As the 1980s dawned, the world was still reeling from the 1979 Oil Crisis. Pretty soon, Iran and Iraq were fighting a war that lasted almost the decade (1980-88).
The slack in oil supply from Iran and Iraq was taken up by other OPEC members, notably Saudi Arabia. The petro-dollars enabled the GCC members to finance Iraq in this Arab-non Arab war.
As oil fears receded, automotive performance came back in vogue. The advent of computerised engine management systems and fuel injection helped improved both power and fuel efficiency, once considered mutually exclusive. European makers started to offer larger engines in more models and found eager buyers.
Chrysler Corporation came to the verge of extinction in the 1970s till a charismatic Lee Iacocca – the architect of 1964 Ford Mustang – came on-board and managed to secure loan guarantees from US Congress. Iacocca managed to turn the beleaguered maker around in a short span of time. Iacocca launched a minivan which was widely adopted by “soccer moms”, helping recovery from doldrums.
To protect the domestic motor industry, a quota was imposed on Japanese imports into USA. Called a “VRA (Voluntary Restraint Agreement)”, it limited the car exports from Japan to US at 1.68 million units per annum starting from 1981.
Honda, long the most progressive and engineering-led Japanese brand, decided to circumvent the VRA by producing cars in America at a plant in operation since 1979 producing Honda motorcycles. Soon, other Japanese manufacturers also set up their factories in USA as locally produced models were exempt from VRA.
Honda was also the pioneer in launching an upmarket brand “Acura” in American market in 1986. The flagship Acura Legend was co-developed with Austin Rover Group from England, while Acura Integra was based on Honda Civic but sufficiently differentiated. The models from Acura were sold at a premium, generating better margins for parent company.
This move was copied by compatriot rivals Toyota and Nissan, who launched their respective “Lexus” and “Infiniti” models in 1989. The flagship Lexus LS400 was their interpretation of a Mercedes Benz and Lexus ES250 was a luxurified Toyota Camry, while the Infiniti Q45 imitated sporting intent of a BMW and Infiniti M30 was a Nissan Leopard in drag.
In 1989, the smaller and more sporting Japanese brand Mazda unveiled a simple two seater sports car called the MX-5 Miata. It was the typically British two-seater from 1950s and ’60s updated for late ’80s and – crucially – with Japanese reliability. It took the market by a storm.
Japanese cars found greater acceptance in Europe in 1970s as their competitive pricing, reliability and higher equipment levels won converts.
In 1980, Honda got into a joint-venture with British Leyland (later named Austin Rover Group) to produced Honda designed cars in BL factories. The first product of this venture was based on Honda Ballade and called Triumph Acclaim.
Honda started work on their Swindon plant in 1985 and engine production started in 1989.
In 1984, Nissan started erecting their manufacturing plant in Sunderland, UK. The first car rolled off the line in 1986.
Toyota joined the bandwagon in 1989 when work started on Burnaston plant. The first car was produced there in 1992.
With factories located in USA and UK, the three leading Japanese brands were protected from backlash against imports, fluctuations in exchange rate and delays in delivering cars to customers in the respective markets.
1980s is the period that fledgling Korean automobile industry started exports to the largest and most lucrative market – US – at the time. Hyundai entered the fray with its Excel (Pony elsewhere), and sold 126,000 cars there in first year of business, based on low price.
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