By tradition, America has been something of a tomorrow’s Britain.

If you wanted to know what gadget or film, fashion or crime trend would monopolise Kings Road chatter this season, you need only to turn to what enthralled Fifth Avenue last year. In business, America would cough and Blighty would catch a cold.

In the car industry, however, it is Britain which has set the trend. And not just in that MG Rover’s breakdown preceded yesterday’s dire results from General Motors by some ten days. The Rover crisis represented the end of a decline in mass-market UK carmaking which had been underway since at least the 1970s, depriving motorists of hallowed marques such as Riley, Austin, Morris, Triumph and Wolseley.

Which is why now, when General Motors is staggering, the UK car industry has not collapsed. Most of Britain's home-grown makes have already expired, or at least been sold abroad, with the current industry refashioned around foreign carmakers. Carmakers such as Toyota and Nissan, whose success is now the Achilles wheel of the US giants.

The first three months of 2005 were Toyota’s best in the US since it entered the market 48 years ago, with quarterly sales reaching 507,000 vehicles.

Nissan, in the year to March, for the first time sold 1 million cars in America in a fiscal year, becoming only the sixth carmaker to do so.

General Motors, meanwhile, in announcing yesterday its $1.3 billion quarterly loss, revealed that it had suffered a declining market share and cut production to reduce dealers’ inventory of unsold cars by 100,000.

While Ford this afternoon unveiled a $1.2 billion first quarter profit, the company was reliant on its financial services arm for more than half its earnings. Profits from making vehicles slumped by 53 per cent.

It is little wonder that, in stock market terms, Toyota is worth more than GM and Ford put together. GM shares, indeed, stand near their lowest for 12 years, when the company flirted with bankruptcy.

Toyota’s lead is in part secured by efficiency. The company is credited with the development of the just-in-time component delivery discipline now copied worldwide across manufacturing sectors.

The company has gained a further advantage by avoiding the temptation to fill its boot with slow-moving brands. Jaguar remains a loss leader for Ford, while GM paid £1.1 billion in February to escape a deal which would have forced it to buy the dismally-performing Fiat.

Toyota has, furthermore, been favoured by social trends, making the kind of fuel efficient cars – it is a pioneer of vehicles which run on dual petrol-electric engines – for which Americans are now flocking as pump prices hit record highs.

"Spurred by escalating oil prices, the demand for fuel efficient vehicles has definitely stepped up," said Jim Press, a former Ford worker who is now executive vice-president of Toyota’s US arm. Ah, the chime with 1970s Britain, where soaring petrol prices saw thirsty sports cars traded in for economical saloons.

Toyota has also been helped by the lack of healthcare burden which is depressing, in particular, GM. The Detroit-based carmaker will pay an estimated $5.6 billion this year providing cover for 1.1 million workers, retired staff and their families, a bill which, if untreated, will eventually threaten the company with bankruptcy once more.

Unfortunately, America is here leading Britain rather than following it, in highlighting the dangers posed by near-bottomless welfare costs. In showing just how dangerous uncapped social bills can be, and how difficult they are to remove from recipients who come to view them as a right.

Without pensions reform now, Britain's finances will, in 2030, possess all the poke of a Reliant Robin. And the country will this time be unable to rely on foreign buyers to bail it out.

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