Detroit's large cars, the ugly ducklings of the U.S. auto fleet, are selling surprisingly well in this fall's depressed economy despite their size, gasoline appetite and old-style, rear-wheel-drive engines.
According to the script adopted by most of the industry, large cars such as Chrysler New Yorkers, Olds 88s and Ford Grenadas were doomed, headed for sure replacement over the next few years by waves of smaller, newly designed cars with modern, front-wheel-drive technology.
Instead, they have won a reprieve.
Chrysler Corp.'s compacts remain its best selling models by far, but its hottest car is the intermediate-sized New Yorker, with a waiting list of would-be buyers. In September, sales of General Motors Corp. midsized cars reached their highest levels of the year, partially offsetting declines in smaller models. And demand for many full-sized GM and Ford models is substantially higher now than at the beginning of the year.
At the same time, GM has had to cut production of its front-wheel-drive J-cars, introduced last May, because of disappointing sales.
The switch is even more apparent in the used-car market, perhaps the purest barometer of auto demand because of the absence of rebates and strategic pricing. In October, the average auction price of large cars nationwide was up 5 percent from September, while the small-car average price dropped 1 percent. Since October 1980, large used-car prices have risen 28 percent, compared with 16 percent for small cars.
The question for Detroit now is whether it has oversold the appeal of the smaller front-wheel-drive cars, to itself and the public.
Solid conclusions about car buyers' tastes may be impossible to draw these days, with auto sales at their lowest point in 23 years. But auto experts and industry officials make these points about the recent coolness toward smaller front-wheel-drive cars and the revival of interest in the old gas guzzlers:
Believing that the public had fallen in love with front-wheel-drive cars, Detroit pushed prices on these models to the limit while holding back increases on larger, rear-wheel-drive cars. GM's new front-wheel-drive Cavalier CL4 station wagon has a base sticker price of $8,492. For $200 less, a motorist can buy the substantially larger Caprice wagon.
"Fully loaded big cars don't cost any more than the new fully loaded little cars," said Maryann Keller, an auto analyst with Paine, Webber, Mitchell, Hutchins. "Consumers are deciding there is more value in the larger cars."
Many buyers have apparently concluded that front-wheel drive isn't essential in a new car.
This design, which got its big push in 1979 with the introduction of General Motors' X-cars, transmits engine power directly to the front wheels by a complex transmission-axle combination, rather than to the rear wheels through a long drive shaft--the customary way for most of this century.
Detroit has spent millions of advertising dollars to persuade the public that front-wheel drive is much more than a better way of powering a car. The Chevrolet Citation and Cavalier, Ford Escort, the Dodge Aries and their front-powered cousins were Detroit's answer to the small, fuel-efficient Japanense imports, and front-wheel-drive was a key factor, reducing vehicle weight without cramping occupants, the industry said.
And beyond that, the front-wheel cars represented the restoration of American auto technology after a painful battering by the Japanese, the industry told consumers.
The transition to this technology still continues, but not as fast as GM and many industry analysts had figured initially. The conventional rear-wheel-drive cars "will be around a little longer," says GM vice chairman Howard H. Kehrl.
"At current prices, people aren't as willing to pay for the privilege of front-wheel-drive," said analyst Keller.
In today's economy, consumers are checking prices much more closely than the miles-per-gallon ratings, Kehrl says. GM's X-cars were introduced in 1979 in the midst of the Iranian revolution and gasoline lines that assured their initial success, said Kehrl. The stable gasoline prices of the past year have apparently eased that concern on the part of consumers.
GM--facing a crunching cash squeeze--has had to slow its massive program for converting its lineup to front-wheel-drive by the mid-1980s. The company has delayed the retooling of some plants by a year and has canceled renovation plans at several others.
Although GM won't confirm it, industry analysts believe it has given up plans to replace full-sized Olds and Buick models with front-wheel-drive models, once scheduled for 1983.
"We've stretched out some of our programs," says GM's Kehrl. "Maybe we were pushing the throttle too hard.
"We aren't exactly loaded with money," he adds.
Is the industry rethinking its commitment to front-wheel-drive cars? The answer is no, Kehrl insists, despite the announcements of plant closings and construction delays.
"Clearly, front-wheel-drive has been oversold," a spokesman for Ford said. Ford, with less money to spend than GM, had not plunged as deeply into front-wheel-drive conversion for its mid- and large-sized cars. And the recent revival of interest in the larger, rear-drive cars is something of a vindication.
Ford notes that major front-wheel-drive components are more expensive to build than comparable rear-wheel-drive units. Other critics warn that the precise engineering required in the front-wheel-drive components make these cars more expensive to repair, and Detroit will have to make good on its quality campaign to avoid a consumer backlash on service charges in the years ahead.
Ford feels more comfortable today about sticking with its older, rear-wheel-drive designs and "isn't going to throw away perfectly good engines or transmissions just because of a fad," the spokesman said.
But when it comes time for Ford to replace its intermediate compact Fairmont and Zephyr models, three years from now, they will be switched to front-wheel-drive, Ford officials indicate.
And Kehrl of GM emphasizes that Detroit isn't going to make the same mistake it made in 1975, when the memory of gasoline lines and escalating fuel prices faded and consumers began to demand large cars again. At that point, the U.S. automakers turned their backs on small, fuel-efficient compacts, leaving the door open to the Japanese--and they streamed through it when gasoline prices took off again in 1979.
"There's no question, fuel efficiency isn't the essential it was a year ago," Kehrl says. "The price of the car is much more important." But GM is looking ahead four to five years, he added, and long-term, it remains essential to shrink the size and weight of all its cars. Front-wheel-drive is more expensive, but it is also lighter and more compact, he notes, and GM is staying with it.
The next year will indicate whether GM and its competitors can continue to charge premium prices for the smaller, front-wheel-drive cars, however. As cars shrink in size, Detroit's marketing goal is to find ways to differentiate their models and make them special, to justify maximum prices, said Keller. As long as buyers remain severely price conscious, that strategy is in jeopardy. Picture and Chart, Large Cars Get A Push: Percentage of Sales of U.S.-Built Cars, By Gail McCrory -- The Washington Post