Squeezed on all sides
Leadership in this high-volume, low-margin category has swung from U.S. to Asian models. The highest-selling small car in 1997 was the Chevrolet Cavalier; by 2001, it was the Honda Civic. But the fastest-rising rivals are the ultra-low-cost Koreans, with models such as the $12,500 Elantra.
Nowhere has the slippage in U.S. prestige been more noticeable than in luxury cars. Cadillac was the top-selling brand in '97, followed by Lincoln, but the Europeans were already setting the pace in design and engineering. Now, Lexus, BMW, Mercedes, and Acura rule the roost, with the BMW 3 Series leading the way.
If there's one area in which America still rules, it's in trucks and SUVs. But even here, the Japanese are making headway. Over the past two years, they've launched such well-received vehicles as the Toyota Tundra pickup and gained more than five points of market share.