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`New, Improved' US Cars in Surprising Demand Abroad

By Paul A. EisensteinSpecial to The Christian Science Monitor / April 26, 1990



DETROIT

SPEND some time on the Ginza in Tokyo these days and you'll notice American cars - Mustangs, LeBarons, Cadillacs - vying for space in traffic alongside the usual Camrys, Accords, and Sentras. And on Germany's Autobahn, you'll see Chrysler Voyagers, Corvettes, and Lincoln Continentals.

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Five years ago, only a trickle of United States-made motor vehicles were making their way abroad. But this year, at least 305,000 US cars and trucks will be sold in foreign markets, roughly 2 percent of total North American output. That will be the highest figure since 1957, when exports totaled 312,880.

``We're talking about 450,000 units by 1995,'' says George Magliano, a research director with Economic Consulting and Planning Inc.

The growth is particularly amazing when you consider how quickly it's come. In 1985, the ``Big Three'' US automakers - General Motors Corporation, Ford Motor Company, and Chrysler Corporation, exported just 42,483 vehicles. That was the lowest level since the days of Henry Ford, when American-made vehicles dominated the world's markets.

Considering that the average car today carries a sticker price of nearly $14,000, the growth in exports could help shave billions of dollars a year from the massive US trade deficit.

The US export base weakened for a variety of factors, including a strong dollar, which priced many of exports out of competition. Closed markets, such as in South Korea, also played a factor. But US automakers admit they bear the brunt of the blame.

``The cars we were building in the early '80s didn't have the international appeal ... or quality ... of the products we're building today,'' admits Dale Hermiller, the executive in charge of the export division of General Motors.

And indeed, industry experts attribute the export turnaround as much to the overall improvement in the quality of American automobiles and light trucks as to the weak dollar.

While cars and truck designs the world over are becoming increasingly similar, some of the US products most popular overseas are distinct to this market.

Chevrolet's big Caprice is very popular in the Mideast, for example. And minivans are a big hit across Europe, where an increasing number of motorists are just discovering the versatility of light trucks - as Americans did in the early 1980s. That's especially good news for Chrysler, which is heavily dependent on its minivans and Jeeps in the home US market.

Chrysler is becoming particularly aggressive about exports for a very simple reason: It was forced to sell off its European assembly operations in the late 1970s to help stave off bankruptcy. Unfortunately, Europe has become the world's biggest new-car market - and a major source of earnings of both Ford and GM.

``So the only realistic way to tap the European market for them is by building a large export base,'' says David Cole, head of the Office for the Study of Automotive Transportation at the University of Michigan.

By 1995, Chrysler hopes to be exporting as many as 200,000 cars and trucks a year, or the equivalent of one full assembly plant. At a time when there's a glut of automotive production capacity in North America, that's especially appealing to a company that has been forced to close three plants in the last few years.