If you or someone you know bought a new car recently, the odds are pretty good that
Question:
If you or someone you know bought a new car recently, the odds are pretty good that it was manufactured by one of two Japanese companies, Toyota or Honda. Together, these companies account for about a quarter of total passenger car sales. But this was not always the case. In 1973, the two companies accounted for a mere 2.6% of U.S. auto sales. Over the course of the 1970s and early 1980s, the Japanese share quadrupled. Why?
Toyota did a lot of things right: during the 1960s it had perfected the technique of so-called just-in-time production or lean manufacturing, a production system that yielded lower costs, higher productivity, and higher quality compared to American production techniques...........
QUESTIONS
1. Why do you think gas prices rose in the recessions of the 1970s but fell after the Great
Recession?
2. What does this say about the causes of the recessions in each case?
3. In the 1970s, Toyota was able to increase its U.S. sales despite interest rates on auto
loans surging as high as 17.5%. In contrast, after 2007, U.S. auto loan rates fell to their
lowest levels in history; car sales also declined. Explain why.
Step by Step Answer:
1 In the 1970s gas prices rose during recessions primarily due to external shocks in the form of oil price increases The oil crisis in 1973 and the Ir...View the full answer
