Industry-wide production levels fell by almost two million vehicles (around 22 percent) during 1974. Most of the decline was traced to larger and medium-sized cars that had poor fuel economy. Production of compact and subcompact cars rose, but not at an equal pace with the decline of larger cars. As the Nixon wage and price controls ended in August 1974, inflation figures boiled upward to above 12 percent. Chrysler, faced with an inventory of cars that would last for 120 days, closed five of its six U.S. assembly plants.
The Camaro was redesigned again in '74. The bumper now featured a body colored fascia above the front bumper and a thick aluminum front and rear bumper. The grille was shovel-shaped and the rear tail-lights wrapped into the fenders. They also added rubber impact strips on the bumpers. The Z-28 was discontinued at the end of the model year. Another interesting note for the 74' Camaro was the seatbelt interlock system required by federal law. The system wouldn't permit the car to start unless all front-seat passengers were buckled in. The law was soon rescinded and 1974 was the only year to feature these seat belts.
A new grille and taillights moved above the new 5 mph (8 km/h) rear bumper highlighted the changes for the 1974 Caprice Classic along with new thick "B" pillars and fixed rear quarter opera windows on two-door coupes, which essentially eliminated pillarless hardtop design much like the GM intermediates did the previous year. Other bodystyles including the four-door pillared and hardtop sedans, convertible and Estate Wagon were carried over with only minor changes from 1973. New to the engine roster was a four-barrel version of the small block 400 cubic-inch Turbo Fire V8 rated at 180 hp (134 kW) (which was the standard engine on wagons and all cars sold in California, optional on other models in 49 states). All other engines were carried over from 1973 although the 454 Turbo Jet lost 10 horsepower (7.5 kW), now rated at 235 hp (175 kW) Also new for 1974 were integrated lap and shoulder seat belts and the unpopular "interlock" system that required the driver and front seat passengers to fasten seat belts in order to start the vehicle. The interlock mandate received so much public outcry that Congress rescinded it shortly after the introduction of the 1975 models. A new option this year was a remote control for the passenger-side outside rearview mirror.