And foreign ones, collectively, move up to No. 2 in the market
One bright spot in the U.S. economy in 1979 was the surprising decline in gasoline use, which was off 4.9% from the previous year. Rising fuel costs are finally prodding Americans to cut back on consumption, and the need for this becomes more acute all the time; indeed, last week Venezuela, Libya, Indonesia and Iraq announced price hikes of 10% to 15%, which could add 5¢ to 7¢ per gal. to the wholesale price of imported oil and a few cents more to gas at the pump. Americans are also reacting to higher prices by switching to smaller autos at a faster pace than anyone had expected.
Demand is so strong for Detroit's more fuel-efficient offerings that at one point buyers of General Motors' new X cars had to wait four to six months for delivery, and Chrysler Corp.'s popular Dodge Omnis and Plymouth Horizons were being sold before they reached the showrooms. The order backlog for Volkswagen's Pennsylvania-built diesel Rabbit remains long. But nowhere is the rush to gas sippers more evident than among the imports. While the overall sales of the U.S. auto firms have plunged, foreign makes are booming—so much so that as a group they have moved ahead of Ford and taken over the No. 2 spot in the U.S. car market for the first time ever.
Americans bought more than 2.3 million foreign cars last year, pushing the imports' share of U.S. auto sales to an unprecedented 22%. That is up from the 16.2% share they gained in 1978 and far ahead of the 12.9% they had in 1972.
While the American carmakers still sell more small autos in the U.S. than foreign manufacturers do, they command only 63% of this market, which now accounts for more than half of all cars sold and is growing fast. The top-selling small models are still U.S. products: the Ford Fairmont and the Chevrolet Citation among the compacts, and the Chevette and Chrysler's Omnis and Horizons among the subcompacts. But the third and fourth bestsellers in the subcompact category are the Toyota Corolla and the Datsun 210.
After 1977, when foreign cars grabbed a then record 16.7% of the market, their sales began to slip, partly because the yen rose enough against the dollar to drive the prices of Japanese imports up by 25%. But suddenly last spring, gasoline shortages reappeared, and demand for small cars took off. Because Detroit does not as yet produce enough economy models, thousands of would-be American car buyers have been forced to turn to imports.
The big winners have been the Japanese. While U.S. sales fell by about 11% for the domestic automakers last year, they rose by an estimated 10% for Toyota, 28% for Honda and 36% for Datsun. Japanese models now account for nearly 70% of all imports sold in the U.S.