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Prestige buying still helps the sale of small foreign cars. Foreign-car purchasers often give lower operating costs as the reason for buying. But Detroit surveys show that most foreign-car buyers have higher incomes than the national average, could afford to buy a bigger U.S. car. Says Ronald Saracco, sales manager of Manhattan's Fine Cars Inc.: "A sort of reverse appeal has now given more prestige to the small foreign car." While all U.S. car sales are down about 25% this year, sales of small foreign cars reached 200,000 last year, a gain of 110% over 1956, and they are expected to continue rising in 1958. Detroit automakers do not believe that there is a big U.S. market for small cars, consider their popularity a fad that is about at its peak. Some foreign-car dealers agree. Says Albert E. Birt, president of Manhattan's Hambro Automotive Corp., which sold 24,000 British cars in the U.S. last year: "The imported-car market might increase to 300,000, but I can't believe it will go beyond that."
Does the popularity of foreign cars, plus the upgrading of Ford, Chevrolet and Plymouth, leave an opening for a U.S.-made small car? Automakers say that the potential market would have to reach at least 500,000 before they would consider producing one. They have solid evidence that a small U.S. car would cost little less than present low-priced U.S. models, since the cost of labor, advertising and marketing would be the same. They also point out that the U.S. buyer can already buy a low-priced U.S. model with no accessories for only a little more than a foreign car.
For such reasons, the small-car boom worries Detroit less than the decline of the middle-priced car. Since its beginning, the U.S. auto industry has narrowed from more than 2,000 different automobiles to 17 makes turned out by five major companies that produce 96% of all cars sold in the U.S. In the future, many of the overlapping models produced by the big five may also disappear.