eneral Motors Corp., the nation's largest automaker, appears to have outfoxed its domestic competitors in the small-car war with the agreement announced this week to produce cars in the United States with Toyota Motor Corp.
The agreement will give GM an annual lot of 200,000 new cars to take to market--an addition to another 350,000 small cars GM is getting from two other Japanese partners, Isuzu and Suzuki, beginning in 1984.
GM last year produced 287,932 T cars--Chevrolet Chevettes and Pontiac 1000s--the company's smallest passenger models.
GM insists that it will continue building T cars, despite its production agreement with Toyota and its import arrangements with Isuzu and Suzuki. That means GM conceivably could have an annual supply of about 700,000 small cars to sell by 1985--a supply position that is enhanced by minimum production costs, some auto industry analysts say.
"GM's whole intention is to increase the size, and its own share of the domestic small-car market," said Maryann Keller, an analyst with New York-based Paine Webber Mitchell Hutchins Inc. "GM is going to offer a very wide range of small cars because it wants to become the dominant force in the domestic small car market."
Therein lies the rub.
Small cars, generally compacts and subcompacts, accounted for 63 1/2 percent of car sales in the United States last year. Imports made up 43.9 percent of the U.S. small-car market in 1982; of that amount, Japanese imports accounted for 35.6 percent of the small cars sold in this country.
In their quest for new products to compete more effectively in the small-car market, all four domestic automakers have sought foreign allies--largely because the foreigners, particularly the Japanese, could produce the cars cheaper and faster.
Ford Motor Co., for example, tried and failed last year to get a joint-production agreement with Toyota. Chrysler Corp., after eight years of trying to win a similar pact with Japan's Mitsubishi Motors, finally gave up those efforts this year.
American Motors Corp. joined forces with French automaker Renault--a union that gave AMC its hot-selling, front-wheel-drive 1983 Alliance. But in the process, AMC surrendered an estimated 46 percent interest in its operations to Renault, an action that started an industry guessing game about how much time will pass before Renault takes complete control of its partner.
GM apparently has avoided all such encumbrances in its agreement with Toyota. Both companies have an equal share in the yet-to-be-named new company created here. And according to some industry estimates, GM is expected to save $1 billion in costs in the joint production of its new car. By comparison, Ford Motor Co. has had to spend more than $2 billion to come out with its new sub-compact, front-wheel-drive Tempo and Topaz models that debut this year. Chrysler Corp. is in the midst of a multi-billion-dollar program to develop more small, front-wheel-drive cars by 1987.
The difference is that the GM-Toyota agreement involves shared risk, but if the GM-Toyota car does not fare well, GM would not lose much, industry analysts say. Ford and Chrysler have no such cushion if their new, small-car products fail.
As a result, some industry analysts suggest that the concerns of GM competitors about possible antitrust violations in the GM-Toyota agreement basically stem from corporate jealousy.