How #Made in Japan Changed the US Auto Industry
Americans have always been obsessed with cars. For decades, the big three—General Motors, Ford, and Chrysler—had a monopoly on this desire. They made cars using a system that Ford had developed: the assembly line. It’s about quantity. Mass production. The factory operates 24 hours a day. The goal is simple. Make as many cars as possible, even if they are all the same color.
This is not necessarily a good thing. It was just more.
This approach worked well until foreign competition arrived. Japan entered the car market shortly after World War II. Early Japanese cars were rough. Primitive knockoffs of American designs. They didn’t sell well at home or abroad. However, exports began to increase in the 1950s.
The American public is skeptical. They see Japanese imports as cheap household goods. Fragile garbage. Mass-produced trash.
The founders of Toyota and Honda didn’t care. They wanted to build a car that was better than American cars. Original. efficiency. Curiosity. An ear for what consumers actually needed.
In the late 1970s, American drivers noticed the engineering. Reliability. The Big Three urged shoppers in the 1980s to “buy American.” It didn’t help much.
Why Japanese Cars Felt Different
The Japanese domestic market forced a different manufacturing philosophy. Fewer customers. Narrower roads. No demand for oversized muscle cars.
The American car manufacturer produces several limited edition models. Japanese companies do the opposite. They focus on the efficiency of several models in small batches.
The results speak for themselves. Toyota’s profit margin in 2003 was eight times higher than the industry average. In 2008, US-made vehicles accounted for less than half of US sales. Toyota has overtaken General Motors and become the world’s largest car manufacturer. 2009 was a disastrous year worldwide, but Subaru and Hyundai were the only companies with sales growth. Both are Asian brands.
Japanese manufacturers see the long term. American factories have relied on systems that have remained the same for 30 years, while Japan has invested heavily in infrastructure and technology. Government agencies set targets to raise the bar and drive innovation among competing firms.
Kanban and just-in-time
The 1974 oil crisis caused a global economic recession. Toyota emerged stronger. Why? Because of kanban. Or “just in time”.
The system plans the material orders so that the components arrive at the factory exactly when they are needed. Not a minute earlier. Not a second later. Only exact amounts are required. The goal is to eliminate waste. Overstock is a thing of the past.
Think of it like filling up a gas tank. You have the ability to fill every day. You don’t. Wait until the light comes on. Then refill. American automakers were metaphorically pumping gas into full tanks. Toyota waited for the empty light.
Quality and efficiency alone are not enough. Toyota added kaizen. Self-improvement. Continuous learning. Employees, vendors, and management are taught to challenge assumptions. To put eyes and hands on problems. To learn from the situation itself.
American Factories, Japanese Strategy
In the 1980s, Japanese automakers began building large factories in the United States. At the same time, American brands are moving abroad. Thanks to this change, Japanese companies have been able to manufacture and deliver cars to American consumers faster than before.
They were so skilled that they made cars in the US and exported them to Japan.
The innovations don’t stop there. The Toyota Prius is a two-year effort to design a globally green car of the future. The world’s first hybrid fuel-electric vehicle. Entered the Japanese market in 1997.
Have American automakers adopted Japanese techniques? The answer is complicated. Some did. Some didn’t. The gap has narrowed, but not completely.
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A conceptual gap in American production
Chrysler doesn’t just make minivans. They changed the way families moved. The Dodge Caravan was introduced and the era of station wagons quickly ended. Ford chose another path. They started building SUVs from truck bodies. These efforts were successful. The accumulation of profits continued. But they create blind spots.
US leaders see no reason to follow Japan’s approach. The market is satisfied. Gas is cheap. The Toyota Production System seems trivial for a company that builds giant trucks for suburban driveways. Then fuel prices went up. The gas-guzzling SUV market suddenly collapsed.
Toyota has moved on. While they are building hybrid and electric cars, Detroit is still polishing the chrome bumpers. This is not just a product change. This is a technical moat. Toyota started mass production of hybrid vehicles early and has always been at the forefront. Other Japanese brands such as Nissan and Mazda were unable to achieve such special gains in the 1990s. They tend to use the same rigorous processes. But Toyota is still the gold standard.
Just-in-time production, the bigger the better
The Big 3 (General Motors, Ford and Chrysler) only started gaining traction in the 1990s. They saw Toyota’s superiority and began copying the Toyota Production System. They bought the software. They set up a just-in-time inventory system. They streamlined supply chain.
But they miss the point.
“This is part of the system. This is not a top-down directive, but a company-wide philosophy of continuous improvement of processes, practices and individual performance.”
Efficiency is not Toyota’s only strength. This is culture. The Kaizen (continuous improvement) philosophy runs through all levels of the company. It’s not about building more to meet quarterly goals. It’s about eliminating waste from every activity.
US industry is struggling with this shift in thinking. Their culture is still rooted in the idea that “bigger is better”. Even more volume. Increase market share. More variety. Toyota changed its goals. They are no longer looking for pure quantity. They began to focus on making cars that consumers actually wanted to buy. Affordable price. Reliable. Effective.
result? A gulf remains. American companies have adopted these tools. They didn’t adopt the soul.
