First Round to the Foreigners

U.S. car sales have picked up strong momentum now that General Motors has restocked dealer showrooms after its 67-day strike last fall. G.M. Chairman James Roche's December prediction of 1971 volume totaling a near-record 9.5 million cars or more may easily be fulfilled. But the sales figures make even better reading for Japanese and West German automakers than for their American rivals. Detroit's car manufacturers are quietly burying their hopes that 1971 will be the year in which the imported-car invasion of the U.S. market is decisively repelled.

Those hopes flared brightly last September when the Ford Pinto and Chevy Vega began rolling off assembly lines to join the American Motors Gremlin in battling the imports. By then it was too late to keep imported-car sales from climbing to a 1970 record of 1,245,793 cars, or 14.9% of the U.S. market. American executives hoped that the availability of the three subcompacts would hold 1971 import sales to about 1,000,000 cars, or around 10% of a slightly larger market. Instead, imports so far in 1971 are accounting for 15.5% of all cars sold in the U.S. In January, sales of American-made cars jumped to an imposing 16% above a year earlier--but import sales leaped by a startling 26%. Japanese makers are posting the largest gains. Toyota's U.S. sales in January almost doubled from the level of the previous year, to 20,016 cars; Datsun's almost tripled, to 13,610.

Wooing Whom? One reason, apparently, is that Detroit did not make its subcompacts quite good enough or cheap enough to win over the majority of import buyers. A stripped-down, two-door Vega, for example, sells for $2,091 (including federal excise tax and dealer preparation charges) and a Pinto for $1,944, v. $1,899 for the basic Volkswagen. The subcompacts, though, are small and cheap enough to attract many motorists who might buy bigger U.S.-made cars if they felt more flush, but whose desire for economy has been sharpened by the bite of the 1970 recession and continuing inflation. A G.M. poll of early Vega buyers disclosed that 30% would have turned to a larger and more expensive G.M. car if the Vega had not been available.

With both imports and the U.S.-made minicars gaining at the expense of full-sized, intermediate-priced autos, small cars now account for 33% of all sales. That is double their market share in 1966 and far more than Detroit had expected. Luxury cars are also selling well: both Cadillac and the Continental Mark III are seeing sales records. Despite the runaway pace of total sales, the product mix is far from the most profitable for U.S. automakers.

Consolation Level. Last week Detroit threw some reserves into the sales battle. Pontiac unveiled its first small car, the Ventura II, built on the same 111-in. wheelbase chassis as Chevy's compact Nova. Ford introduced a second model of its front-running Pinto subcompact, a "runabout" that has an upward-opening rear door much like the Vega's or Gremlin's. Increased supplies of the Vega may help to curtail sales of imports too; Chevy still has not reached its goal of building 1,600 Vegas a day, but hopes to do so in late March or early April.

U.S. automen, however, no longer expect to make any significant progress against imports this year. "Under the circumstances, the best we can hope for is some leveling off," says Elliott M. Estes, a G.M. group vice president. So long as total sales approach record levels, of course, the automakers are consolable. If Detroit had not introduced the subcompacts, the imports might well have grabbed a third of the U.S. car market.

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