Japanese Carmakers Invade the U.S. Automotive Industry
"?What the United States has gone through now lies in store for Europe," Dieter Zetsche, chief executive officer of Chrysler, DaimlerChrysler's U.S. arm, told Germany's Berliner Zeitung recently." Dieter was commenting on the growth of Asian cars in Europe and how this affects the European auto industry. Although the penetration of Asian carmakers in Europe has been evident since the 1980's, only recently have European auto companies reacted to the threat. Now European carmakers are scrambling to further differentiate their cars while lowering the cost of production in order to remain competitive against impeding Asian auto companies, which are quickly establishing a presence in Europe.
The loss of U.S. market share to Japanese carmakers during the eighties provides insights of what is to be expected in the European automotive industry. Edward Deming, a pioneer in operations management, first proposed his arguments regarding the minimization of production variance as a means to enhance quality to U.S. auto-makers. Uninterested by the arguments laid forth, U.S. automobile companies disregarded this approach. Toyota, however, found Deming's theories compelling and it implemented Deming's quality control approach. Other Japanese car manufacturers such as Nissan and Honda soon followed suit. The global automobile industry has not been the same since.
The efficient production capabilities Japanese auto manufacturers developed during the eighties quickly allowed them to establish a low cost competitive advantage over other passenger cars of similar class. In comparison to the American automobiles of similar class, the Japanese cars were also better in terms of quality. High fuel prices a ...