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More surprising than sales to the car-minded U.S. is the growing export competition within Europe itself. Italy's biggest customer is not the U.S. but Germany, where Fiat's tiny, inexpensive (around $1,000) 600 series has jumped into fourth spot in sales, seventh place last year. Competition is so intense that Fiat recently chopped prices from 2% to 15% clear across the board on its passenger and commercial line. Not to be outdone, Volkswagen lopped $300 (to $1,750) off its de luxe sedan. But the cut was for the Italian market only.
Beyond Europe and the U.S., small-car makers are learning to tap markets in developing nations around the world where economy is more important than power or size. Foreign cars account for 41% of Puerto Rico's car imports. German cars jumped from 14,000 to 22,000 in the first six months of this year in South Africa, from 7,700 to 13,000 in Australia. Tiny Kuwait has bought 1,100 German autos.
Even Japan is hustling to get into the race. Though the industry produced only 42,597 passenger cars last year, automakers plan big things. Toyota Motor Co., which makes a sturdy Toyopet sedan (30 miles per gal.) for $2,222, has shipped 800 cars so far this year, including 150 to Hawaii. Japan's other major producer, Nissan Motor Co., with a smaller Datsun sedan (40 miles per gal.) for $1,762, has sent out another 800 to Hawaii and the West Coast. The reception was so enthusiastic that the two companies see a U.S. market of 500 cars a month next year.