Japanese Manufactuers in U.S. Luxury Car Market A

Japanese automobile manufacturers began introducing luxury models into the American market in 1989 (Flint, 1990). By 1991, all of the major Japanese manufacturers had an entry into the market. This research examines the early penetration by Japanese manufacturers in the American luxury car market.

Since 1973, the time of the first Arab Crude Oil Embargo against western countries, the automobile manufacturing industry in the United States has been on the defensive against foreign competition. The American industry suffered additional setbacks in the economic recession of the early1980s, and, although the American Big3 automobile manufacturers have made progress since the end of the recession, they continued to see their market share erode through 1989, at which time it began to stabilize (Flint, 1991). By 1989, the foreign manufacturers' share of the American new car market had reached 32 percent (Flint, 1991). In 1990, the foreign share increased to 34 percent; however, in 1991, it has fallen back to 32 percent (Flint, 1991). The most intense foreign competition is provided by the Japanese manufacturers, which hold a combined share of the American market approximating 25 percent (Leach, 1990).

While American automobile manufacturers have become accustomed to stiff competition from the Japanese manufacturers in the mid and lower segments of the American new car market, they have also been accustomed to having almost complete control of

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of of the quality circles approach lies in the significant improvements in product quality attained by all American automobile manufacturers through its introduction into the production process. There is also criticism of the precision online measurement and testing components of contemporary quality control procedures in the industry. Strangely, these criticisms of a reliance on machines rather than people tend to conflict with the criticisms of the quality circles approach. In essence, it appears that the quality circles approach, coupled with precision online test and measurement, is effective in attaining the desired levels of quality control in the industry. There can be no doubt but that the quality of Japanese automobiles provided the impetus for American manufacturers to finally put some thought and effort into their own quality control. While European quality was only somewhat superior to that of the Americans, the American automobile manufacturers felt no real need to address quality. When Japanese quality (compared to that of the American manufacturers) threatened to destroy the domestic industry, however, they began to listen. Poor quality means poor sales in the longrun. Therefore, expenditures on qual

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