In the North American market in the old days, American cars were big, complex, noisy, gas guzzling, and their engines were problematic. You have to send it to repair every once in a while.
Makers like Toyota differentiated their product offerings by emphasizing on smaller cars, that had good quality components for their engines, simplicity and consumed very less fuel. They also offered a very wide variety of cars as well.
And customers were very happy with these smaller Japanese cars. And that is how we see the success of likes of Toyota today.
I cannot say much about the future of Chinese car makers. But what I can say is that they have a lot of catching up to do in order to match against the Japanese and Western giants. Even the Korean car-makers are far from that kind of level.