AUTOS: Shift into High

Since 1920, the British auto industry has been working under the protective wraps of an auto tax of £1 a horsepower. Thus, low-powered British cars were taxed as little as £10 ($40) a year, while higher-powered U.S. cars were taxed $130 or more. So Britons bought small British cars. That pleased the protectionist manufacturers.

But the wraps became a strait jacket. The small British cars could not compete in the foreign market. If manufacturers wanted to sell abroad, they had to make bigger export models, an expensive process. So production remained small, prices high, and there was little standardization.

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