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The American car companies gave up on small economy cars because they could not make enough money on them to pay their costs.
GM's cost per vehicle is supposed to be 6k less after the bankruptcy and reorganization.
Hard to make 6k on a 10 k car, so their solution was to build over optioned behemoths an make enough profit to keep shareholders happy, but like the heroin addict, that is a short sighted business philosophy.
The Japanese competition had no such incentives and their home market demanded small efficient cars. Corporate and labor cooperation insured success, without the adversarial relationship of US companies.
20 years ago there was no comparison of quality between American and Japanese cars. Don't take my word for it just read an old Consumer Reports frequency of repair records.
Also look at resale values, which are a fairly good indication of perceived value.
Now, that all being said, my Pop bought an 83 thunderbird that had so few problems it would compare favorably to any car made anywhere on the planet. There are always exceptions to the general feeling of superior Japanese quality, but for those of us who have been around for 50 plus years, Japanese quality used to be a joke.
Now China suffers from quality issues which are their biggest problem today with the highly technical components they must improve to become competitive in the world auto market. When they get it right, watch out for them. Korea had the same issues and got it right and they can now compete with just about anyone.
Japanese auto quality has dropped recently, while American has advanced light years ahead of where we were in the 70s and early 80s. A friend of mine who manages a GM dealership service department told me their warranty claims have dropped something like 90% in the last 15 years. Compared to the Vega era the difference is incalculable.
Today we see the result of generations of adversarial relationships between management and labor, as well as an attitude towards the customer that could never survive decent competition. I have seen sabotage on American assembly lines when a strike became inevitable. When you trash the customers product, because you are PO'ed at management fro trying to control costs, you deserve to be unemployed, and the management deserves the same.
regards
Mech
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