Password for '78: 'Downsize'

Can Americans really be persuaded that less is more? The nation's automakers, who for years emphatically argued precisely the opposite, are now betting heavily the answer is yes. With the start of the annual model changeover period, they have begun a massive retooling effort in which they will spend a record amount, some $2.5 billion, to bring about the broadest changes since Detroit sprouted tail fins in the 1950s. Now the industry's favorite new verb is "downsizing," and the products that will begin appearing in showrooms in about eight weeks will define what that means: cars that are shorter, lighter and, if not cheaper to buy, at least easier on gas.

New Names. In the process, the industry will introduce no fewer than 13 new or substantially altered model lines and drop several others, while further blurring the already fuzzy categories of car size. That fuzzifying began in earnest with the current model year, when General Motors inaugurated the downsizing trend by whacking nearly half a ton off the average weight of its full-size models. This time the other automakers are following GM's lead, with the result that a 1978 full-size car will be about as big as a 1977 mid-size model, and a 1978 intermediate will look more like a 1977 compact.

A good many of the new names due to appear in showrooms will be carried by subcompacts being introduced to do battle with the smaller, zippier imports, such as the Honda Civic and Volkswagen Rabbit, whose sales are booming. GM's current entry in this field, the trim little Chevette (base price: $3,225, v. $3,499 for a Rabbit), was introduced in 1975, but Chrysler now plans to follow with the country's first front-wheel-drive subcompacts, the Dodge Omni and Plymouth Horizon. Ford, too, will offer a front-wheel-drive subcompact, the Fiesta, though the car will be built by Ford subsidiaries in Europe and shipped to the U.S. American Motors' entry in the subcompact field will be the Concord, a shorter, lighter version of the Hornet, which is being shelved.

More important to Detroit than the subcompact trade--which, while growing fast, still accounts for just a bit more than 10% of U.S. sales--is the market for mid-size vehicles. This broad bracket, embracing compacts (such as Chevrolet's Nova and Buick's Skylark) as well as intermediates (Chevrolet's Chevelle, Ford's LTD II) and what the industry chooses to call luxury small intermediates (Chrysler's Le Baron and Diplomat), is accounting for 54% of all U.S. auto sales this year. By contrast, the traditional standard or full-size cars now account for less than 27% of all auto sales, luxury models under 6%.

The manufacturers are pushing nearly every name plate they have into the field. Some, like the Oldsmobile Cutlass--the nation's most popular model this year--are not only being reduced in size and weight but also redesigned with boxy, hatchback-like profiles in order to retain interior passenger and cargo space. Oldsmobile will market the first mass-produced diesel models in U.S. auto history. Some lines will be scrapped altogether; Ford will drop its dated, slow-selling Comets and Mavericks and replace them with new compacts, the Fairmont and Zephyr, that will sport a lean European profile and rectangular head lamps.

The drive to downsize is a result of the ever-tightening federal fuel economy standards, which require each company to meet a series of rising average mileage targets for all of its products: 18 for the 1978 models, 20 in 1980 and 27.5 in 1985. Engineering innovations, such as electronic ignition and fuel injection, are helping Detroit meet the mileage goals, but the simplest way to get more out of a gallon of fuel is to make the cars smaller and lighter.

Buying Trends. There are signs that motorists are not overjoyed with this solution. GM officials conclude that when the company trimmed down its bigger cars this year, many buyers deserted to Ford and Chrysler. Now, with the whole industry downsizing, big-car addicts will find fewer alternatives.

Motorists will also discover that smaller does not mean cheaper. Although price tags have risen an average 40% over the past five years, manufacturers maintain that their costs have been going up even faster. At GM, which is the industry's price leader, the average base price of a car rose about $270 this year to $5,400, meaning more than $6,000 with air conditioning, a radio and some other options. GM is expected to raise its sticker prices for the 1978s by perhaps as much as 6%.

With so many changes in the works, the last thing the automakers need is an abortive start to the autumn selling season. Yet that is exactly what may happen if Congress does not amend the Clean Air Act before adjourning later this month. The car makers want a grace period before having to meet the strict auto pollution standards for 1978, claiming that present technology will not permit them to meet the goals without driving up gas consumption beyond the limits set by other federal laws. Though Congress has not yet acted, the automakers have tooled up their '78 models to conform to the less strict 1977 standards anyway, knowing that if the law is not changed in time, they cannot deliver their cars to dealers without risking a $10,000 fine on every car shipped.

The manufacturers have begun to warn of massive layoffs and plant closures later this summer. "Bureaucratic brinksmanship," grouses GM Chairman Thomas Murphy. With 1977 auto sales booming and prospects good for a year-end total at or near the alltime industry record of 11.4 million in 1973, a regulatory shadow over the 1978 models could give a boost to that group of automakers who have argued all along that bigger is not necessarily better--the foreign-car manufacturers.

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