Essay: Korean War impact
At the time of industrial and economic deregulation in 1950, the Korean War broke out. This highly affected the U.S, as they had to neglect all the other sectors of the economy and major funding the war. This on the other hand, had a positive impact on Japan since they had to satisfy the demands initially satisfied by the United States. This was in fact a special demand economy for the Japanese.
There were new orders received by the automobile industries in Japan to supply aircraft, fuel tanks, military vehicle repairs, spare parts, engines and for automobiles as well. In efforts to meet the new and high demands, the manufacturers of both the parts needed as well as those of the automobiles had to expand enormously leading to fast growth in all the industries involved (JAMA 2008).
The boom provided by the Korean War known as special procurement boom helped in modernizing and revitalizing the economy of the Japanese. This led to a tremendous expansion and eventually led to a rapid consumer economy. By the year1953, per capita consumption had exceeded the level during the pre-war era. This firm economic growth did not only lead to international demand but also to local demand for automobiles. Without mentioning the special procurements, so many standard size cars around 25,435 units were produced in the year 1952 amounting to a 9.5% increase from 1951. 47,917 units of smaller sized cars, which was an increase of 34%, were produced. For the two-wheelers, increase was by 230% (JAMA, 2008).
The sales environment was favorable and this led to a very big automobile exhibition in the year 1954. There were over 550,000 visitors attracted to this show and this implied great success in the industry (JAMA, 2008).