To win, carmakers must turn out more new models in less time. DETROIT SHIFTS GEARS

The name of the game in Detroit is getting new automobile models on the market. This is where the hottest part of the battle in the United States auto market is being won - and lost. It still takes US manufacturers an average of five years to style, design, engineer, prepare tooling for, and begin production of a new car model.

But now, American automakers are being challenged to bring new car models to the consumer at least as fast as their Japanese, Korean, Italian, and German competitors. That can mean moving a car from concept to production line in 3 years or less - as the Japanese do.

``The US auto market is already fractionated,'' says Ralph Miller, president of Modern Engineering, an independent auto design company in Warren, Mich. ``A customer has more choices. He can be more fickle. He can want this today and that tomorrow. So the demand is to get closer to the marketplace, shorten lead times, cut cost, improve quality, deliver more for less in order to win.''

Delivering more new products in smaller volumes to niche markets and still making money - that's what today's auto competition boils down to, agrees Anthony Sheriff, an industry design analyst at the Massachusetts Institute of Technology's International Motor Vehicle program. The days of firing up a production line to produce 500,000 or more of every car model are gone, he says. What will be important for a car company in the 1990s is to survive without huge economies of scale - producing some models in volumes as low as 15,000 before changing to a new model.

``Volumes are going to go down,'' Mr. Sheriff says. ``Manufacturers that can build in smaller volume and be more flexible in shifting to new models are going to win.''

Who is winning now? Sheriff says there's not much question. A recent study he conducted for MIT of Japanese, European, and US companies compared the rates of new model introductions.

By 1982, Japanese companies had 47 models of automobiles for sale worldwide, but increased that to 73 models by 1987 - nearly doubling their offerings. By comparison, American companies had 24 car models for sale in '82 and increased the number to 36 by 1987.

Another important category is model age. Rapid model turnover is a key to enhanced profits, because keeping the age of models low is increasingly important to consumers who can choose from a greater variety of up-to-date models.

Even though the Japanese almost doubled the number of models on the market, Sheriff says, the average age of their products only rose from 1.5 to 2.1 years. But by comparison, he notes, the average age of models produced by Ford, GM, and Chrysler increased from 2.9 years to a relatively old 4.6 years.

``The bottom line,'' Sheriff says, is that ``the Japanese have somehow been able to keep up a tremendous rate of new product introductions. They have introduced 93 new models or replacements for old models during the same period US companies brought out 30 new products.''

Typically, US and Japanese automakers are dealing quite differently with the competitive challenge. To speed up new model introduction, Detroit has begun in earnest during the past four years to ``outsource'' engineering of entire cars to small, entrepreneurial design companies like Mr. Miller's Modern Engineering. Using these firms is faster and more economical than doing the work ``in house.'' But some analysts worry that US automakers will lose the engineering ability to design their own cars.

``They're finding these free- lancers can do it pretty quickly, and it turns out to be cheaper because it takes less time,'' John Krafcik, an auto design expert in Houston, says of the Big Three automakers. ``If I'm a chairman of one of these companies, I can either play catch-up in-house, or say let's send it out and get competitive real quick. The problem is that you lose your inside capability.''

One reason the Japanese remain ahead of US companies is that they have been geared up for rapid model changes and have learned the process over the past two decades. Now, the Japanese also have a stockpile of models - including many larger, luxury models not offered in the US.

While the weak dollar has raised the cost of lower-tier Japanese autos, Sheriff agrees with Mr. Krafcik that this will not keep luxury cars produced in Japan from flowing to the US. In fact, the Japanese have started to compete directly in the luxury car arena - Detroit's bread and butter. Both men expect a ``tidal wave'' within two years.

Lincoln and Cadillac are prestige names that command top dollar. But soon, an upscale Acura Legend (by Honda); a new luxury line - the Infiniti model line (by Nissan); and the Lexus line (by Toyota) will form a top end Japanese expansion here. European companies like BMW, Mercedes, Saab, and Volvo will also be challenged.

``They are really going to hit the American companies where it hurts,'' Sheriff says. ``US companies make a huge amount of money on large cars based mostly on old technology. They are cheap to build, and they charge a lot of money for them. But relying on them for profits makes them very vulnerable.''

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