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America's love affair with the mechanical ''horseless carriage' - the automobile - has spanned decades, mobilized our society, and changed our way of life. By 1980, nearly 84 percent of all U.S. households owned at least one car, and 44 percent of those households (37 percent of all households) owned two or more automobiles (Orski 1980). The U.S. auto manufacturers are primarily located in one locale, Detroit, Michigan, although each firm has assembly plants scattered across the country. For years, the products sold in the U.S. market were primarily American built, but that is changing. Never before has the future source of cars sold in America been as uncertain as it is now. Imports are playing an important role in the market, and the primary source of these cars is Japan.

The U.S. auto industry is an oligopoly whose primary players are "The Big Three' - General Motors Corporation, Ford Motor Company and Chrysler Corporation. General Motors markets its cars under the Cadillac, Buick, Oldsmobile, Pontiac, and Chevrolet insignias. Ford markets its cars under the Lincoln, Mercury, and Ford brands and Chrysler under the Chrysler, Plymouth, and Dodge nameplates.

This paper will look at the success of the Japanese automakers in the U.S. market and explore how the U.S. automakers reacted to the success of the Japanese.

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This issue is also considered v.3 of the initial publication series of Major Themes in Economics.


©1987 by the Board of Student Publications, University of Northern Iowa



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