Picking Up the Pace

Halfway through the car model-year, automakers were elated to learn last week that sales during the normally dull quarter from January to March were surprisingly high. A spurt of car buying during the last ten days of March had already started Detroiters smiling, but it was not until overall figures were published that their most optimistic extrapolations could be verified. More than 2,000,000 cars were sold in the quarter--up 18% over the same months of 1967. The volume for the first quarter of 1968 was surpassed only in the record years of 1965 and 1966.

The track record of the Big Four:

> Chrysler set records during the first quarter of 1968, and March sales indicated that there are still better days ahead. After six months of the model year, Plymouth's Fury is some 30,000 units ahead of last year's model, and all Dodge models are doing well. Chrysler's market penetration was up two percentage points to 17.5%, chiefly because sales of Plymouth's intermediate Belvedere have climbed substantially.

> American Motors' Javelin, a Mustang-like model, has been the vital difference between corporate profit and loss. A.M.C. has increased its share of the market from 2.92% in 1967 to 3.2% for the first six months of this model-year. Of the two intermediate models, Rebel sales are off from last year, and Ambassador is also down slightly.

>Ford is still recovering from the strike last fall that cost it more than 6% of the market, dropping its share to 19.7% despite recent gains. Fairlanes are running twice as well as in 1967, but Mustangs continue to slip each month. Mercury's Montego is popular, while the sporty Cougar has just managed to match last year's sales level.

> General Motors, with no strike problems, increased its share of the market by nearly 2%, taking 49.85% of the total. Pontiac is a big star this year, with first-half sales climbing from 392,863 to 426,874. Both Buick and Oldsmobile have held their own, but Chevrolet models have proved a mixed bag. Corvair has slipped by about 10,000 units from a poor 17,986 sales last year. So far this year, Chevy II and Camaro have saved the day. Cadillac continues at its phenomenal pace, selling all the models that the division can turn out.

The biggest shadow in Detroit's future is the growing popularity of foreign models. They now control 10% of U.S. sales, and in Southern California, the auto industry's most lucrative regional market, they have cornered an impressive 25%. Ford's Executive Vice President Lee lacocca says that it is a matter of price. "People say: 'Where can I buy a car for $2,000?' It's that simple."

The foreign invasion has indeed caught Detroit with its prices up. In the late 1950s, U.S. carmakers met the same challenge by introducing compacts, but prices and sizes for those models have risen sharply, resulting in the same old problem. Volkswagen, with its new "automatic stick shift" that offers the driver a choice of changing gears or not, now ranks No. 3 in sales behind the big Chevy and Ford models.

Best guess is that most companies will try to combat the foreign-car gains by following G.M.'s lead and increasing imports of their own models from abroad. General Motors Opel, manufactured in Germany, now ranks second among foreign cars in the U.S., between VW and the increasingly popular Japanese Toyota.

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