THE 1988 Merkur XR4Ti is proof that excellence can go unrewarded. It's a splendid car, a real runner. It's also one of the most snubbed machines in the U.S. auto market.

If new car showrooms were dance halls, the XR4Ti would be the ultimate wallflower. And that's too bad, because it knows how to boogie.

The XR4Ti is a two-door, rear-wheel-drive sports hatchback produced by Ford of Germany. It's been a poor seller since its introduction in the United States as a 1985 model.

Back then, Ford's people were talking about annual sales of 20,000 XR4Tis. They never came close.

There are theories aplenty for this lackluster performance. One is that Ford initially misjudged the market by bringing in too many XR4Ti cars with five-speed manual transmissions. There may be some truth in this.

Ford might've fallen victim to throttle- jockey hype, the misbegotten notion that young and sporty buyers want cars that demand driving skills. Most of 'em want no such thing.

Folks who grew up on fast food and instant happiness want it easy. Ford's now giving 'em optional three-speed automatics.

Ford also could've tripped over the doctrine of perennial adolescence. This is tricky. The doctrine says that lots of folks don't want to grow up and that they'll latch onto anything -- such as the wild, rear biplane spoilers fitted upon earlier XR4Tis -- to show their rebellion.

The trouble is the doctrine's random factor: guilt. Perennial adolescents zapped by guilt shy away from obvious displays of adolescence. For these people, a single-plane rear spoiler -- now available on the XR4Ti -- will do fine.

Finally, there is the theory of Demon Status. This is easy. The demon devours common sense. For example, people will refuse to buy a thoroughly competitive car for thousands of dollars less if it doesn't come with the right symbol.

Hmmmm. Perhaps, in the case of the XR4Ti, Ford needs to enter a joint venture with Porsche, Mercedes-Benz, or B . . . Ah, forget it.

Complaints: Like most rear-wheel-drive sports cars, the XR4Ti is a pain in the snow. But it's not an unbearable pain. It gets there with caution.

Praise: Truly fine craftsmanship. The car is quite snug. No rattles. No silly noises. It seats four adults comfortably.

Head-turning-quotient: Amusing grace.

Ride, acceleration, handling: Superior in all three categories for normal drivers, excellent for the wilder sort. The automatic-gear test car is powered by a 2.3-liter, turbocharged, four-cylinder, electronically fuel-injected engine rated at 145 hp at 4,400 rpm.

When linked to the standard five-speed manual gearbox, the engine is rated at 175 hp at 5,000 rpm.

Sound system: AM/FM stereo radio and cassette with Dolby sound, four speakers. Very good.

Mileage: An unimpressive 18 to the gallon (15-gallon tank, estimated 260-mile range on usable volume), combined city-highway, running mostly driver-only.

Price: $20,408, including $1,201 in options and a $142 transportation charge. Base price is $19,065, and dealer's invoice price without options is $16,966.

Purse-strings note: You can deal on this one. In fact, some dealers might have similarly equipped 1987 models in stock, which can be had at an even lower price.

Warren Brown covers the automotive industry for The Washington Post.