Changeover in Detroit

In Ford's large and clangorous Wixom plant just west of Detroit, the first 1966 autos--restyled Lincolns and Thunderbirds--rolled off the line last week. Throughout the industry plants closed down their production lines and began the changeover to the 1966 models, which will hit the showrooms beginning in late September. So insatiable is the national curiosity about Detroit's new models that the industry has, as usual, begun to be besieged by leaks, peeks and broad speculation. With the new models ride the automakers' hopes that the nation's most important industry can continue in 1966 the spectacular successes of the past four years, which have contributed as much as anything to the record advances of the U.S. economy.

The auguries are favorable. Industry reports last week showed that auto sales in July rose 18% to a record, and that production set a new high for the eighth straight month; even in the turnover month of August, production is expected to climb 58% over last year. Some auto plants have been working three full shifts, seven days a week, yet still cannot outpace demand. For the full year, U.S. automakers expect to build 9,100,000 cars for the best year in history; that would be 18% more than last year and 65% more than in 1961. Such a spectacular year has 1965 been that to come even near it in 1966 would be quite a feat. Detroit hopes to do at least that.

Fading from the Scene. The whole auto market continues to change. The percentage of U.S. families that own more than one car has increased from 18.8% in 1962 to 23% now, and continues to climb. The hottest U.S. buyers of both used and new cars--youngsters aged 16 to 24--have grown in numbers from 22 million in 1960 to 27 million today. The rate of auto scrappage has moved up from 5,600,000 last year to 6,100,000 this year, which means that Detroit can now bank on an annual re placement market of more than 6,000,000 cars. More and more people are also tempted to trade in their old cars for new ones because used-car prices are high; sales of used cars in June rose 3% to a ten-year peak.

Consumers' intentions to buy new cars in the next few months are just as high as ever, reports the University of Michigan's Survey Research Center. Whether they will remain high will hinge largely on how well the '66 styling goes over. Unwilling to tamper with styling that has worked so well, Detroit plans no big dramatic changes. The trends will be to even more luxury options (example: a push-button system that enables the driver to set his car to a given speed and cruise without touching the accelerator), more powerful engines, longer bodies, less chrome. One of the major changes will occur in Ford's Falcon, which has borrowed liberally from the successful Mustang, with a short rear deck and a long hood; like most other Ford models, the Falcon has also adopted the hop-up, or gently swelling rear-fender curve, pioneered by General Motors.

All the automakers will lengthen their intermediate models, making them less like compacts and more like standard-sized cars. The compact concept will continue to fade from the scene; sales of compacts and intermediates have been falling off. G.M.'s Chevrolet and Pontiac, Chrysler's Dodge and most other standards will have only minor alterations in grille and trim. Ford's Lincoln Continental will have a new grille emphasizing horizontal lines and a hop-up in back. Chevrolet and possibly Pontiac intend to bring out new sports cars some time during 1966 to compete with the Mustang.

Neither Down nor Out. As the model year comes to a close, Detroit's Big Three can each claim sales records. General Motors' Chevrolet Division led the race for the sixth consecutive year, with just over 2,000,000 sales of the '65s through July 31. Ford Motors' Ford Division jumped 25% to 1,760,000, powered mostly by 445,000 Mustang sales. Ford moved faster than its chief rival in one important sense: its share of the total auto market rose from 22.2% to 24.9%, while Chevrolet's dropped from 31.8% to 28.4%. A sharp gain was made by Chrysler's Plymouth, whose sales jumped by one-third over the year before to 528,000, and whose market share advanced from 6.2% to 7.5%.

Detroit's only slow mover was American Motors; its model '65 sales fell from 341,000 cars to 314,000, and its share of the market from 5.4% to 4.4%. Last week troubled American slashed its quarterly dividend from 25-c- to 12 1/2-c-. Its 1966 cars, showed off to dealers in Chicago last week, have some racy names (Rogue, Rebel) and racy options (tachometers, walnut paneling), but they look much like the '65s, have short wheelbases when the trend is to greater length. Despite its troubles, American is still a profitable, billion-dollar company, and the auto market is so promising that it would be difficult to count any manufacturer down, let alone out. For the industry as a whole, auto economists can only see smooth roads ahead.

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