Reply to Imports?

In Washington last week, General Motors unveiled the U.S. auto industry's newest challenge to fast-selling imports. GM's new minicar: the Chevette, a stripped-down, two-door hatchback driven by a four-cylinder engine and sticker-priced at $2,899 (a model with a back seat costs $3,098). According to GM, soon-to-be-released Environmental Protection Agency figures will show that the Chevette gets 28 to 30 miles per gallon in city driving and 39 to 40 m.p.g. on the highway.

GM clearly chose Washington for the unveiling to impress Government policymakers. They have doubted that Detroit could respond quickly to public clamor for low-cost transportation, but the Chevette was rushed into production in just 18 months. It will go on sale next month, with the initial marketing effort in cities that have been strongholds for Datsun (now the No. 1 selling import) and Volkswagen. GM's main target city: Los Angeles, where 49% of all new cars sold in August were built overseas. During the next twelve months, GM hopes to sell about 275,000 Chevettes, enough to help reduce imports' share of the U.S. market 5% to around 15%.

But Chevette's competition will not come only from imports. Last week Ford announced the Pinto Pony MPG, sticker-priced at $2,895, $4 below the Chevette and now lower than any other U.S.-built car. In an obvious slap at GM, Ford President Lee lacocca added, "The back seat comes at no extra charge."

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