Paolo Gerbaudo in Phenomenal World:
In the late 1970s, Western markets were flooded with Japanese cars from then-unfamiliar brands like Toyota, Mazda, Datsun, and Honda. The combination of a high quality product, efficient fuel consumption, and a low price tag made these brands very popular in the US and Europe in the aftermath of the 1970s oil shock, resulting in a decline in market share for domestic manufacturers and complaints of unfair competition from entrepreneurs and trade unions.
The “Japan Shock” soon engendered a protectionist policy response. The US and the UK negotiated voluntary import quotas with Japan to limit competitive pressure on their car industries, and European countries adopted similar measures. But this was only the first step in a deeper transformation of Western industry. Desperately seeking avenues to regain international competitiveness and quell heightening domestic labor unrest, companies in the global automotive sector and beyond began to emulate their Japanese rivals. The “Toyota method,” expounded by the company’s leading industrial engineer Taiichi Ohno, became a must-read for any serious industrial manager, while North Atlantic business schools started teaching Kaizen and Kanban methods of “just-in-time” production. This cultural shift, sometimes described as part of a broader process of “Japanization,” served to catalyze the embrace of what sociologists came to call post-Fordist management strategies, which focused on flexibility and cost-cutting while rejecting the vertically integrated production models of 1950s US and European auto leaders.
Nearly fifty years after the “Japan shock,” today’s global automotive industry confronts a far more systemic upheaval—what we could term the “Chinese electric vehicle (EV) shock.” Until recently, China’s automotive industry was dismissed as a low-quality copy of Western or Japanese models. However, it has since achieved impressive quality and price competitiveness in the strategic section of electric vehicles—in 2023, the Chinese giant BYD overtook Tesla as the largest producer of electric cars with 3 million New Energy Vehicles (NEVs). That year, China’s export of NEVs grew by 64 percent. Together with good Internal Combustion Engine (ICE) sales and Russian demand induced by Western sanctions, China has already overcome Japan as the world’s largest auto exporter overall.
More here.