The 1980s trade war that spawned Lexus - and how it changed the automotive landscape

The 1980s trade war that spawned Lexus - and how it changed the automotive landscape

What a time to be alive!

The world was treated to Steven Spielberg’s E.T. the Extra-Terrestrial movie, Michael Jackson released one of his most critically-acclaimed albums, Thriller, the wreck of the Titanic was discovered, Chernobyl’s nuclear disaster threatened the world, and it all wrapped up nicely with the destruction of the Berlin Wall and the advent of the World Wide Web.

At the same time, however, there were events and decisions unfolding behind the scenes in North America that would reshape the automotive market across the world. Dramatic, we know, but what few people reflect on today is the importance and the impact that the 1981 Automobile Voluntary Export Restraint (VER) program would have on the way vehicles were designed then and well into even our future. Check out our selection of used Lexus vehicles today at Basant Motors!

What? You haven’t heard of it?

Well, we can’t be entirely surprised. It isn’t exactly the type of news that you would come upon without doing some digging or if you had been paying close attention when the VER program was first initiated.

In this manner allow us to provide you with a little insight into what is arguably one of the most important moments in the automotive industry towards the end of the 20th century.

It’s hard not to see the logic behind the action, with the United States market saturated with cheaper and more efficient Japanese cars, there was real reason to be concerned. Local automakers simply could not keep up with the quality from overseas. One might argue that there were a lot of actions considered before the VER came into full swing in early 1981.

Acknowledging the influence Japanese automakers were having across the country, the United States created a limitation on the amount of imported vehicles coming from the chain of islands across the Pacific Ocean. Specifically, 1.68 million cars, with the intention of an expiration date on after three years in action.

What Really Happened?

When it came time for the market to return to normalcy, in April 1984, the U.S. Government, feeling deficit in trade with Japan as well as the outcry from domestic markets extended the quotas for an additional year, with an increase to 1.85 million vehicle import allowance.

Again, it came time to forfeit the program and again, in 1985, it was extended with an increase in allowance to 2.3 million. This process of pushing the date would continue until 1994.

How Did the Japanese Automakers Respond?

Surprisingly well!

Rather than allow one of their largest consumer bases to be compromised because of import limitations, the Japanese automotive industry established themselves in the United States proper. Often called ‘transplants’, these new manufacturing sites found ground largely in the Southern U.S. where right-to-work laws were still in place.

As an additional response to this critical move some of the Japanese-owned automakers joined together in joint ventures with existing U.S. plants, creating hybrids the likes of Chrysler and Mitsubishi in the form of Diamond Star Motors. Ford and Mazda joined forces and established AutoAlliance International. GM, perhaps anticipating the future, created NUMMI, which would then pair up with Toyota, and expanded to include the Canadian subsidiary CAMI.

GM also paired up with Suzuki and developed the Geo division in the United States, with Canadian counterparts that were much shorter-lived.

Alongside these pairings, the Japanese Big Three, namely Toyota, Nissan, and Honda, began to turn their eyes towards a more expensive niche in order to validate the exportation curfew.

This created companies that are well-known to us today in the form of Infiniti, Lexus, and Acura.

Imagine that? Limitation that instigated a revolution in quality vehicles still present and regarded with respect and consumer satisfaction the world-over. It’s always amazing to see such progress spawned from an attempt to distract or destroy.

Join us today at Basant Motors and check out our huge selection of impressive vehicles from these makers and many, many more!