Import-brand automakers came to North America in the 1980s and 1990s with a production strategy already in mind. Today, many are operating under a different set of assumptions.
Here's a look at the changes.
Then: BMW's move to assemble its 3-series cars in South Carolina was unheard of when the plant opened in 1994. Its targeted factory volume of 80,000 cars a year was below industry norms.
Now: The 3 series no longer is made in South Carolina, having served as a warm-up exercise for the plant. The Spartanburg operation added the Z3 and then replaced it with the Z4, as well as a series of niche-market models and the X5 SUV. Plant capacity is reaching to 160,000 vehicles a year, and BMW is poised for further expansion. But the plant's reliance on European content is crimping the picture since the euro has appreciated about 25 percent against the dollar in the past year. BMW is investigating more North American content.
Then: Manufacturing in North America was a bold strategic move for Honda Motor Co. Honda, a relatively small Japanese automaker, had been discouraged from building in America by the Japanese government. When it opened its first plant in Marysville, Ohio, in 1982, it had total U.S. sales of 375,388 cars. The company had no light trucks.
Now: Honda Motor Co. sold 1.35 million vehicles in the United States last year. Of those, more than 1 million were built in North America. North American plants turn out SUVs, a minivan and luxury vehicles for Acura. But Honda's past strength, large volume production of Civics and Accords, is under pressure. Honda recently scaled back Civic output and is operating one plant below capacity.
Then: Hyundai decided to manufacture in North America in 1986. Its hope in opening its plant in Bromont, Quebec, in 1989 was that Chrysler additionally would source a version of the Hyundai Sonata from it. That didn't happen and the plant closed in 1993.
Now: Hyundai has mobilized for a second effort with a plant under construction in Montgomery, Ala., that will open next spring. The Korean manufacturer has a strong tailwind. U.S. sales topped 400,000 last year. The company also has a new manufacturing approach that includes heavy automation and outsourced module assembly. It will need such support. The plant expects to open with an inexperienced work force and an annual production capacity of 235,000 units, twice the typical opening plant volume.
Then: Ford Motor Co. encouraged its Japanese affiliate, Mazda, to open a plant in Flat Rock, Mich., in 1987 to supply Mazda and Ford U.S. retailers. The year before the plant opened, Mazda's sales totaled 379,843. The year after the plant opened, with a capacity of 240,000 cars annually, sales totaled 349,337.
Now: Mazda sales never topped 400,000 annually, and since 1995, they have remained below 300,000. Ford took a 50 percent ownership in the Flat Rock plant in 1992, renaming it AutoAlliance International Inc. The plant has run under capacity most of its life. Ford plans to produce the Mustang at Flat Rock.
Then: Mercedes-Benz wanted more than factory capacity when it opened its Vance, Ala., plant in 1997. It wanted a learning field where it could experiment with Japanese-style lean manufacturing. A more efficient manufacturing system would be key to introducing a new model in a new segment, the M class SUV, at a price low enough to infiltrate the Big 3's grip on the United States.
Now: The effort worked. The M class at one point was Mercedes-Benz USA's biggest selling nameplate and required a second assembly plant to supply world demand. The Alabama plant is doubling its capacity to 160,000 units to add a second vehicle, the crossover GST. But the expansion is also a risk because it requires a major change to the M class. In introducing the GST, Mercedes is converting the M class to a unibody construction. That will change the rugged nature of the luxury truck that made the plant successful in the first place.
Then: Mitsubishi's arrival in North American manufacturing in 1988 was through Diamond-Star Motors Corp., a 50-50 joint venture with Chrysler Corp., its equity partner. The plant in Normal, Ill., was designed to build 240,000 cars annually, divided equally between the partners. Backed by U.S. production, Mitsubishi outlined plans to increase the size of its U.S. dealer network to expand beyond its 1988 sales volume of 113,591 vehicles. Financial troubles at Chrysler in the early 1990s prompted Mitsubishi to buy out Diamond-Star but continue to supply Chrysler.
Now: Mitsubishi had trouble selling out the plant's full capacity for most of the 1990s. But new management teams took over both the U.S. sales subsidiary in California and the manufacturing operations in Normal in 1999. The plant prospered earlier in this decade, added an SUV to its production, boosted capacity and launched an expansion. But last year Mitsubishi sales stalled again and the expansion was halted. More recently, Mitsubishi's financial link to DaimlerChrysler AG has whipsawed the organization. DaimlerChrysler decided not to finance future Mitsubishi products, and in May the Japanese company embarked on a "last chance" business plan to re-establish the brand in North America. And the Chrysler group has told Mitsubishi it will stop buying vehicles from the plant after mid-2005.
Then: Nissan's first foray into U.S. production in 1983 was relatively easy-to-build small pickups, followed by entry-level Sentras. Building the Smyrna, Tenn., plant was viewed as a way to clip transportation time and costs on low-end products to help Nissan battle for market share against its bigger rival, Toyota.
Now: Nissan has moved steadily into producing higher end products in North America, including the Altima, Maxima, Armada and Infiniti QX56. Nissan has two large-volume assembly plants and has shifted its low-end Sentra to a third plant in Mexico. But it is no longer the same company. Nissan is run in conjunction with Renault and is developing common vehicle platforms and handling global purchasing out of Paris. Nissan also changed its U.S. manufacturing approach to put greater responsibility on suppliers and outsourced labor.
Then: Suzuki's primary mission in opening CAMI Automotive Inc. in 1989, its 50-50 joint venture with General Motors in Ingersoll, Ontario, was to supply GM with small fuel-efficient vehicles. The strategy was to have CAMI supply GM with 120,000 vehicles annually and Suzuki with 80,000. That was nearly the level of its total U.S. sales in 1987 when plant construction began.
Now: Although GM has boosted its interest in Suzuki from 3.5 percent to 20 percent, the brand has been a low performer in an age of big trucks and SUVs. U.S. sales fell under 60,000 last year. GM is hoping to boost plant use with production of the new Chevrolet Equinox SUV there.
SUBARU AND ISUZU
Then: In 1989, two of Japan's smaller players, Subaru parent company Fuji Heavy Industries Ltd. and Isuzu Motors Ltd., locked arms to open a joint venture assembly plant in Lafayette, Ind. The plant, Subaru-Isuzu Automotive Inc., would start at 120,000 vehicles annually, split evenly between the two. As demand rose over the 1990s, it would ramp up to 240,000 vehicles.
Now: Subaru-brand sales in the United States totaled 186,819 in 2003, 50,707 vehicles more than in 1989, when the plant opened. Isuzu sales plummeted to 30,328 last year, and Isuzu has sold out of the venture. Through the 1990s, the fortunes of the two partners were not in unison, although the plant expanded twice to accommodate plans from the parent companies. Briefly, at the end of the 1990s, the plant was operating at full capacity and added engine production to supply Subaru. Uncertainty hangs over the plant as Isuzu phases out its product line.
Then: Toyota entered U.S. manufacturing reluctantly, at first participating in a joint venture with General Motors in California that opened two years after Honda's plant. Japan's biggest automaker, Toyota, continued to focus on two high-volume cars, the Corolla and Camry, into the 1990s.
Now: Toyota is ramping up to a North American plant capacity of 1.6 million units annually by 2008. It will use factories in Kentucky; Indiana; Texas; Ontario; Mexico, opening in December; and a medium-duty Hino truck assembly operation in California. Toyota produces nine nameplates. It is one of the industry's most profitable companies and has undergone little change in direction or management since arriving here.