We're dancing near the edge of hijacking 76's thread here, but I think your question still applies.

I'm going to guess you're under 30 years old, so a lot of what led to the market alignment as it is today happened before you were born. Up to the early '70's GM alone had something around a 50% market share. The Japanese cars combined were down near single digit share. Honda wasn't even in the market except for motorcycles. Then came the first oil embargo and the marketplace panicked. Demand for higher fuel economy vehicles exploded virtually over night. Though the "Detroit" auto makers took a flier at "economy" cars in the early '60's, the demand for higher fuel economy cars just wasn't that significant and the American cars gradually grew in size and power to keep pace with American tastes. Even though various European auto makers tried to break into this market during the late '50', early '60's, only VW enjoyed much success in a relatively small market segment. So the American manufacturers were "out of position" when the radical shift occurred. Not only were they out of the market on product size and fuel economy, but they had some serious management problems. At that time in history it was in vogue to have accountant minded managers progress to the top jobs. In my opinion, the most agregious of these CEO's was Lynn Townsend at Chrysler. The problem with the accountant mentality is that they don't understand marketing and sales. What they do understand is jockeying numbers. From their point of view, it made perfect sense to keep cutting costs in all areas of the vehicle design, production, marketing, and sales processes. The result was a process that was sometimes referred to as "de-contenting". As a result, they kept offering vehicles that had less and less. Cheap plastic parts, and lower quality became more and more the "norm". When there was less competition they were able to get away with it, but as always happens, the consumer reacts and seeks what's in their best interest as soon as it is available. The Japanese manufacturers were at the other end of the spectrum. They wanted to grow. Because of conditions in their own country, they were already making the smaller, more fuel efficient cars that the market place would soon demand. And they were smart marketers. Japanese products had an advantage (at that time) with lower production costs. And the auto makers were sensitive to the very real reputation for poor quality that immediate post WWII Japanese products had. As such, the management of those companies put a very high emphasis on build quality, and content, hoping that the market would recognize their efforts and shift it's position. And as market places usually do, the shift occurred, albeit gradually. They were prepared when the opportunity occurred (see my signature line) that propelled their products to a higher demand position. The arrogance of the American manufacturers, and the narrow minded business plans of their management, crippled them. Any that doubt the negative impact of the accountants approach only need look at how Chrysler's fortunes were corrected. Like him or not, Lee Iaccocca was an engineering/marketing minded manager. He understood that accountants had a place in the process, but that the "de-contenting" model wasn't going to work for long. Controlling costs was critical, that's why he built a business plan around utilizing the K platform for most of their production, but that the customer demands needed to be met as well. No accountant minded manager would have ever "invented" the mini-van. It took a marketing minded guy to recognize the underlying market demand.

So in the mid '70's the Japanese companies gained momentum. The American companies were slow to react. For a variety of reasons, some external (government meddleing in safety, economy, and polution demands), and many internal (resistance to change along with the poblems noted above) the "Detroit" auto makers fell behind. It took them years to reverse their bad habits, and of course, the competition wasn't standing still. So they played catch up for a long time. Some believe they're still playing catch up. Now we have Toyota getting into NASCAR, first trucks in 2004, and cars in 2005. This week Pontiac announces it's dropping out of NASCAR.

Of course the story is more complex than noted here, but this is a brief overvue. Regardless, all one need do is look around to recognize the market mix.