Challenge of the Imports.

By 1960 the American automobile industry had been consolidated into the Big Three (General Motors [GM], Ford, and Chrysler) and American Motors. These firms not only dominated the domestic market, they were supreme globally. In 1960 American companies built 93 percent of the autos sold in the United States and 48 percent of world sales. In the mid 1950s, however, led by Volkswagen and soon followed by Fiat, Renault, Datsun, and Hillman, imports began to nibble their way into the rich American market. The growing presence of imports disturbed Detroit, and the Big Three responded with their own small cars—GM produced the Corvair, Ford the Falcon, and Chrysler the Valiant. They then introduced the so-called muscle cars, powerful, sleek sports models such as the Mustang. The tactic worked: Americans, dazzled by the horsepower and the style, turned away from the boxy, utilitarian imports. By 1965 American...