Ten years ago, the threat of unrestricted Japanese imports after 1999 and the construction of Japanese plants in Europe was enough to terrify the European car industry.
Few doubted Nissan, Honda and Toyota's ability to carve themselves substantial slices of the European market on their way to world domination.
How times have changed. The lifting of European Union automotive import quotas on January 1 barely warranted comment from Europe's car bosses. So impressive was Europe's response to the Japanese threat 10 years ago - and so disappointing Japan's ability to create desirable 1990s vehicles for Europe - that the Japanese bravado of that time is long forgotten.
But Japanese automakers are gearing up for another push in Europe - and this time there are much better reasons for believing their boasts.
Akira Imai, president of Toyota Motor Europe, said Toyota wants to push sales from 600,000 in Europe to 800,000 by 2005. Production of the award-winning Yaris gets under way in France in 2001.
Nissan predicts record sales this year with the UK-built Almera and Spain-built Tino minivan.
Honda also expects 2000 to be a record year for its car operations in Europe.
The Japanese now admit their mainstream cars have been dull in the past, but stress they are taking steps to change all that. According to the Economic Intelligence Unit (EIU) in London, sales of Japanese passenger cars will break the 2 million-unit barrier in 2004 from an estimated volume of 1.77 million units in 1999.
The top three Japanese makers -Honda, Nissan and Toyota - are all revamping their distribution and dealer networks. They are preparing lean organizations to handle a flood of new products, and to ensure they cope with the potential abolition of Europe's car retailing laws, called block exemption, in 2002.
Some analysts believe the Japanese makes will target southern European and Mediterranean markets for fast growth.
'The build-up will be discreet and the Japanese will target markets like France and Italy where have all been strengthening their dealer networks,' said Ian Robertson of the EIU in London. 'The Japanese know they can't raise market share quickly and dramatically without the danger of a trade war and hostilities.'
Southern Europe is the major market for the two European makes slowest to globalize production and sales - France's Renault and PSA/Peugeot-Citroen.
Both will feel the sting of Japanese expansion, analysts say, although the tie-up with Nissan should help Renault's cause.
Italy's Fiat Auto appears less vulnerable. It launched a successful world car program several years ago that's opened up new markets in South America, Asia and Africa. But with a 40 percent share of the Italian market, Fiat is most vulnerable at home.
Toyota's share in Italy rose from 1.4 percent to 2.2 percent through the first 11 months of 1999. Sales grew 62 percent in Spain in the same period.
Toyota's selection of France for its second major European car assembly plant shows its keen interest in the French market. Meanwhile, Nissan is adding production of one, possibly two, small minivans at its Spanish factory.
With new cars like the Toyota Yaris winning the 1999 European Car of the Year award and making an impact in Europe, some industry commentators are warning that at last the Japanese may now be in a position to keep the promises made back in 1990.
'We've seen some spectacular sales gains at Toyota - obviously from a low base - but they are indicative of what they can do. The best Toyota story at the moment is the Yaris - a product that has been designed with Europe in mind,' said analyst Stephen Reitman. 'The Yaris is a hit. A lot of volume European brand managers are looking at the car very closely, and with a degree of trepidation.'
Robert Hendry, chairman of Adam Opel AG, GM's German subsidiary, said: 'Here in Germany there haven't been restrictions like in France and Spain. We've been competing with the Japanese more. But the Japanese didn't focus on Europe. They focused on the USA and US tastes. Now we are seeing a shift of resources to Europe.'
Toyota isn't settling for just the lower end of the market. It has relaunched the Lexus brand in Europe with the IS200, a competitor for cars such as the BMW 3 series and Audi A4.
Later this year Toyota will begin importing the Lexus RX300 sport-utility, a resounding success in the USA because of its car-like ride and handling.
In fact, not all the import restrictions will go away. Europe will continue to hit Japanese imports with a 10 percent duty, a higher levy than the 8 percent duty in Korea or the 2.5 percent duty in the USA.
'The 10 percent tariff remains - we believe it is an anomaly and very unfair,' said a Toyota Motor Europe executive. 'It doesn't make sense. The European automobile industry has restructured and become strong. Why do they need this 10 percent?'
Nissan suffered from a profit and sales slump from 1992 until early 1997.
As a result, it withdrew from niche markets and cut development funds.
Nissan couldn't generate sufficient sales to sell small-volume vehicles profitably, said Hartmut Kieven, vice president of sales and marketing. 'Now that we have returned to a more stable situation, we can gradually return into niches,' he said.
Nissan's European products will also benefit from the styling and marketing know-how of new partner Renault.
Honda won't be left behind. Minoru Harada, president of Honda Motor Europe, said: 'We'll introduce a new small car in 2000 that's very different from the Logo supermini. We hope to sell 100,000 units of the new car,' he said.
GM recently purchased a 20 percent stake in Fuji Heavy Industries, manufacturer of Subaru cars. Now Subaru can also look forward to a brighter future in Europe. Subaru could build its cars at GM plants in Europe and share common parts.