The new, front-wheel-drive cars that carry Detroit's hopes of recovery seem to be passing their first test so far, stirring up some badly needed curiosity among potential customers.
But if consumers are impressed by the new cars' features, they will certainly be impressed by the prices. The small, efficient cars have become the key to the profitability of Chrysler Corp., Ford Motor Co. and General Motors Corp., and Detroit's bet-the-company gamble is that the new cars can be priced high enough to revive earnings without scaring off the customers.
At first blush, the gamble appears to be working. Chrysler Corp. said traffic through its showrooms last weekend was twice the volume a year ago, and people were not just looking. The company boasted that the first-day sales of its Dodge Aries and Plymouth Reliant on Thursday beat anything in the company's history.
Ford said it too set first-day records last week, thanks to the curiosity over its new Escort subcompact, although the company did not disclose sales figures. "It's like the Mustang in 1965," said Robert A. Lusko, district sales manager for Ford here. "People are coming in, slamming the doors, looking at the wheels. We haven't had that excitement with a car in a long time."
But the automakers will have to wait until Thanksgiving to know whether the 1981 models are winners or not, company executives agree. While the new cars represent a vast improvement over the models they replace, the improvements don't come cheap.
The manufacturer's suggested base price for a stripped-down Dodge Aspen a year ago was $4,730. It has been replaced by the Dodge Aries, a front-wheel-drive K-car that is lighter and far more economical than the Aspen and built with a considerably greater emphasis on qualtiy. A two-door coupe with manual transmission and no frills is $5,880, an increase of 24 percent.
A Ford Pinto could have been bought a year ago for well under $5,000. A Ford Escort carries a suggested base price range of $5,158 to $6,576, and -- with the kinds of extras that many American motorists are accustomed to -- the price can jump to $7,800.
There is no comparison between the new Escort, rated at 44 miles-per-gallon on the highway, and the 10-year-old Pinto, designed for a time when gasoline was 30 cents a gallon, says David N. McCammon, Ford's vice president for corporate strategy and analysis.
The price increases on the smaller 1981 models are not merely due to the improvements, however. The fact is that small cars have taken the place of the full-sized "family" cars as the breadwinners for Detroit.
Consider the Chevrolet Citation, the most popular version of the GM front-wheel-drive line. A year ago, a stripped-down Citation hatchback carried a suggested base price of $5,032. The same model today has a suggested base price of $6,270, a 24 percent increase. The price increase for the larger cars will be substantially less.
In the subcompact field, the traditional price leader has been Toyota, and the pricing decisions by the leading Japanese importer will be critical to the fortunes of Ford and Chrysler. A modest price increase by Toyota would enable it to keep or even expand its market share at the expense of American competitors; a larger boost presumably would dampen Toyota's sales and its profits.
Price comparisons between Toyota and its American competitors on 1981 models are still elusive because the 1981 Toyota models have just begun arriving at dealer showrooms.
Ford this week illustrated how sharp the price competition is at the subcompact level when it announced the second price increase on most of its 1981 cars, keeping itself in step with GM, which also has raised 1981 model prices twice since September.
There was no increase on the Escort and Lynx models.
In Chrysler's case, particularly, the prices on the new K cars must be as high as the market will bear if the No. 3 automaker is to survive, according to Treasury Department analysts.