In response to soaring import sales in the early-1970s, US automakers made brave promises of a counterattack. In retrospect, many of those promises sound decidedly hollow.
For example, in the wake of a critical review of the 1969 1/2 Maverick (go here), Motor Trend ran a follow-up story in its August 1969 issue that quoted from a variety of Ford executives. I wonder whether Ford demanded an opportunity to tell its side of the story, so Motor Trend relented.
If that was the case, the magazine’s editors got a little kick in. The introduction stated, “Going into it, Ford told us that the Maverick would blaze new trails in the subcompact market.” However, after being available for 45 days “we weren’t surprised to learn that import sales were hardly affected and indeed were up a whopping eighteen percent over the same period last year” (1969, p. 58).
Most of the article reeked of banal corporate-speak, but Lee Iacocca — then Executive Vice President of North American Automotive Operations — said a few things that are interesting from a historical perspective. For example, he acknowledged the lopsided labor-cost advantage of foreign-built cars but expressed optimism that Detroit could beat back rising import sales.
“I think that we’ll do whatever is required to get much of that annual million-car market back — we don’t take it lightly, it’s no fad, it’s a difficult challenge to us — but if the Maverick isn’t it, there’ll be another one in the ready room” (Motor Trend, 1969).
Iacocca promised to win back foreign-car owners
Although Iacocca implied that the Maverick could be an adequate response the imports, only one year later Ford would introduce the subcompact Pinto.
“We’re not fighting to just arrest a trend here, those close to five million foreign car owners out there now were our owners a few years ago — one-quarter Ford. We’re going to get them back,” Iacocca insisted (Motor Trend, 1969).
How? By offering cars that better competed against the imports on price. Iacocca blamed inflation for the price gap between imports and American cars. However, he did not acknowledge that in the second half of the 1960s Ford shifted its attention away from compacts in favor of pony cars and intermediates. The Falcon was even moved to Ford’s mid-sized platform in 1966.
Iacocca dismissed the idea that imports benefitted from a “mystique.” He pointed to Detroit’s success in beating back import sales in the early-60s once it came out with compacts that approached imports in price. “I think we — Chrysler and GM are yet to be heard from — will do the same thing [again]” (Motor Trend, 1969).
GM was confident about its ability to ‘tailor a dwarf’
General Motors executives also acknowledged the challenges of responding to the imports while offering a similar level of optimism as Ford.
For example, design head William Mitchell reportedly said that designing small cars was more difficult because it was “like tailoring a dwarf.” In addition, he suggested to Motor Trend that you “can’t use the thinking of Europe when you design over here” (Levine, 1969).
Writer Leo Levine pushed back against what he described as Mitchell’s subjective take, noting that “the import that sold better than 500,000 copies here last year, the Volkwagen, is anything but a model of either good or American design. In certain cases, whether designers like it or not other qualities outweigh looks” (1969, p. 40; original italics).
Later, when the Chevrolet Vega was introduced, John Z. DeLorean argued that “the Vega is going to be built at a quality level that has never been attained before in a manufacturing operation in this country, and probably the world” (1970, p. 80).
Those were audacious words, particularly in light of the Vega’s subsequent quality issues. However, DeLorean did acknowledge that GM couldn’t just “advertise your way” into the subcompact field. “You just have to prove to this customer over time that you really are building his kind of car” (1970, p. 80).
American public proceeded to buy even more imports
As it turned out, Detroit’s optimism was misplaced. Sales of imported passenger cars grew from roughly 1.26 million in 1970 to 2.36 million in 1980 despite the introduction of multiple waves of domestic small cars. Meanwhile, import market share went up from 15 percent to 26.4 percent during that same time period (go here for further discussion).
One could argue that US automakers had at least some success in making inroads into smaller-car markets. For example, the graph below shows how Chevrolet’s subcompacts mostly kept pace with Toyota sales during the 1970s.
Even so, Detroit was losing the war even though it won a few battles along the way. One reason why is that some key assumptions of US automotive executives would prove to be incorrect. For example, Iacocca was arguably wrong that price was the overriding reason for the popularity of imports.
By the same token, I think one could reasonably wonder whether GM and Ford’s early subcompacts might have sold better if they had a more “international” design sensibility than Mitchell preferred.
I do think DeLorean was correct that US automakers had to prove they could sell a car that met the expectations of foreign-car owners. It’s too bad that quality lapses undercut the reputations of both GM and Ford’s first subcompacts.
NOTES:
Sales and market share data are from the USITC (McElroy, 1981), which in turn were calculated from Ward’s Automotive yearbooks, Automotive News and the Motor Vehicle Manufacturers Association.
RE:SOURCES
- DeLorean, John Z.; 1970. “Vega 2300: Chevrolet’s fantastic new mini.” Motor Trend. August issue: pp. 30-32, 80.
- Levine, Leo; 1969. “Bill Mitchell brings style to GM with a capital ‘S.'” Motor Trend. March issue: pp. 38-40.
- McElroy, James R.; 1981. “Automotive Trade Statistics 1964-80.” U.S. International Trade Commission. Series B Passenger Automobiles. No. 1023 published in December.
- Motor Trend; 1969. “Maverick Revisited.” August issue: pp. 58-60, 103.
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