Big Three automobile manufacturers
Encyclopedia
The Big Three, when used in relation to the automotive industry
, most generally refers to the three major American automotive companies:Ford
, General Motors, and Chrysler. The term is also sometimes used in relation to the three major automakers of other countries.
, General Motors, and Chrysler are often referred to as the "Big Three" or, more recently the "Detroit Three", being the largest automakers in the United States and Canada. They were for a while the largest in the world and two of them are still a mainstay in the top five. Ford has held the position of second-ranked automaker for the past 56 years, being relegated to third in North American sales, after being overtaken by Toyota in 2007. That year, Toyota produced more vehicles than GM, though GM still outsold Toyota that year, giving GM 77 consecutive calendar years of top sales. For the first quarter of 2008, however, Toyota overtook GM in sales as well.
In the North American market, the Detroit automakers retained the top three spots, though their market share is dwindling. Honda passed Chrysler for the fourth spot in 2008 US sales. Since then, because of Toyota's woes with their recent unintended acceleration recall, Toyota has fallen back to fourth place in sales, with Honda trailing in fifth place, allowing the Detroit Three reclaim their Big Three title.
The Big Three are also distinguished not just by their size and geography, but also by their business model. The majority of their operations are unionized (United Auto Workers
and Canadian Auto Workers
), resulting in higher labor costs than other multinational automakers, including those with plants in North America. The 2005 Harbour Report estimated that Toyota's lead in labour productivity amounted to a cost advantage of $350 US to $500 US per vehicle over American manufacturers. The UAW agreed to a two-tier wage in recent 2007 negotiations, something which the CAW has so far refused. Delphi
, which was spun off from GM in 1999, filed for Chapter 11 bankruptcy after the UAW refused to cut their wages and GM is expected to be liable for a $7 billion shortfall.
In order to improve profits, the Detroit automakers made deals with unions to reduce wages while making pension and health care commitments. GM, for instance, at one time picked up the entire cost of funding health insurance premiums of its employees, their survivors and GM retirees, as the US did not have a universal health care system. With most of these plans chronically underfunded in the late 1990s, the companies have tried to provide retirement packages to older workers, and made agreements with the UAW to transfer pension obligations to an independent trust. In 2009, the CBC reported that the non-unionized Japanese automakers, with their younger American workforces and fewer retirees will continue to enjoy a cost advantage over the Big Three.
Despite the history of their marques, many long running cars have been discontinued or relegated to fleet sales
, as the Big Three shifted away resources from midsize and compact cars to lead the "SUV Craze". Since the late 1990s, over half of their profits have come from light trucks and SUVs
, while they often could not break even on compact cars unless the buyer chose options.
Ron Harbour, in releasing the Oliver Wyman
’s 2008 Harbour Report, stated that many small “econobox
es” of the past acted as loss leaders, but were designed to bring customers to the brand in the hopes they would stay loyal and move up to more profitable models. The report estimated that an automaker needed to sell ten small cars to make the same profit as one big vehicle, and that they had to produce small and mid-size cars profitably to succeed, something that the Detroit three had trouble doing.
SUV sales peaked in 1999 but have not returned to that level ever since, due to high gas prices. The Big Three have suffered from perceived inferior initial quality and reliability compared to their Japanese counterparts, which has been difficult to overcome. They have also been slow to bring new vehicles to the market, while the Japanese are also considered the leader at producing smaller, fuel-efficient cars.
Falling sales and market share have resulted in the Big Three's plants operating below capacity (GM's plants were at 85% in November 2005, well below the plants of its Asian competitors), leading to production cuts, plant closures and layoffs. They have been relying heavily on considerable incentives and subsidized leases to sell vehicles. which was crucial to keeping the plants running, which in turn drove a significant portion of the Michigan economy. These promotional strategies, including rebates, employee pricing and 0% financing, have boosted sales but have also cut into profits. More importantly such promotions drain the automaker's cash reserves in the near term while in the long run the company suffers the stigma of selling vehicles because of low price instead of technical merit. Automakers have since been trying to scale back on incentives and raise prices, while cutting production. The subprime mortgage crisis
and high oil prices in 2008 resulting in the plummeting popularity of best-selling trucks and SUVs, perhaps forcing automakers to continue offering heavy incentives to help clear excess inventory.
The Big Three sued California
Governor Arnold Schwarzenegger
to prevent a tailpipe emissions requirement. In response, Governor Schwarzenegger told the Big Three to "get off their butt".
In 2008, with high oil prices and a declining US economy due to the subprime mortgage crisis
, the Big Three are rethinking their strategy, idling or converting light truck plants to make small cars. Due to the declining residual value of their vehicles, Chrysler has stopped offering leases on its vehicles.
In 2009, General Motors and Chrysler filed for and emerged from Chapter 11 restructuring in the United States. General Motors of Canada did not file for bankruptcy. The United States and Canadian government control are reported as temporary. On June 10, 2009, Chrysler Group LLC emerged from a Chapter 11
reorganization bankruptcy and was sold to the Italian
automaker Fiat
. On June 3, 2011, Fiat bought out the remaining U.S. Treasury’s stake in Chrysler for $500 million increasing its ownership of the automaker to 52% .
, among many others, have long been considered the leaders at producing smaller, fuel-efficient cars. Their vehicles were brought to the forefront, due to the 1973 oil crisis
which had a major impact on the auto industry. For instance, the Honda Civic
was considered superior to American competitors such as the Chevrolet Vega
and Ford Pinto
. The Civic is the best-selling car in Canada
for 12 straight years in a row.,
As well, the Nissan 240Z was introduced
at a relatively low price compared to other foreign sports cars of the time (Jaguar, BMW
, Porsche
, etc.), while providing performance, reliability, and good looks. This broadened the image of Japanese car-makers beyond their econobox successes, as well as being credited as a catalyst for the import performance parts industry.
Before Honda unveiled Acura
in 1986, Japanese automobiles exports were primarily economical in design and largely targeted at low-cost consumers. The Japanese big three created their luxury marques to challenge the established brands. Following Honda's lead, Toyota launched the Lexus
name with the LS 400
which debuted at $38,000 in the U.S., in some markets being priced against mid-sized six cylinder Mercedes-Benz
and BMW
models), and was rated by Car and Driver
magazine as better than both the $63,000 Mercedes-Benz 420 SEL
and the $55,000 BMW 735i
in terms of ride, handling and performance. It was generally regarded as a major shock to the European marques; BMW and Mercedes-Benz's U.S. sales figures dropped 29% and 19%, respectively, with the then-BMW chairman Eberhard von Kuenheim accusing Lexus of dumping in that market. Nissan's Infiniti
became a player on the luxury market mostly thanks to its popular Q45
. The vehicle included a class-leading (at the time) 278 hp (207 kW
) V8 engine, four wheel steering, the first active suspension
system offered on a motor vehicle, and numerous interior luxury appointments. These made it competitive against the German
imports like Audi
, BMW
and Mercedes-Benz
, which by the time of Infiniti's release had overtaken Cadillac
and Lincoln
in dominating the luxury segment of the American market. In 1990, four years after the debut of the Legend and Integra, Acura introduced the NSX, a midship V6 powered, rear-wheel-drive sports car. The NSX, an acronym for "New Sports eXperimental", was billed as the first Japanese car capable of competing with Ferrari
and Porsche
. This vehicle served as a halo car for the Acura brand. The NSX was the world's first all-aluminum production car, and was also marketed and viewed by some as the "Everyday Supercar" thanks in part to its ease of use, quality and reliability, traits that were unheard of in the supercar segment at the time.
The success of the Japanese automakers contributed to their American counterparts falling into a recession in the late 1970s. Unions and lobbyists in both North America and Europe put pressure on their government to restrict imports. In 1981, Japan agreed to Voluntary Export Restraints
in order to preempt protectionism
measures that the US may have taken, where it be tariff
s or import quota
s. Consequently, Japanese companies responded by investing heavily in US production facilities, as they were not subject to the VER. Unlike the plants of domestic automakers, Japanese plants are non-unioned (save for NUMMI
), so they have lower wage expenses and do not face the risk of strikes. The VER was lifted in 1994 upon agreement of all members of General Agreement on Tariffs and Trade
(GATT). Establishing US production facilities was also a significant step in improving public relations, along with philanthropy, lobbying efforts, and sharing technology. Europe has still largely maintained its protectionism policies against Japanese cars, though their varies considerably.
Toyota has always been by far Japan's largest automaker, and it recently overtook perennial world leader GM in both production and sales by early 2008. As the most aggressive of Japan's companies when it came to expanding into light trucks and luxury vehicles, this proved largely successful. Their high-end brand Lexus
became the top-selling luxury marque worldwide in 2000, despite being only started up in 1989. Consequently, Toyota's stock price has traded at a much higher premium than other automakers. Nissan was formerly in second place, until financial difficulties in the late 1990s caused it to lose its place to Honda. Honda is Japan’s second largest automaker and ranks sixth in the world, behind Toyota, GM, Volkswagen, Ford, and Hyundai. Mitsubishi and Mazda
are in a distant fourth and fifth place compared to the Japanese Big Three.
Toyota, Honda, and Nissan are all in the BusinessWeek magazine's The 100 Top Global Brands by dollar value, as ranked by leading brand consultancy Interbrand. The Toyota marque was valued at US$22.67 billion, ranking it ninth among all global brand names - automotive or non-automotive, edging out that of Mercedes-Benz.
, BMW
and Audi
are often referred to as "Germany's Big Three", although the actual major automobile manufacturers are the Volkswagen Group
(producer of Audi) and Daimler AG (producer of Mercedes-Benz), along with BMW.
Volkswagen Group has long been the largest automaker in Europe. As of 2007 it edged out Ford
to rank third in the world after General Motors
and Toyota. It is also the parent group of Audi
, Porsche
, SEAT
, Škoda
, Bugatti
, Lamborghini
and Bentley
.
Daimler AG holds major stakes in other automakers including Mitsubishi Fuso
.
BMW also produces MINI
branded vehicles, and has been the parent company of Rolls-Royce Motor Cars
since 1998.
BMW, Mercedes-Benz and Audi make up about 86% of the luxury midsize market.
Automotive industry
The automotive industry designs, develops, manufactures, markets, and sells motor vehicles, and is one of the world's most important economic sectors by revenue....
, most generally refers to the three major American automotive companies:Ford
Ford Motor Company
Ford Motor Company is an American multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford and Lincoln brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK...
, General Motors, and Chrysler. The term is also sometimes used in relation to the three major automakers of other countries.
United States and Canada
FordFord Motor Company
Ford Motor Company is an American multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford and Lincoln brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK...
, General Motors, and Chrysler are often referred to as the "Big Three" or, more recently the "Detroit Three", being the largest automakers in the United States and Canada. They were for a while the largest in the world and two of them are still a mainstay in the top five. Ford has held the position of second-ranked automaker for the past 56 years, being relegated to third in North American sales, after being overtaken by Toyota in 2007. That year, Toyota produced more vehicles than GM, though GM still outsold Toyota that year, giving GM 77 consecutive calendar years of top sales. For the first quarter of 2008, however, Toyota overtook GM in sales as well.
In the North American market, the Detroit automakers retained the top three spots, though their market share is dwindling. Honda passed Chrysler for the fourth spot in 2008 US sales. Since then, because of Toyota's woes with their recent unintended acceleration recall, Toyota has fallen back to fourth place in sales, with Honda trailing in fifth place, allowing the Detroit Three reclaim their Big Three title.
The Big Three are also distinguished not just by their size and geography, but also by their business model. The majority of their operations are unionized (United Auto Workers
United Auto Workers
The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, better known as the United Auto Workers , is a labor union which represents workers in the United States and Puerto Rico, and formerly in Canada. Founded as part of the Congress of Industrial...
and Canadian Auto Workers
Canadian Auto Workers
The Canadian Auto Workers is one of Canada's largest and highest profile social unions. While rooted in Ontario's large auto plants of Windsor, Brampton, Oakville, St...
), resulting in higher labor costs than other multinational automakers, including those with plants in North America. The 2005 Harbour Report estimated that Toyota's lead in labour productivity amounted to a cost advantage of $350 US to $500 US per vehicle over American manufacturers. The UAW agreed to a two-tier wage in recent 2007 negotiations, something which the CAW has so far refused. Delphi
Delphi (auto parts)
Delphi Automotive PLC is an automotive parts company headquartered in Troy, Michigan, USA. Delphi is one of the world's largest automotive parts manufacturers and has approximately 146,600 employees ....
, which was spun off from GM in 1999, filed for Chapter 11 bankruptcy after the UAW refused to cut their wages and GM is expected to be liable for a $7 billion shortfall.
In order to improve profits, the Detroit automakers made deals with unions to reduce wages while making pension and health care commitments. GM, for instance, at one time picked up the entire cost of funding health insurance premiums of its employees, their survivors and GM retirees, as the US did not have a universal health care system. With most of these plans chronically underfunded in the late 1990s, the companies have tried to provide retirement packages to older workers, and made agreements with the UAW to transfer pension obligations to an independent trust. In 2009, the CBC reported that the non-unionized Japanese automakers, with their younger American workforces and fewer retirees will continue to enjoy a cost advantage over the Big Three.
Despite the history of their marques, many long running cars have been discontinued or relegated to fleet sales
, as the Big Three shifted away resources from midsize and compact cars to lead the "SUV Craze". Since the late 1990s, over half of their profits have come from light trucks and SUVs
Sport utility vehicle
A sport utility vehicle is a generic marketing term for a vehicle similar to a station wagon, but built on a light-truck chassis. It is usually equipped with four-wheel drive for on- or off-road ability, and with some pretension or ability to be used as an off-road vehicle. Not all four-wheel...
, while they often could not break even on compact cars unless the buyer chose options.
Ron Harbour, in releasing the Oliver Wyman
Oliver Wyman
Oliver Wyman is an international management consulting firm. Founded in 1984, the firm adopted its current form in May 2007, when Mercer Oliver Wyman joined with Mercer Management Consulting and Mercer Delta to become one firm named Oliver Wyman. Oliver Wyman is headquartered in New York City with...
’s 2008 Harbour Report, stated that many small “econobox
Econobox
An econobox is a US slang term for any of a series of small, boxy, fuel-efficient car with few luxuries and a low sticker price.-Description:...
es” of the past acted as loss leaders, but were designed to bring customers to the brand in the hopes they would stay loyal and move up to more profitable models. The report estimated that an automaker needed to sell ten small cars to make the same profit as one big vehicle, and that they had to produce small and mid-size cars profitably to succeed, something that the Detroit three had trouble doing.
SUV sales peaked in 1999 but have not returned to that level ever since, due to high gas prices. The Big Three have suffered from perceived inferior initial quality and reliability compared to their Japanese counterparts, which has been difficult to overcome. They have also been slow to bring new vehicles to the market, while the Japanese are also considered the leader at producing smaller, fuel-efficient cars.
Falling sales and market share have resulted in the Big Three's plants operating below capacity (GM's plants were at 85% in November 2005, well below the plants of its Asian competitors), leading to production cuts, plant closures and layoffs. They have been relying heavily on considerable incentives and subsidized leases to sell vehicles. which was crucial to keeping the plants running, which in turn drove a significant portion of the Michigan economy. These promotional strategies, including rebates, employee pricing and 0% financing, have boosted sales but have also cut into profits. More importantly such promotions drain the automaker's cash reserves in the near term while in the long run the company suffers the stigma of selling vehicles because of low price instead of technical merit. Automakers have since been trying to scale back on incentives and raise prices, while cutting production. The subprime mortgage crisis
Subprime mortgage crisis
The U.S. subprime mortgage crisis was one of the first indicators of the late-2000s financial crisis, characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backed by said mortgages....
and high oil prices in 2008 resulting in the plummeting popularity of best-selling trucks and SUVs, perhaps forcing automakers to continue offering heavy incentives to help clear excess inventory.
The Big Three sued California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
Governor Arnold Schwarzenegger
Arnold Schwarzenegger
Arnold Alois Schwarzenegger is an Austrian-American former professional bodybuilder, actor, businessman, investor, and politician. Schwarzenegger served as the 38th Governor of California from 2003 until 2011....
to prevent a tailpipe emissions requirement. In response, Governor Schwarzenegger told the Big Three to "get off their butt".
In 2008, with high oil prices and a declining US economy due to the subprime mortgage crisis
Subprime mortgage crisis
The U.S. subprime mortgage crisis was one of the first indicators of the late-2000s financial crisis, characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backed by said mortgages....
, the Big Three are rethinking their strategy, idling or converting light truck plants to make small cars. Due to the declining residual value of their vehicles, Chrysler has stopped offering leases on its vehicles.
In 2009, General Motors and Chrysler filed for and emerged from Chapter 11 restructuring in the United States. General Motors of Canada did not file for bankruptcy. The United States and Canadian government control are reported as temporary. On June 10, 2009, Chrysler Group LLC emerged from a Chapter 11
Chapter 11, Title 11, United States Code
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most...
reorganization bankruptcy and was sold to the Italian
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
automaker Fiat
Fiat
FIAT, an acronym for Fabbrica Italiana Automobili Torino , is an Italian automobile manufacturer, engine manufacturer, financial, and industrial group based in Turin in the Italian region of Piedmont. Fiat was founded in 1899 by a group of investors including Giovanni Agnelli...
. On June 3, 2011, Fiat bought out the remaining U.S. Treasury’s stake in Chrysler for $500 million increasing its ownership of the automaker to 52% .
Japan
Japanese automakers Toyota, Nissan, and HondaHonda
is a Japanese public multinational corporation primarily known as a manufacturer of automobiles and motorcycles.Honda has been the world's largest motorcycle manufacturer since 1959, as well as the world's largest manufacturer of internal combustion engines measured by volume, producing more than...
, among many others, have long been considered the leaders at producing smaller, fuel-efficient cars. Their vehicles were brought to the forefront, due to the 1973 oil crisis
1973 oil crisis
The 1973 oil crisis started in October 1973, when the members of Organization of Arab Petroleum Exporting Countries or the OAPEC proclaimed an oil embargo. This was "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war. It lasted until March 1974. With the...
which had a major impact on the auto industry. For instance, the Honda Civic
Honda Civic
The Honda Civic is a line of subcompact and subsequently compact cars made and manufactured by Honda. The Civic, along with the Accord and Prelude, comprised Honda's vehicles sold in North America until the 1990s, when the model lineup was expanded...
was considered superior to American competitors such as the Chevrolet Vega
Chevrolet Vega
The Chevrolet Vega is a subcompact, two-door automobile that was produced by the Chevrolet division of General Motors for the 1971-1977 model years. Named after the star Vega, the car was powered by a lightweight aluminum-block inline four-cylinder engine...
and Ford Pinto
Ford Pinto
The Ford Pinto is a subcompact car produced by the Ford Motor Company for the model years 1971–1980. The car's name derives from the Pinto horse. Initially offered as a two-door sedan, Ford offered "Runabout" hatchback and wagon models the following year, competing in the U.S. market with the AMC...
. The Civic is the best-selling car in Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
for 12 straight years in a row.,
As well, the Nissan 240Z was introduced
Nissan Z-car
The Z-car is a series of sports cars manufactured by Nissan Motors Ltd.. The original Z was sold in October 1969 in Japan as the Nissan Fairlady Z and was sold in Japan at Nissan Exhibition dealerships that previously sold the Nissan Bluebird. It was exported as the Datsun 240Z. Since 2009 Nissan...
at a relatively low price compared to other foreign sports cars of the time (Jaguar, BMW
BMW
Bayerische Motoren Werke AG is a German automobile, motorcycle and engine manufacturing company founded in 1916. It also owns and produces the Mini marque, and is the parent company of Rolls-Royce Motor Cars. BMW produces motorcycles under BMW Motorrad and Husqvarna brands...
, Porsche
Porsche
Porsche Automobil Holding SE, usually shortened to Porsche SE a Societas Europaea or European Public Company, is a German based holding company with investments in the automotive industry....
, etc.), while providing performance, reliability, and good looks. This broadened the image of Japanese car-makers beyond their econobox successes, as well as being credited as a catalyst for the import performance parts industry.
Before Honda unveiled Acura
Acura
Acura is the luxury vehicle division of Japanese automaker Honda Motor Company. The brand has been available in the United States and Canada since March 1986, marketing luxury, performance, and near-performance vehicles. It was introduced to Hong Kong in 1991, Mexico in 2004, and China in 2006...
in 1986, Japanese automobiles exports were primarily economical in design and largely targeted at low-cost consumers. The Japanese big three created their luxury marques to challenge the established brands. Following Honda's lead, Toyota launched the Lexus
Lexus
is the luxury vehicle division of Japanese automaker Toyota Motor Corporation. First introduced in 1989 in the United States, Lexus is now sold globally and has become Japan's largest-selling make of premium cars. The Lexus marque is marketed in over 70 countries and territories worldwide, and has...
name with the LS 400
Lexus LS
The Lexus LS is a full-size luxury sedan that serves as the flagship model of Lexus, the luxury division of Toyota. Four generations of the sedan have been produced, all equipped with V8 engines and rear-wheel drive, although since 2006 all-wheel drive, hybrid, and long-wheelbase variants have also...
which debuted at $38,000 in the U.S., in some markets being priced against mid-sized six cylinder Mercedes-Benz
Mercedes-Benz
Mercedes-Benz is a German manufacturer of automobiles, buses, coaches, and trucks. Mercedes-Benz is a division of its parent company, Daimler AG...
and BMW
BMW
Bayerische Motoren Werke AG is a German automobile, motorcycle and engine manufacturing company founded in 1916. It also owns and produces the Mini marque, and is the parent company of Rolls-Royce Motor Cars. BMW produces motorcycles under BMW Motorrad and Husqvarna brands...
models), and was rated by Car and Driver
Car and Driver
Car and Driver is an American automotive enthusiast magazine. Its total circulation is 1.31 million. It is owned by Hearst Magazines, who purchased prior owner Hachette Filipacchi Media U.S. in 2011...
magazine as better than both the $63,000 Mercedes-Benz 420 SEL
Mercedes-Benz W126
The Mercedes-Benz W126 is a series of flagship vehicles manufactured by German automotive marque Mercedes-Benz. Premiering in September 1979 as the successor to the earlier W116 line, the W126 was the second generation of the Mercedes-Benz flagship to officially bear the S-Class name referring to...
and the $55,000 BMW 735i
BMW E32
After almost 7 years in development since September 1979, in July 1986, BMW introduced the second generation of the 7 series, known internally as the E32. Aimed at the high end of the luxury market, the car offered some of the latest innovations in automotive technology, and a new, top-of-the-line...
in terms of ride, handling and performance. It was generally regarded as a major shock to the European marques; BMW and Mercedes-Benz's U.S. sales figures dropped 29% and 19%, respectively, with the then-BMW chairman Eberhard von Kuenheim accusing Lexus of dumping in that market. Nissan's Infiniti
Infiniti
is the luxury division of automaker Nissan. Infiniti officially started selling vehicles on November 8, 1989 in North America. Marketing operations have since grown to include the Middle East, South Korea, Russia, Taiwan, China, Ukraine and the United Kingdom. Infiniti began sales in additional...
became a player on the luxury market mostly thanks to its popular Q45
Infiniti Q45
The Infiniti Q45 was a full-size luxury car sold by Nissan's Infiniti marque from 1990 until 2006. It is a rear wheel drive, four-door sedan powered by a V8 engine. Early generations were based on the automaker's Japanese-market flagship sedan, the Nissan President, while models produced after 1997...
. The vehicle included a class-leading (at the time) 278 hp (207 kW
Watt
The watt is a derived unit of power in the International System of Units , named after the Scottish engineer James Watt . The unit, defined as one joule per second, measures the rate of energy conversion.-Definition:...
) V8 engine, four wheel steering, the first active suspension
Active suspension
Active or adaptive suspension is an automotive technology that controls the vertical movement of the wheels with an onboard system rather than the movement being determined entirely by the road surface...
system offered on a motor vehicle, and numerous interior luxury appointments. These made it competitive against the German
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
imports like Audi
Audi
Audi AG is a German automobile manufacturer, from supermini to crossover SUVs in various body styles and price ranges that are marketed under the Audi brand , positioned as the premium brand within the Volkswagen Group....
, BMW
BMW
Bayerische Motoren Werke AG is a German automobile, motorcycle and engine manufacturing company founded in 1916. It also owns and produces the Mini marque, and is the parent company of Rolls-Royce Motor Cars. BMW produces motorcycles under BMW Motorrad and Husqvarna brands...
and Mercedes-Benz
Mercedes-Benz
Mercedes-Benz is a German manufacturer of automobiles, buses, coaches, and trucks. Mercedes-Benz is a division of its parent company, Daimler AG...
, which by the time of Infiniti's release had overtaken Cadillac
Cadillac
Cadillac is an American luxury vehicle marque owned by General Motors . Cadillac vehicles are sold in over 50 countries and territories, but mostly in North America. Cadillac is currently the second oldest American automobile manufacturer behind fellow GM marque Buick and is among the oldest...
and Lincoln
Lincoln (automobile)
Lincoln is an American luxury vehicle brand of the Ford Motor Company. Lincoln vehicles are sold mostly in North America.-History:The company was founded in August 1915 by Henry M. Leland, one of the founders of Cadillac . During World War I, he left Cadillac which was sold to General Motors...
in dominating the luxury segment of the American market. In 1990, four years after the debut of the Legend and Integra, Acura introduced the NSX, a midship V6 powered, rear-wheel-drive sports car. The NSX, an acronym for "New Sports eXperimental", was billed as the first Japanese car capable of competing with Ferrari
Ferrari
Ferrari S.p.A. is an Italian sports car manufacturer based in Maranello, Italy. Founded by Enzo Ferrari in 1929, as Scuderia Ferrari, the company sponsored drivers and manufactured race cars before moving into production of street-legal vehicles as Ferrari S.p.A. in 1947...
and Porsche
Porsche
Porsche Automobil Holding SE, usually shortened to Porsche SE a Societas Europaea or European Public Company, is a German based holding company with investments in the automotive industry....
. This vehicle served as a halo car for the Acura brand. The NSX was the world's first all-aluminum production car, and was also marketed and viewed by some as the "Everyday Supercar" thanks in part to its ease of use, quality and reliability, traits that were unheard of in the supercar segment at the time.
The success of the Japanese automakers contributed to their American counterparts falling into a recession in the late 1970s. Unions and lobbyists in both North America and Europe put pressure on their government to restrict imports. In 1981, Japan agreed to Voluntary Export Restraints
Voluntary Export Restraints
A voluntary export restraint or voluntary export restriction is a government imposed limit on the quantity of goods that can be exported out of a country during a specified period of time....
in order to preempt protectionism
Protectionism
Protectionism is the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to allow "fair competition" between imports and goods and services produced domestically.This...
measures that the US may have taken, where it be tariff
Tariff
A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....
s or import quota
Import quota
An import quota is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time....
s. Consequently, Japanese companies responded by investing heavily in US production facilities, as they were not subject to the VER. Unlike the plants of domestic automakers, Japanese plants are non-unioned (save for NUMMI
NUMMI
New United Motor Manufacturing, Inc. was an automobile manufacturing plant in Fremont, California, opened in 1984 and closed in 2010. On October 27, 2010 it reopened as a 100% Tesla Motors-owned production facility, known as the Tesla Factory...
), so they have lower wage expenses and do not face the risk of strikes. The VER was lifted in 1994 upon agreement of all members of General Agreement on Tariffs and Trade
General Agreement on Tariffs and Trade
The General Agreement on Tariffs and Trade was negotiated during the UN Conference on Trade and Employment and was the outcome of the failure of negotiating governments to create the International Trade Organization . GATT was signed in 1947 and lasted until 1993, when it was replaced by the World...
(GATT). Establishing US production facilities was also a significant step in improving public relations, along with philanthropy, lobbying efforts, and sharing technology. Europe has still largely maintained its protectionism policies against Japanese cars, though their varies considerably.
Toyota has always been by far Japan's largest automaker, and it recently overtook perennial world leader GM in both production and sales by early 2008. As the most aggressive of Japan's companies when it came to expanding into light trucks and luxury vehicles, this proved largely successful. Their high-end brand Lexus
Lexus
is the luxury vehicle division of Japanese automaker Toyota Motor Corporation. First introduced in 1989 in the United States, Lexus is now sold globally and has become Japan's largest-selling make of premium cars. The Lexus marque is marketed in over 70 countries and territories worldwide, and has...
became the top-selling luxury marque worldwide in 2000, despite being only started up in 1989. Consequently, Toyota's stock price has traded at a much higher premium than other automakers. Nissan was formerly in second place, until financial difficulties in the late 1990s caused it to lose its place to Honda. Honda is Japan’s second largest automaker and ranks sixth in the world, behind Toyota, GM, Volkswagen, Ford, and Hyundai. Mitsubishi and Mazda
Mazda
is a Japanese automotive manufacturer based in Fuchū, Aki District, Hiroshima Prefecture, Japan.In 2007, Mazda produced almost 1.3 million vehicles for global sales...
are in a distant fourth and fifth place compared to the Japanese Big Three.
Toyota, Honda, and Nissan are all in the BusinessWeek magazine's The 100 Top Global Brands by dollar value, as ranked by leading brand consultancy Interbrand. The Toyota marque was valued at US$22.67 billion, ranking it ninth among all global brand names - automotive or non-automotive, edging out that of Mercedes-Benz.
Germany
The German trio Mercedes-BenzMercedes-Benz
Mercedes-Benz is a German manufacturer of automobiles, buses, coaches, and trucks. Mercedes-Benz is a division of its parent company, Daimler AG...
, BMW
BMW
Bayerische Motoren Werke AG is a German automobile, motorcycle and engine manufacturing company founded in 1916. It also owns and produces the Mini marque, and is the parent company of Rolls-Royce Motor Cars. BMW produces motorcycles under BMW Motorrad and Husqvarna brands...
and Audi
Audi
Audi AG is a German automobile manufacturer, from supermini to crossover SUVs in various body styles and price ranges that are marketed under the Audi brand , positioned as the premium brand within the Volkswagen Group....
are often referred to as "Germany's Big Three", although the actual major automobile manufacturers are the Volkswagen Group
Volkswagen Group
Volkswagen Group is a German multinational automobile manufacturing group. , Volkswagen was ranked as the world’s third largest motor vehicle manufacturer and Europe's largest....
(producer of Audi) and Daimler AG (producer of Mercedes-Benz), along with BMW.
Volkswagen Group has long been the largest automaker in Europe. As of 2007 it edged out Ford
Ford Motor Company
Ford Motor Company is an American multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford and Lincoln brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK...
to rank third in the world after General Motors
General Motors
General Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
and Toyota. It is also the parent group of Audi
Audi
Audi AG is a German automobile manufacturer, from supermini to crossover SUVs in various body styles and price ranges that are marketed under the Audi brand , positioned as the premium brand within the Volkswagen Group....
, Porsche
Porsche
Porsche Automobil Holding SE, usually shortened to Porsche SE a Societas Europaea or European Public Company, is a German based holding company with investments in the automotive industry....
, SEAT
SEAT
SEAT, S.A. is a Spanish automobile manufacturer founded on May 9, 1950 by the Instituto Nacional de Industria , a state-owned industrial holding company....
, Škoda
Škoda Auto
Škoda Auto , more commonly known as Škoda, is an automobile manufacturer based in the Czech Republic. Škoda became a wholly owned subsidiary of the Volkswagen Group in 2000, positioned as the entry brand to the group...
, Bugatti
Bugatti Automobiles SAS
Bugatti Automobiles S.A.S. is an automobile manufacturer located in Molsheim, Alsace, France. It is owned by the German automobile manufacturing group Volkswagen Group as a subsidiary of Volkswagen France...
, Lamborghini
Lamborghini
Automobili Lamborghini S.p.A., commonly referred to as Lamborghini , is an Italian car manufacturer. The company was founded by manufacturing magnate Ferruccio Lamborghini in 1963, with the objective of producing a refined grand touring car to compete with established offerings from marques like...
and Bentley
Bentley
Bentley Motors Limited is a British manufacturer of automobiles founded on 18 January 1919 by Walter Owen Bentley known as W.O. Bentley or just "W O". Bentley had been previously known for his range of rotary aero-engines in World War I, the most famous being the Bentley BR1 as used in later...
.
Daimler AG holds major stakes in other automakers including Mitsubishi Fuso
Mitsubishi Fuso Truck and Bus Corporation
The Mitsubishi Fuso Truck and Bus Corporation is a German-owned, Japan-based manufacturer of trucks and buses. It is headquartered in Kawasaki-shi, Kanagawa, Japan. This company is one of the World's largest truck manufacturers...
.
BMW also produces MINI
MINI (BMW)
Mini is a British automotive marque owned by BMW which specialises in small cars.Mini originated as a specific vehicle, a small car originally known as the Morris Mini-Minor and the Austin Seven, launched by the British Motor Corporation in 1959, and developed into a brand encompassing a range of...
branded vehicles, and has been the parent company of Rolls-Royce Motor Cars
Rolls-Royce Motor Cars
Rolls-Royce Motor Cars is a British manufacturer of luxury automobiles based at the Goodwood plant in West Sussex, England. It is the current producer of Rolls-Royce branded automobiles, whose historical production dates back to 1904. The factory is located across from the historic Goodwood Circuit...
since 1998.
BMW, Mercedes-Benz and Audi make up about 86% of the luxury midsize market.
See also
- Automotive industryAutomotive industryThe automotive industry designs, develops, manufactures, markets, and sells motor vehicles, and is one of the world's most important economic sectors by revenue....
- Automotive marketAutomotive marketThe automotive market is formed by the demand and the industry. This article is about the general, major trends in the automotive market, mainly from the demand side.The European automotive market has always boasted smaller cars than the United States...
- Effects of the 2008-2009 automotive industry crisis on the United StatesEffects of the 2008-2009 automotive industry crisis on the United StatesBeginning in the latter half of 2008, a global-scale recession adversely affected the economy of the United States. A combination of several years of declining automobile sales and scarce availability of credit led to a more widespread crisis in the United States auto industry in 2008 and...
- / Doumental Detroit Industry Automotive