Business Notes AUTOS

When the first Pontiac Fiero hit the streets in 1983, automobile buffs waxed ecstatic. The two-door coupe had the sleek lines of a sports car, and its original base price of $7,990 made it comely even to cash-conscious commuters, who did not mind that it had only two seats. A molded plastic exterior and an engine placed just behind those seats to improve handling gave the auto a justifiable reputation for innovative design. But last week parent company General Motors, citing decelerating sales, suddenly slammed the brakes on all future production of the Fiero (the Italian word for proud).

After a promising debut, the car got into trouble. Last year GM had to conduct a reputation-denting recall of all 1984 models because of a defect that occasionally caused engine fires. Fiero's demise may also have been helped along by steep insurance rates, which ran as high as $5,000 in some states because the young unmarried men who favored the auto were generally considered high-risk drivers. Fiero suffered too from a surfeit of two- seaters. With as many as five other such cars seeking a chunk of a dwindling market, Fiero sales fell from nearly 102,000 in 1984 to 47,000 last year. This year analysts expected sales to drop as low as 25,000.

Wall Streeters applauded the Fiero's dumping as a decisive move by GM, which has endured sagging profits in the past two years. But the news caused no cheer in Pontiac (pop. 76,715), Mich., where GM will idle the Fiero plant and lay off 1,100 workers.