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Japan's Home America Summary

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JAPAN’S AUTOMAKERS FACE ENDAKA After the crisis of oil in 1973, the demand of Japanese’s vehicles in the United States increased significantly, this is mainly due to Japanese vehicles had a competitive advanced in the automobile manufacturing. They were cheaper, better design and more competent than cars produce in America. Part of the advantages was due to labor differences and technical efficiencies (Exhibit A) (Japan 's Automakers Face Endaka, 1996) Including the lower exchange value of the yen, leaving on the side the principal companies of the U.S automobile industry such as Chrysler, Ford and General Motors, who suffered important losses in their market share. Furthermore, during 1981 to 1985 the dollar appreciated approximate 30% appreciation (Exhibit B) (Trading Economics, 2014), The losses of market share and the appreciation of the dollar caused distress among several sectors in the U.S economy, who exerted pressure to politicians so they could take protective measures in favor of their industries. Most of the measures of protection are given through tariffs and quotas on imports. In pro of the automobile industry, the president of the United States, Ronald Regan, request the government of Japan to voluntary exports restrictions (VERs), limiting to 1.68 million the number of cars exported to the U.S, the restriction was kept in place until March 1984 (Toyota Global, 1981). Although at first the restriction help the American industry to maintain their market share,

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