Where Autos Are Headed

If there is one part of U.S. business that is vibrantly healthy, it is the auto market. Sales are galloping 30% ahead of last year, production is up 50%. The country clubs of Bloomfield Hills echo with bullish snorts about a 6.6 million car year, including imports, best since 1955's fabled 7.1 million. This is important to the whole economy because autos mean steel, rubber, glass, zinc, aluminum and textiles, and also because of the popular belief that if autos roll well not too much can be wrong with business in general. Now the spring selling season begins, and it will determine whether automen will have a good year --or a great one.

The Golden Boys. So far the 1962 auto boom is big but bumpy. Not in years has General Motors been so strong or Chrysler so weak.

G.M. has an embarrassment of riches. With Frederic Donner, a tack-sharp onetime accountant, as chairman, G.M. now commands 55.7% of the U.S.-made auto market. That is a company record, the highest in the industry since Henry Ford's model Ts got 60% in 1921, and more than enough to prompt some nervous glances from G.M. officials toward the U.S. Justice Department, whose antitrust division constantly eyes the affairs of the world's biggest manufacturer. This year G.M. has conspicuously dropped its usual practice of stepping up Chevrolet advertising as its sales increase. There have been no recent dealer incentive contests for fast-selling Pontiac. Oldsmobile or Buick.

Two of G.M.'s golden boys are Edward N. Cole, 52, and Semon ("Bunky") Knudsen, 49. Cole (TIME cover. Oct. 5, 1959), who piloted Chevy and fathered the fast-selling Corvair and Chevy II before recently becoming group vice president for all car and truck divisions, can take much credit for the fact that Chevy alone has captured 33% of the market. Vice President Knudsen, who was Pontiac boss before he succeeded Cole as Chevy chief, was the man who souped up the Pontiac styling and is now seeing the new Chevy II compact selling briskly without eating into sales of the regular Chevy or the smaller, sporty Corvair. Pontiac rides in third place in sales across the nation (behind Ford's Ford division), Oldsmobile has risen to fourth (from fifth last year) and Buick to fifth (all the way up from eighth).

Why is G.M. so hot this year? Says a vice president of a competing automaker: "Every time there is a surge in sales, G.M. increases its penetration. It's simply a case of the guy who has the most stores getting most of the new business." G.M. has almost 14,000 dealerships, Ford 8,000, Chrysler not quite 6,000, American Motors 3,000, Studebaker little more than 2,000. There is, of course, more to it than that. G.M. has improved its styling (notably on Buick and Oldsmobile), does not have a single dog in its garage. "We thrive on competition," said Ed Cole in a speech last week that seemed to be aimed at reassuring Bobby Kennedy and his trust busters. "It makes us more responsive to modern needs and demands of the American public."

Not all companies are thriving on the competition from G.M.

Whither Chrysler? Chrysler Corp., relegated to the back seat among Detroit's Big Three, has skidded from 18% of the market in 1957 to 9.6% this year. At the rate it is now selling, it has a 91-day backlog. All of its vaunted "European"' styling has not stalled the continued decline of Plymouth, Dodge, Valiant and Lancer. Chrysler has pinned much of its hopes for a future comeback on its new chief stylist, Elwood Engel, 45, who was netted last fall in a raid on Ford, where he was a disciple of flamboyant George Walker and had much to do with the elegantly clean 1961 Lincoln.

There are some bright spots at Chrysler Corp. The big Chrysler, now stripped of the fins of yesteryear, is the only non-G.M. car to expand its market share this year (currently: 1.95%). The company has considerable cash reserves (total: $81 million). New Chairman George Love, 61, and President Lynn Townsend; 42, are investing heavily in developing more salable cars and stronger dealerships. They have also slashed away so much of the overhead, deadwood and inefficiency of previous management that Chrysler racked up an $11 million profit in 1961 despite sharply reduced sales.

Larks on the Wing. New brooms are fairly common in Detroit these days. Under Chairman Henry Ford II and John Dykstra, 63, who is rounding out his freshman year as president. Ford has increased sales by 14% over last year's rate, though its market share is off slightly to around 28% because G.M. is getting so much. Production Expert Dykstra and Ford Division Chief Lee lacocca. 37, face a vexing problem: their new intermediate-sized Fairlane is off to a fast start, but it seems to be stealing sales from the Falcon and lower-priced Galaxy. Falcon, the No. 1 compact in 1960 and 1961, is being outsold by American Motors' Rambler this year. Over at American, new President Roy Abernethy is optimistic because his sales are at a record for this time of year, although the company's market share has slid a bit.

Even little Studebaker-Packard is doing better. Its Larks apparently have benefited by borrowing some styling ideas from Germany's Mercedes-Benz, which S.P. markets in the U.S. Despite a six-week strike earlier this year, Studebaker has boosted its market share from 1.3% to 1.9% in early March. To demonstrate his confidence that S.P. is here to stay, new President Sherwood Egbert last week announced the purchase of a new company, Paxton Products. It manufactures superchargers.

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