Japanese carmakers target the engine-savvy market

Now that Japan has agreed to cut its car shipments to the US for two years, and possibly three, the imported-car industry is mounting a new type of challenge to the embattled domestic automakers.

This time, the Japanese and European manufacturers are going after the domestic competition on the technical, under-the-hood side of the equation and tempting US buyers with wider choices of firepower instead of sheer numbers of economical models.

The net effect has been to widen the choices available to US shoppers and expand, rather than contract, what import dealers are selling in terms of engine and body-style options.

By adding diesel engines, turbochargers, and body styles, the importers have increased the number of models offered US buyers to a record 177 as of March 1 compared with 156 a year earlier. There now are 28 different makes of imports on the market, up from 25 a year ago, with the addition of the Isuzu from Japan, the Rover from Britain, and the De Lorean from Northern Ireland.

In lockstep with the proliferation of import choices has been an upward price spiral, however.

Top-selling imports raised their average suggested retail price an average of News, the trade weekly.

The average boost in the sticker price also was a new record, eclipsing the increase of $187.89 in the previous year as well as the former peak of $690 in 1978-79.

Toyota, for example, the No. 1 import seller, listed as many models as Chevrolet -- 27 in all -- in the period preceding introduction of the new Cavalier J-cars later this month. But at the same time Toyota was raising its model count, the volume Japanese producer also was posting a series of three price increases in a row on 1981 US models because of currency fluctuations and inflation at home.

The battle for sales between the importers and the domestics has grown in intensity now that the main contenders from Japan -- the economical compacts and subcompacts --have finally been pitted against viable entries from Detroit.

GM's X-cars, Ford's Escort and Lynx, and Chrysler Corporation's K-cars were all launched as "import fighters" aimed at the volume sellers from Toyota, Nissan (Datsun), Mazda, Subaru, Honda, and Mitsubishi.

In spirited competitive fashion, the Japanese and European imports have struck back with a wider array than ever before of new engine options and body styles, some of which have had the effect of "upscaling" the foreign makes into pricing segments hitherto dominated by the domestic offerings.

Diesel engines and turbochargers, which recycle exhaust-system air to boost engine power when needed, have placed this year's import new-product developments.

Japan's first diesel car, featured as an all-new entry from Isuzu, has reached American shores as an updated subcompact akin to the defunct Isuzu-built Opel. Sweden's Volvo has introduced the first 6-cylinder diesel engine offered by any import.

Turbocharged models have been launched by Audi on the 5000 series, Datsun on its top-of-the-line 280-ZX sports coupe, Fiat on the Spider 2000 convertible, Saab in the form of a 4-door notchback sedan added to its 900 Turbo series, Peugeot in a turbo-diesel configuration for the new 505 line, and Porsche on the 924 coupe.

Audi will introduce a sporty coupe in the US in late May which is called the Avant in Europe.

At the highest end of the import market, completely restyled cars have come from Mercedes-Benz with the 380 "S" series replacing the 450; Alfa Romeo with a fresh GTV-6 sports coupe; Datsun and its Japanese archrival Toyota, with the 810 Maxima and Cressida, respectively; and the newest import on the block, the long-awaited De Lorean DMC-12 built in Northern Ireland.

The De Lorean 2-seater launch, after years of planning by former GM group vice-president John Z. De Lorean -- underscores the upgrading strategy switch by many importers. Suggested retail price for the De Lorean coupe is close to $25, 000, while the 1981 Mercedes 380 sedans are sticker-priced at about $35,000 for the diesel model and $45,000 for the normally aspirated gasoline engine.

Not lost on importers in the aftermath of their record US sales last year is the fact that individual company peaks were reached by three of the highest-priced entries -- BMW, Mercedes, and Volvo -- as well as the economy-imaged Japanese.

At the same time, in the face of mounting competition from Detroit, the Tokyo contingent is not sitting on its laurels.

Mazda switched its GLC subcompact to popular frontwheel drive this year, while Toyota phased a rear-drive Starlet minicompact into its lineup.

From Honda, which has been crowding Datsun for the No. 2 sales spot in the US , came a 4-door notchback sedan in its Civil series to complement the Accord notchback. Subaru facelifted its 4-wheel-drive cars, exclusive among imports with 4-wheel drive. The Chrysler Corporation captives from its partner, Mitsubishi -- Colt-Arrow-Sapporo-Challenger --devoted increasing US-bond production to front-wheel-drive cars.

A closer tie than a mere marketing connection was the creation of a near-majority equity ownership by the government-owned French auto giant, Regie Nationale des Usines Renault, in relatively minuscule American Motors. Renault completed the purchase of 46.4 percent of AMC stock in December, shortly after US introduction of a new midsize Renault 18i series at AMC dealers.

The 18i sedan and wagon, joining the Le Car subcompact as AMC captive imports , form the beachhead of a long-range Renault program to step up its sales in the US.

The French company, which has invested more than $300 million in AMC, is designing a new subcompact car for production next summer at AMC's assembly plant in Kenosha, Wis.

The summer of 1982, in fact, will bring three US plant startups involving foreign-owned companies.

Honda, strapped for capacity in Japan, is building an assembly facility for its Accord cars at Marysville, Ohio, while pioneer US builder Volkswagen is tooling up a second plant for a Rabbit-derived model northeast of DEtroit in Sterling Heights, Mich.

It was three years ago this spring that VW began production of its Rabbit cars, diesel and gasoline, at Westmoreland, Pa., south of Pittsburgh. The West German make has steadily boosted its assembly rate, adding a pickup truck to the product mix last fall while maintaining the importation of five models built in Europe -- a Rabbit convertible, a 1980 1/2-model notchback spinoff called the Jetta, a restyled camper/van titled the Vanagon, and top-of-the-line Dashers and Sciroccos.

Late last year, a second Japanese manufacturer announced US assembly-plant plans as anti-import sentiment escalated. Nissan, builder of Datsun vehicles, began construction of a pickup truck plant at Smyrna, Tenn., near Nashville, for completion in the fall of 1983.

The import arena, thus, far from diminishing in its American market focus under the insistent pressures for restraints emanating from Washington and Detroit, is extending its reach wherever potential sales exist.

Indeed, the most expensive make sold in the US unveiled new models this spring and several more Japanese automakers pressed ahead with studies for introduction by 1984 or 1985 of so-called minicompact cars with 3-cylinder engines, now sold at home, but hitherto considered too small for American tastes.

Rolls-Royce has introduced the Silver Spirit, Silver Spur, and Bentley Mulsanne models, its first, new 4-door sedans in 15 years, at prices which start at around $110,000.

The new "minis" targeted for the US include offerings from both Nissan and Subaru. VW, Fiat, Renault, and Peugeot also sell smaller-than-subcompact-size cars in Europe which could fit into export parameters if the market opens up.

After rising in calendar year 1980 to an all-time annual high of 2,395,036 sales in the 50 states, 2.9 percent gain from 1979, imported cars fell 9.2 percent in the first two months of 1981 to 397,435 retail deliveries. The annualized rate, however, has still been running at the 2.4 million level although Japan now has pledged to cut back its car shipments to 1,680,000 this year compared with 1,820,000 in 1980.

More disconcerning to the "big three" and United Automobile Workers executives has been the imported-car share of the US market. The steep plunge in domestic-make sales last year allowed imports, on a volume rise of only 69, 005 cars from 1979, to corral a record 26.7 percent of total US sales, up from 21.9 percent.

Nearly all of the gain in imported penetration came from Japan, whose exporting automakers accounted for more than 4 out of every 5 imported new-car sales for the first time.

Coming for the 1982-model year from abroad are a front-wheel-drive Datsun 210 subcompact; Toyota sports coupe called the Soarer; V-6 engine and convertible for the Honda Accord; redesigned VW Scirocco and Dasher; restyled BMW 528 sedan with a new turbodiesel engine; updated version of Peugeot's top-of-the-line 604, also with a fashionable turbodiesel power plant; and Renault coupe spinoff of the 18i called the Fuego.

Import sales last year reached as high as 51.5 percent of total car volume in the huge California market, setting a blazing pace which saw the "invaders" snag more than 30 percent of the market in no fewer than 22 states.

Detroit is battling back against the import waves with its front-wheel-drive economy models -- the GM J-cars, Chrysler K-cars, and Ford's Escort/Lynx.

In reaction, the imports are digging in with their vast American owner universe, promising to meet Detroit's technological advances with new guns of their own.