Prior to the oil price shocks and the recession of the early 70's, the trend for consumers was for bigger cars. The 60's were a time of increasing affluence. The price of gas was below 50 cents a gallon. Mileage wasn't a big concern for many.
An additional factor was the sudden rise of air pollution in major cities. I lived in the NYC area and can attest to the miserable air quality.
So, Detroit was tooled up with big cars and big V8's when the recession hit. At a time when sales were down and money got tight, the auto industry was dealing with the need to lower air pollution standards and improve fuel economy. Vegas, Pintos, Gremlins and other vehicles were rapidly designed and brought to market. In the case of the larger cars, the automakers simply de-tuned the engines to get them to comply with emissions standards. In many cases, all you needed to do was change the timing chain to restore most of the performance. Those engines were also fine-tuned using many new controls, mostly actuated by manifold vacuum. Again, all this had to be done at a time when revenues at automakers were down. The results were slipshod.
The foreign automakers, especially the Japanese, were already completely tooled for high mileage vehicles. Doing the work to lower emissions was easier for the smaller engines. They gained market share with better cars, and the American automakers continued to lose market share.
By the mid-80's the American automakers started to get their mojo back. Car quality (including performance) returned. I drive a 1986 Ford Mustang with a high performance V8 that gets more than 25 mpg on the highway and has low emissions. I think Detroit had known how to do this for a long time, but there was no profit in it. It's also well known that the oil companies had allied themselves with the car companies to resist fuel economy standards.
In my opinion, corporations have way too much influence in our political system.
