Floodtide for Imports

"It's the hottest car in the U.S. today," says New York City Auto Dealer Frank Silvestry of the Honda Accord. Many experts would agree. Pertly styled, carefully engineered, with front-wheel drive and able to travel up to 48 miles on a gallon of gas, the Japanese-built Accord practically sells itself, and buyers around the country are willing to wait three to eight months for delivery. The Accord, however, is only the most spectacular example of the massive assault on the U.S. being made by imported cars, which now account for 21% of all new autos sold in the American market. In May foreign car sales surged to 220,000 units, the highest monthly level ever and a stunning 72% increase over the same period last year. By contrast, domestic car sales last month rose 5.1% over the previous May, to 833,393--about 40,000 less than some industry experts had predicted.

Spearheading the import drive are the Japanese automakers. Toyota's models are the biggest sellers, Datsun's second and Honda's third. Volkswagen, once the undisputed leader in auto imports, now ranks fourth--even though sales were up 80% in May over a year earlier. Part of the reason for the imports' jolting success is that they are generally small compacts, lean on fuel and relatively comfortable to drive. One senior Detroit auto executive wondered last week "how the foreigners can produce that much value for the money." Some industry analysts think that foreign-car sales, growing for months, were given a lift by President Carter's energy message in late April, which stressed the need for more fuel-efficient autos.

Another reason for the success of imports is that U.S. automakers have dealt in the small-car market with their left hands. They have done little more than scale down existing models to meet the challenge of foreign competition. Chevrolet's Vega has been a dud; the Chevette is cramped and lacks style, and so does Ford's Pinto, despite its healthy sales. Detroit does share indirectly in the import boom through sales of autos built abroad by subsidiaries or affiliates of U.S. companies. That includes such models as the Dodge Colt, the Plymouth Arrow and the Buick Opel, all built in Japan, and the Lincoln-Mercury Capri, assembled in Germany. Ford expects to roll out its German-made Fiesta in U.S. showrooms later this summer.

Nice Problem. But American automakers will not be ready with U.S.-engineered cars capable of meeting the foreign challenge until the start of the 1979 model year, about 15 months from now. At that time, General Motors, for one, expects to be offering front-wheel-drive models with small engines that consume little fuel. Until then, industry analysts say, the only thing that could slow sales of imported cars would be an inability of foreign manufacturers to make and ship their models to the U.S. fast enough to meet demand. American automakers should have such a problem.

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