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Tightening Relationship. The U.S. has never loomed quite so large in the $13 billion European market. Through their European subsidiaries, General Motors, Ford and Chrysler now account for 29% of European car sales, up from 23% in 1962. Now they are increasing the Europeans' troubles on the other side of the Atlantic as well. The small cars to be introduced in the U.S. by Ford next year and by G.M. in 1970 will doubtless dent the $2 billion market that imports, chiefly Volkswagen, have built up among American buyers. That will force much more competition in Europe, whose auto industry is in for a brutal shakeup. Fiat's Chairman Giovanni Agnelli says that "very soon" there will be just seven major auto powers in Europe: the U.S. Big Three, plus "an English group, a German group, a French group and an international group constructed around Fiat." The present situation:
∙FRANCE remains the second biggest market in Europe (after Germany), and state-owned Renault, which has 29% of it, is still in the lead. But third-ranked (after Citroën) Peugeot is fast increasing its share, now 19%. This month Peugeot is introducing its new 504, a handsome $2,670 car designed to do battle with cheaper Citroën DS models and Renault's bulgy, year-old R-16. If the Citroën-Fiat deal goes through, Peugeot's President Pierre Dreyfus expects a "tightening" of Peugeot's relationship with Renault, which now includes cooperation in buying parts.
∙GERMANY has recovered from last year's recession, and its biggest manufacturer, Volkswagen, hopes to surpass 1966's record $2.5 billion sales and regain the European car-making lead it lost to Fiat last year. To build up European sales, VW continues to search for a successful brother to the 30-year-old beetle, which accounts for 70% of sales. This month it puts out its new 411, a medium-priced job (up to $2,381) that is VW's first four-door sedan. Volkswagen continues to share research efforts with Daimler Benz, a likely future merger partner. Ford's Taunus subsidiary is offering bigger and more expensive cars, yet remains in a deep sales slump. G.M.'s Opel has been highly successful and is enjoying strong exports to the U.S., where Opel's new "GT" model will be sold next year.
∙BRITAIN is committing what British Ford General Manager William Batty calls "industrial suicide." A rash of strikes has wiped out the competitive advantages of devaluation, holding auto exports to a meager 20% increase over last year, far from the hoped-for 35%. British Leyland Motors, formed by last year's merger of Leyland trucks and B.M.C. (Austin Healey, Jaguar, MG, Morris) began 1968 with no new models and several old ones that did not meet U.S. safety standards. Now British Motors is getting in gear. This month Jaguar is introducing its racy-looking XJG, a $5,760 luxury model designed to rev up exports.