The 1970s OPEC oil embargo led to panic fuel buying and long lines at gas stations. What was less obvious was that it cemented the growth of higher efficiency imports from Japan, Germany and other countries. Within a decade, the mighty Detroit Big Three were struggling, facing bankruptcy and rapidly ceding market share to the upstart imports.
I came across this great Ward’s animated bar chart on U.S. annual market share by manufacturer from the American Enterprise Institute detailing trends since 1961. Below are three snap shots for 1967 and 1984 and then 2018 of how the Big Three lost market share over failing to adapt to real-world demands for better quality, less expensive and more fuel-efficient cars. And by being slow to evolve from the muscle car paradigm that had been so profitable to them for years.
A 2011 New York Times article by John Huffman aptly described Detroit’s reaction to imports as “in answering that challenge, American automakers were by the end of 1970 producing three of the most notoriously awful cars ever built — the American Motors Gremlin, Chevrolet Vega and Ford Pinto — and opening the door for the Japanese onslaught of the 1970s and 1980s.”
It’s somewhat ironic that we are now seeing this same arrogance from what is now the Big Four, including Toyota, while upstarts like Tesla and Rivian are gobbling up market share.
