More Miles for More Sales

Struggling out of their worst slump since the Depression, the nation's automakers are entering the new model year with a traditional burst of promotional ballyhoo and high hopes of recovery. Over the next few weeks, Ford, General Motors, Chrysler and American Motors will officially introduce the 1976 models now rolling off their assembly lines. Generally, the new cars will cost more than the '75s and show only the barest styling changes. But Detroit is gambling that its main selling point for '76 -improved fuel economy -will bring enough buyers back to the showrooms to end the industry's two-year sales decline. While admitting to some concern that the nation's economy seems "a little bit shakier" now than it did earlier this summer, Ford Chairman Henry Ford II last week predicted that "we'll have a good year in '76."

It would be about time. The industry is still feeling the effects of the energy crisis and the nation's bout with recession and double-digit inflation, which cut deeply into Americans' buying power -and Detroit's sales. So far this year, in fact, sales of domestic cars have been even softer than they were in 1974. Last year U.S. automakers sold 7.4 million cars, down 24% from 1973's record 9.7 million; this year the total may well slip under 7 million for the first time since 1962. Yet imports have been able to expand their normal 15% share of the U.S. market to 20%.

U.S. automen say that the key to recovery is a rise in confidence among consumers that it is safe to go into debt to buy a new car. The carmakers have thus been troubled by the recent spurt in interest rates and a midsummer dip in polls measuring consumer confidence. But many Wall Street analysts believe that American motorists cannot sit on their wallets much longer. By some estimates, nervous consumers have put off buying 4 million cars over the past two years, creating a reservoir of demand that Detroit could well begin to tap with its 1976 models.

One imponderable is how the public will react to a third increase in auto prices in as many years. The cost of buying a typical car has already risen by $1,000 since 1973. But General Motors has announced that it will raise the base prices on its 1976 models by an average of 4.4%, or about $206 per car, and other automakers are sure to follow. To keep the hike in sticker prices below last year's 8% to 9% increases, manufacturers are changing some items that were previously listed as standard equipment into extra-cost options. The auto companies are also holding down costs by minimizing changes in body design. Instead, they are offering new colors, splashy paint jobs and even more luxurious interiors on some models. Ford's new Lincoln Mark IV, for example, will be available in Carder, Bill Blass, Givenchy and Pucci "editions."

Lincoln's designer cars typify one side of today's schizophrenic auto market. Recession or no, sales of big luxury cars are booming; Cadillac's $12,479 "international size" Seville helped carry total Cadillac sales to an alltime monthly record of 25,000 cars in July. But standard-sized cars are gathering dust on dealer lots, because the swing of more budget-conscious buyers to smaller, lighter models that are stingier on gas is developing more quickly than Detroit had expected. This year for the first time, small cars have captured more than 50% of the market.

The trend toward trimness is reflected in the few totally new 1976 cars. One is GM's Chevette, a hatchback "sub-subcompact" that is being built in the U.S. to compete in the same price ($3,000 to $3,500) and mileage (roughly 38 m.p.g. on the highway) class as Volkswagen's Rabbit. Ford last week announced that it would rush a minicar entry of its own Into production in Europe in time to reach the U.S. market in 1977. Chrysler plans to enter the mini field by 1980 with a front-wheel drive model, probably based on the car made by its French subsidiary, Simca.

Big-Car Feel. Chrysler's big effort this year is the introduction of two new lines of middle-sized "small luxury cars," the Plymouth Volare and the Dodge Aspen. They are part of an ambitious effort by the company to attract more of the kind of higher-income-bracket, relatively recession-resistant customers who have been buying the successful new $5,000 Chrysler Cordoba. The Volare and Aspen lines will include sport coupe, sedan and station-wagon models, each featuring all-independent suspension to give big-car driving feel.

Ford has no entirely new cars this year, but is stressing the more efficient engines in all of its 1976 models. Ford claims that its '76s will deliver 25% better gasoline mileage than its '75 cars, which produced a lackluster 13.5 m.p.g. average in Government tests. If the public proves to be as sold on fuel economy as the automakers profess to be, Detroit's prospects could be brighter than they have been in some time.

This file is automatically generated by a robot program, so viewer discretion is required.