By James B. Treece, Crain News Service
DETROIT (Oct. 15, 2013) — Oct. 17 is the 40th anniversary of the first Arab oil embargo, which launched the Organization of Petroleum Exporting Countries (OPEC) and fundamentally changed the auto industry.
Some of the changes really kicked in after the so-called second oil crisis of 1979, but it all started 40 years ago. This list is not comprehensive, but it indicates the magnitude of the changes Oct. 17, 1973, brought.
1. The rise of the Japanese and other foreign auto makers
In 1972, all import brands combined held just a 13 percent share of the U.S. market. That shot up to a then-record 15.8 percent in 1975. They never looked back. It wasn't just the Japanese; German brands also got a boost when their small but powerful engines got a second look from shoppers.
2. CAFE standards
Washington insisted that auto makers meet corporate average fuel economy (CAFE) standards but took no actions that would have encouraged people to buy the cars that auto makers had to build to meet those CAFE standards. Some auto makers had to put heavy incentives on small cars to meet the mandate; others just paid the fines.
3. Ruined reputations
Hasty, ill-planned and poorly executed forays into making small cars proved devastating to some brands' reputations. Think Cadillac Cimarron and Lincoln Versailles.
4. Auto maker tie-ups
A desire to add a fuel-efficient car to the showroom led to a flurry of courtships. Examples include Ford and Mazda; GM and Suzuki, Isuzu, Toyota, Fiat and Daewoo; Chrysler and Mitsubishi; Daimler and Smart.