As General Motors goes, so in the long run goes the rest of the auto industry—but what happens in the short run can be unpredictable. Especially in the new model year about to begin. For 1977, GM is putting on an amazing shrinking act: over the past two weeks, it has unveiled a gallery of standard-size cars that on the average are nearly a foot shorter and 700 lbs. lighter than their 1976 counterparts. Ford and Chrysler by contrast are making only minor changes, and ailing American Motors is actually making its glassy Pacer longer.
So the stage is set for a bruising grille-to-grille marketing battle. Superficially, GM seems to have picked an odd year to proclaim that less is more. During the 1976 model run, consumers, who had been choosing smaller cars ever since the late 1973 Arab oil embargo, unexpectedly shifted back to the bigger models.
Will GM, by trumpeting gas-mileage savings on its smaller cars, be able to reverse the trend and add to the 47% of car sales that it won in the 1976 model year? Or will the other companies make what Ford officials call "conquest" sales to drivers who bought GM cars in the past but do not want smaller cars now? The question is complicated by price increases of almost 6%, which will raise the price of an average GM car to about $6,000—a shocking figure to the motorist who bought his last car three years ago and has been out of the market since. (Though other automakers have not yet announced their prices, they undoubtedly will follow GM by the time their new cars go on sale in October.)
The stakes in the battle are titanic. For Detroit, each percentage-point gain in an auto company's share of the market translates into some half-billion dollars in added revenues. For the national economy, whether or not the automakers achieve the record 1977 sales that GM officials are predicting could go far toward determining if the recovery, now slowing, can pick up speed again next year.
In the years beyond 1977, there is no question how the battle over car sizes will come out. Whatever their marketing analysts—or even their sales charts—might indicate, Ford, Chrysler and American Motors eventually will have to adopt GM's "downsizing" strategy in order to comply with federal law. That law, the Energy Policy and Conservation Act, requires U.S.-made autos to get an average 20 m.p.g. by 1980 and 27.5 by 1985.
Electronic Gizmo. The most obvious step was to make cars shorter and lighter. Trimmer cars can be driven by smaller engines that drink less gas per mile. Technology was also refined. Emission-control devices, always the enemies of fuel economy, were built in, not slapped on, making for more efficient engines. Ignitions were more precisely tuned. GM's Delco-Remy division developed an electronic gizmo called MISAR, which monitors driving conditions and adjusts ignition-spark timing for optimal performance (for now, only the Oldsmobile Toronado sports the device at GM, although Chrysler has installed a similar device on several models). By 1976, the GM fleet average had risen to 16.6 m.p.g. With the 1977 models it will jump 10%, to 18.3 m.p.g.