier Publishers, 1976).

[2] Leonardo Maugeri, The Age of Oil, 113.

[3] Ibid.