This chapter was first published in 1982. Though more than twenty years have passed since its publication, there is still significant meaning in the author's analysis and the indications made by W. J. Abernathy and others about the reversion of competitiveness in the Japan–US automobile industry and the factors caused by the reverse in the view of Japan–US comparisons in productivities. The history of international competitiveness in the Japan–US automobile industry since then, and the contemporary lessons from the theory put forward by Abernathy, are briefly described in the addendum.

Introduction

The US automobile industry deteriorated markedly in the early 1980s due to the effects of the first oil shock of 1973, fuel regulations introduced under the 1975 energy conservation law, and the second oil shock in 1979. During 1980 and 1981, the Japanese automobile industry reached production levels of 100 million units per year and became a strong international competitor, resulting in increased protectionism in the US and Europe.

While struggling to protect themselves against Japanese competition, US and European auto manufacturers began to search for the reasons behind Japan's success. Even though the deterioration in the competitive power of the US automobile industry could be directly attributed to the energy crisis, government policies, and changes in the US market environment, it was widely agreed in business and industrial circles and amongst scholars that the resulting fall in productivity was clearly due to structural causes.