Why imports hold firm in US auto market
Detroit — US automakers are tweaking their import battlers for 1983, but the word around the beleaguered motor capital is that the foreigners will stay as competitive as ever on both the pricing and product fronts.
An ironic blow to the domestic subcompacts has been the strengthening of the US dollar against Japanese and European currencies.
This means that the Japanese could reduce their American prices because of the cheaper value of the yen - a situation already reflected in the Plymouth Champ-Dodge Colt reduction to less than $4,600 and in a price war that has lowered base prices of imported Japanese pickup trucks to as low as $6,570 to meet new domestic competition from each of the ''big three'' in 1982 - the Chevrolet S-10 and GMC S-15, Ford Ranger, and Dodge Rampage.
Indeed, imports are winning a larger share of the US automobile market than ever before. In July, for example, imports seized 31.7 percent of the total sales volume, surpassing the previous ''penetration'' record of 31.6 percent set last December.
The boost in market share is being achieved on lower volume for the foreign-built cars because of the continuation of restraints on the number of cars being shipped to the US by Japan.
For the second year in a row, the seven importers of Japanese-built cars are limited to US shipments of 1,680,000 new cars. The cutback will be reviewed next spring by Tokyo in the light of prevailing US market conditions at the time. Most observers expect the voluntary ''quota'' to be dropped for the third and final year of the US-Japan compact.
The high sales level of Japanese and European cars is the result of two overriding trends:
* Unabated interest in lower-priced small cars from across the Pacific.
* Record demand for ''upscale'' luxury sedans from across the Atlantic.
Several of the most expensive makes from Europe - Volvo, BMW, Saab, and Jaguar - have clipped along at record, or near-record, sales rates this year, although the volume figures are nowhere close to those achieved by the Japanese, which claim about 22 percent of the total US car market.
Even so, the success of the higher-priced European cars against the best that Detroit has to offer is equally disconcerting.
Indeed, unless a pending bill in the US Congress to mandate US production of the top-volume Japanese sellers is enacted, no domestic automaker or industry observer foresees any meaningful rollback in import sales or penetration during the 1983-model year.
The biggest importers - Toyota, Nissan/Datsun, and Honda - are matching Detroit price-cutting moves and model changes stride for stride.
Nissan's newly introduced Sentra subcompact, with a base-model price sticker of $4,949, has become the No. 1-selling import nameplate in the US; and this fall Honda will open an Ohio assembly plant for its popular Accord series in a first-from-Japan move, which should soften the sentiment against buying imported cars and light trucks.
As for Toyota, long the import leader, it has conducted negotiations with giant General Motors to co-produce a new car at GM's idle Fremont, Calif., assembly plant. The Toyota-GM talks follow the breakdown of Toyota talk with Ford for a similar venture last year and are seen as an effort by the leading Japanese carmaker to anticipate enactment of the local-content measure promoted by the United Automobile Workers (UAW).
Nissan has scheduled launch of a pickup-truck plant in Tennessee next year - another ''built 'em in US'' response from Japan. Of course, the first foreign automaker in modern times to assemble vehicles in the US was Volkswagen, whose Pennsylvania facility, which builds Rabbit cars and trucks, opened in 1978.
The UAW is the prime instigator of the local-content bill, endorsed by 202 members of the US House of Representatives. But the Reagan administration has expressed its opposition to the proposal in line with its free-trade philosophy, and it could be difficylt ot override anyveto in the Republican-controlled Senate.
Honda and Nissan are not the only "invaders" joining VW with US assembly. The French state-owned Renault, which has acquired a 46.4 percent stock equity in American Motors, has gone domestic with the Renault Alliance built at AMC's Kenosha, Wisc., works.
For cost-conscious buyers, pickings among imports have remained choice and promise to continue that way throughout 1983. No domestic cat except the Cheverolet Chevette comes close to a suggested retail price of $4,595 on end-of- 1982-model Plymouth Champs and Dodge Colts supplied to Chrysler Corporation by its Mitsubishi partner.
Other base-model imports priced below $5,000 as the 1982-model run drew to a close were the Datsun Sentra, Honda Civic 1300, Renault Le Car, Subaru hatchback , and Toyota Tercel. This array compares to the domestic Chevette Scooter's sticker price of $4,998 for a stripped-down model.
First of the '83-model cars to be priced was the Renault Alliance, whose two-door coupe in the stripped version will carry a suggested price of $5,595 - about $800 above the imported Renault Le Car three-door hatchback imported by AMC.
Sentra's first year on the US market as Nissan's successor to the 210 proved that a $5,000-ish price on a stylish front-drive car still was a strong puller in the US.
Far down the list and forced to close its US assembly plant for six weeks last summer was the once-champion VW Rabbit, whose eight-year-old styling and generally higher prices were blamed for its slow sales.
Looking to 1983, product changes will center on the trendy front-wheel-drive configuration.
The first Ohio-built Honda Accord will come off the line at the new assembly plant in Marysville, Ohio, around Nov. 1. As many as 140,000 Accords will be assembled in the first year and will be joined from Japan by a redesigned Prelude.
Toyota will restyle its front-drive Tercel this fall and add a four-wheel-drive wagon to the line. A front-drive Corona line is due after the first of the year.
Nissan, which highlighted 1982 with new front-drive cars in the Sentra and Stanza series, will reshape the 310 this fall and rename it the Pulsar. A diesel-powered Sentra also will reach the US.
Isuzu, GM's partner in Japan, took off on its own early in 1981 as a US importer stressing diesel cars and light trucks. The Japanese restraints hampered Isuzu's volume for the 1981 and '82 model years, but it now is planning to cover the eastern part of the US for 1983 and to add a sports coupe called Impulse in the US but Piazza in Japan.
From Mazda, whose exclusive rotary-engine RX-7 became the No. 1 seller of two-seater cars in July, eclipsing the Datsun 280-ZX, the gasoline engine 626 is in for a revamping. The Mazda, built by Ford partner Toyo Kogyo, also introduced a diesel pickup truck in 1982.
Effective Oct. 1, the Japanese import lineup will expand when Chrysler's partner, Mitsubishi, begins US sales. The Mitsubishi line will not conflict with the Colt subcompact and Challenger/Sapporo sports coupes sold by Chrysler, but will instead focus more on upscale coupes and sedans and add a turbocharged coupe called the Starion.
Subaru, which pioneered in four-wheel-drive cars on the US market and still has no competitor except for the AMC Eagle and Eagle SX-4, is seriously looking at breaking open the ''micro-mini'' market with its Rex carlet. The Rex from Fuji, builders of the Subaru, is one of several high-volume minis sold in Japan. GM this year concluded negotiations to develop a 1985-model minicar with Suzuki, a Japanese producer of Fronte and Alto pint-sizers, and GM's partner, Isuzu.
Underpriced by Japan, Europe-based imports have all but abandoned the small-car market in the US.
Volkswagen will add an upper-thrust GTI ''performance'' model to its Rabbit line this fall as a domestic production item but will concentrate its import side on such upscale series as the Rabbit convertible, the Scirocco coupe, and the Quantum series.
To beef up its lagging diesel Rabbit volume, victim of higher diesel fuel prices in the US, VW will offer a turbocharged diesel engine on US-built Rabbits. The Rabbit diesel was the Environmental Protection Agency economy leader for 1982, but Nissan expects its 1.7-liter Sentra diesel to claim first place for 1983.
On an upswing this year in sales, in focus with other higher-priced Europeans , are VW's marketing twins, Audi and Porsche. Audi has benefitted from turbocharged gasoline and diesel engines in the 4000 and 5000 series, plus introduction of the rakish four-wheel-drive $35,000 Quattro coupe and its clonish junior coupe edition (without four-wheel drive).
Porsche's new 944 coupe, successor to the Audi-powered 924, features a new Porsche four-cylinder engine and a total aerodynamic redesign.
In the first seven months of this year, imported car sales reached 1,300,529, a decline of 12.3 percent from the 1,482,968 sold in the same period last year. The import share of the total US market for the seven-month period was 27.9 percent in 1982 and 28 percent in 1981.
In terms of overall US car population, imports as of July 1, 1981, accounted for 17.6 percent, up from 16.4 percent a year earlier and an addition of fully 1 .2 million vehicles.