American auto industry’s fierce comeback

The ongoing battle between America and Japan to claim the throne of the auto industry is reminiscent of David and Goliath.

In the early 1900s, companies like Ford and General Motors dominated the American car industry, only to be conquered by the more conservative Japanese manufacturers Toyota and Honda in the ‘60s and ‘70s.

Back in the auto industry’s infancy in the early 1900s, the “Big Three” — GM, Ford and Chrysler — were on top of the world and were primarily the only cars available in America.

Back in that time, since auto technologies were not as advanced as they are today and the price of oil was fairly inexpensive, American automakers produced oversized cars with massive gas-guzzling engines. The 1973 Organization of the Petroleum Exporting Countries embargo quickly changed that.

The embargo sharply increased the price of fuel, and Americans became more fuel conscious. This left a void for small Japanese and European cars to enter and the fall of the “Big Three” began.

With new competition flooding the industry, the once largest companies in the world were forced to create smaller, more efficient engines and automobiles that did not have the ingenuity to make. As the “Big Three” began to decline in sales, the Japanese automakers began to steadily rise so that in 2007, Toyota officially became the largest automaker in the world, dethroning General Motor’s 77-year run.

However, now it seems America is coming back. With the recent woes of Toyota, along with many other Japanese automakers, their once legendary reliability is now in question and, according to the former vice-chairman of General Motors, Bob Lutz, “Toyota’s God-like status will never be reclaimed.”

Only when the recession finally hit in 2008, did America’s auto industry become in dire need of life support. With the help of federal aid and government incentives, American automakers have been producing automobiles that are nothing short of perfection. Now, their competitive styling, interior and exterior, fuel efficiency and reliability all rival their Japanese counterparts.

According to Autoblog.com, Ford sales jumped by just under 43 percent and GM’s by just under 44 percent. The increase in GM sales can largely be contributed to one of its core brands, Buick, which climbed an impressive 76 percent in sales, shedding light on the reinvention of this premium luxury brand. These numbers are also descriptive of how much “dead weight” both Ford and GM had to lose, as they have both been trying their best to optimize maximum efficiency since the recent bailout.

For GM — formally consisting of Cadillac, Chevrolet, GMC, Buick, Saab, Hummer, Pontiac, Saturn, Holden, Opel and Vauxhall — “trimming the fat” meant cutting production of the Hummer, Pontiac and Saturn models, and selling Saab to another automaker, Spyker. Ford too was forced to restructure in order to increase efficiency, selling Jaguar/Land Rover to the Indian company TaTa Motors, and selling Volvo to the Chinese automaker Geely.

Sourced via www.theticker.org