Playboy's Automotive Report

For Domestic and European auto makers, this past summer was a wild ride. Declining new-car sales, production cutbacks and factory shutdowns led to a combined record first-quarter loss of more than two and one half billion dollars for General Motors, Ford and Chrysler. At presstime, total U.S. sales had fallen to their lowest level in eight years. European car sales were also off by double-digit figures, rocked by luxury taxes and stiff competition from the Japanese. Perhaps out of desperation, Detroit's Big Three have formally charged Toyota, Nissan and Mitsubishi with "dumping"--unfairly pricing mini-vans for the past three years. (Toyota sells a Previa-style van in Japan for about $22,000. In the States, a comparable model is priced around $14,000, which translates to a $3000 advantage after duty, taxes and finance adjustments are deducted.)

The lawsuit has been called a clever American ploy to get the Japanese to reveal their cost structure. And the entire effort could backfire if the results simply confirm that labor costs are much lower in Japan.

Beyond the headline-grabbing legal battle, both foreign and domestic auto makers hope that 1992 models will save them. But for some manufacturers, there's little to anticipate. Several 1992 models, such as Ford's Crown Victoria, Mercury's Grand Marquis and Buick's Road-master sedan, debuted early in 1991. Cadillac's 1992 Seville and Pontiac's Bonneville SSEi went on display last February. Even the Japanese have begun advancing introduction dates to help generate showroom traffic. For example, (continued on page 166)Automotive Report (continued from page 130) Toyota's 1992 Paseo and Acura's Vigor hit the streets before summer.

One 1992 car that is right on target for the calendar year is Chrysler's exciting new Dodge Viper, a Cobra-style roadster scheduled to start production in November. The .$50,000 Viper will be powered by a massive eight-liter V10 engine coupled with a six-speed gearbox. It's a welcome addition from a company that has little else to offer in 1992--except for a new Grand Cherokee in the spring--but a lot to offer in 1993, in the form of an exciting mid-sized sedan code-named LH.

When it arrives, the sorely needed LH, which will be made in two sizes under three brands, is planned for annual sales of more than 250,000 units. We've had a sneak preview of the car and it looks like a winner. Drawing heavily on last year's Eagle Optima show car, the sleek LH features a cab-forward design with a sharply raked windshield that extends radically over its hood. The result is a low, aggressive silhouette, with an enlarged passenger compartment that's a tremendous improvement over today's boxy K-cars.

Under the hood is an all-new, 3.5-liter, 220-hp, 24-valve V6 engine. Updated front struts and a new multilink independent rear suspension (similar to a BMW 850i's) provide superior handling. Eagle, Dodge and Chrysler versions of the LH will debut in September 1992.

Also give credit to Lee Iacocca for rediscovering safety. Unable to tool up for much-needed new models, Chrysler made news by fitting driver's-side air bags into its U.S.-made cars long before the Japanese realized this safety device would become popular.

Chrysler also has abandoned the traditional organizational structure popular in Detroit since the days of Henry Ford. Instead of separate teams structured according to discipline (such as manufacturing, production and styling), each of the company's new cars is now developed by a dedicated platform team, incorporating representatives from all key areas.

Not surprisingly, the Japanese have used this technique for years. The system saves time and money because developments can proceed simultaneously, and the focus is on ease of production right from the start. Chrysler president Bob Lutz comments that under this new system, "a car can go from concept approval to production in just thirty months."

Lutz is optimistic about the LH, as well as other projects in the works--such as a controversially styled full-sized pickup and a bold new small car. Even so, he admits, "We can't be all things to all people. We'll leave that to General Motors."

And what have Ford and G.M. been up to? Not much. Ford has taken a very conservative redesign approach ever since 1986, when it introduced the futuristic Taurus and Mercury Sable. The interiors of the 1992 Taurus and Sable have been extensively reworked, with dozens of detailed improvements and refinements, including an optional passenger's-side air bag and increased attention to N.V.H. (industry parlance for noise, vibration and harshness). But the restyling is very subtle. And the company is still years away from an all-new mid-sized car. Nothing signals change faster than a new-look, and Ford doesn't have it. The 1992 Taurus and Sable represent great improvements on already excellent products; but the competition is intensifying and Chrysler's all-new, dramatically styled LH is just around the corner. Even Ford's sporty and fast 220-hp Taurus SHO suffers from the same styling fate for 1992. Sure, there's an aerodynamic new nose and snappy wheels, but once again, they're too subtle. Thankfully, the SHO's balky shifter has been improved--it's better but still not great. A long-overdue four-speed automatic still won't arrive until 1993.

G.M. has similar problems: While the Oldsmobile's new Eighty Eight, Buick's LeSabre and Pontiac's Bonneville are attractive, they break little new styling or engineering ground. And G.M.'s new-for-1992 N-cars--the Achieva, the Skylark and the Grand Am--are cute and packed with features, including ABS, but still lack a driver's-side air bag.

Saturn update: slow but steady going

Things haven't been easy for Saturn. Hampered by a prolonged start-up to ensure its quality, the new make debuted in the midst of the worst sales climate in five years. Sensitive to customers' opinions, Saturn's management handled its first major recall wisely and uniquely: It replaced almost 2000 cars that had contaminated engine coolant with brand-new ones.

Because of the newcomer's prolonged development, elements of its unique styling were copied by Oldsmobile and Pontiac. Design-team head Wayne Viera insists, "We had the new look first," but he confesses that it took so long to produce the cars that other G.M. divisions borrowed several key styling features.

Wisely, G.M. insisted that Saturn have capable dealers. By midyear, they were selling cars at nearly ten percent of Honda's volume. However, Saturn's lack of a driver's-side air bag is a serious omission. Furthermore, at midsummer, its engineers were wrestling with a painting bottleneck that threatened to slow production. Although the new plant is capable of producing more than 240,000 units annually, the company will be lucky to reach half that number in 1992. All Saturn employees, executive and union, are salaried. Their bonuses are tied into unit production and quality. At this rate, most employees won't see their rewards for years.

Nevertheless, a current wave of "buy American" sentiment is helping sell Sat-urns. If the company can keep improving quality and hold off the soon-to-be-redesigned Civic (anticipated new models include a snappy convertible and a small station wagon), it will survive. The real key? The next-generation Saturn can't just be good--it has to be exceptional.

Four hot new imports to help cushion the luxury tax

Status may have been a motivator in making big-ticket purchases in the Eighties, but today car buyers have become much more practical. This change has come just in time for two relatively new auto makers, Acura and Lexus, and for two marginally older marques, Mitsubishi and Mazda.

At $30,000, the luxury-tax cutoff point has created an opportunity for cost-conscious Japanese auto makers to market complete packages at prices that are tax exempt (or subject to relatively little tax). Their target car, from a size perspective, is the BMW 5-Series. Currently, a BMW 525i retails in the $35,000-to-$37,000 range before taxes. While all four challengers can be optioned up over the luxury-tax cutoff line, they can be purchased, in hardly barebones form, for around $25,000 to $27,000.

Acura's offering is its second-generation Legend. Lexus has redesigned its Camry-based ES 250 and has named the new car the ES 300. The Mitsubishi Diamante is a new car with handsome styling that unabashedly apes the BMW 5-Se-ries. Newest of the quartet is Mazda's redesigned 929, which offers a production-car first: an optional glass moon roof incorporating a solar ventilation system. If a new 929 is parked in the hot sun, solar cells provide power to ventilation fans that exhaust heated air from the interior. In cooler weather, the cells automatically recharge the car's battery. Innovative and clever, the system has appeared previously only on show cars.

All four cars offer smooth, powerful, three-liter V6s ranging from 185 to 202 hp, compared with the BMW's 189-hp, 2.5-liter in-line six-cylinder engine. The Mazda remains a rear-drive car like the BMW, while the three others are front-wheel-drive models. All four models offer electronic automatic transmission and ABS and driver's-side air bags as standard equipment. The Legend and the 929 even boast a passenger's-side air bag. Unlike earlier Japanese mid-sized cars, whose widths were restricted by Japanese law (in order to keep car width down on Japan's narrow roads, offenders were subject to a high penalty; the rule has since been repealed), the new models are nearly six feet wide and longer than the 185.8-inch BMW.

Like every BMW, the 5-Series is a superb-handling car, so it stands to reason that the new Japanese offerings would focus on exceptional road manners. Mitsubishi's Diamante offers optional Trace Control, along with its Euro-handling package of electronically controlled suspension and traction control. Trace Control sensors measure steering-wheel position and road speed, reporting to a central engine-management computer. If the car approaches a predetermined maximum acceleration value, Trace Control acts as an invisible guidance system by reducing power to the front wheels to ensure that the driver can't corner faster than the car "thinks" it should. The Trace Control can be switched off, but with 202 horses on tap in a front-wheel-drive machine, many people will be glad to let the computer set limits for them.

Japan's ability to bring products to market in less than 36 months continues to plague competitors, who still need four to seven years to design and introduce a new model. One Japanese executive confided, "We see no reason why we can't compete in every segment, from minicars to luxury models." For Europeans, traditionally reluctant to build cars specifically for American tastes, continued market erosion is just a matter of time--unless there's a major shift in attitude.

Wheels to Watch

Cadillac and Jaguar are betting that some luxury-car buyers will survive the economic downturn. And when they do, they'll want elegant wheels.

Cadillac is counting on a bold new Eldorado Touring Coupe. Equipped with its standard GT handling package, the V8-powered Touring Coupe is surprisingly nimble.

Jaguar has restyled its venerable XJS for 1992, but you have to look closely to see the differences. Resculpted side windows, a modified roof line, updated lighting and freshened bumper treatments lend a subtle, contemporary appearance to Jaguar's aging but still attractive 12-cylinder big cat.

Ever-innovative Mitsubishi is launching a pair of diminutive people movers: the Expo and the Expo LRV (light recreation vehicle). Both are sport wagons for young families that have outgrown small sedans and want the utility of a bigger van, without the larger size and higher price. Mitsubishi will build the smaller Expo LRV for its business partner Chrysler, but it will keep the bigger Expos as an exclusive.

Acura dealers begged for what they called "the gap car," a model to fill the space between its small Integra and the recently upsized Legend. What they got was the new $23,000 Vigor, a 2.5-liter, five-cylinder sedan that's 400 pounds heavier and five inches longer than a Honda Accord and 300 pounds lighter and four inches shorter than a Legend. Although sportier, the Vigor's identity closely resembles that of the Accord and the Legend and it's bound to steal away some sales.

The new Subaru aircraft-inspired $25,000-to-$30,000 SVX touring car with mid-frame side windows packs a 230-hp, 24-valve, 3.3-liter horizontally opposed six-cylinder engine--the same cylinder configuration Porsche has used in its 911s for decades. Add to that a sophisticated torque-split, all-wheel-drive, electronic four-speed automatic transmission and you have a basic Subaru power plant taken to new heights.

Mercedes-Benz has used its 300E sedan as the basis for the new 400E, a more affordable V8-powered Lexus and Infiniti fighter. At an estimated .$55,000, the 400E isn't exactly priced as competitively as the two Japanese luxury autos, but the Benz boys are betting that a "mere" $ 15,000 difference will be acceptable to buyers who want the power, prestige and safety of a Benz.

The auto industry's sales woes can work to your advantage. If you're shopping for some of the hottest new wheels, expect to pay full slicker price, sometimes more. But if the machine you want is sitting on a dealer's lot, be assured that while the dealer (and his banker) may possess the car, they want you to own it. Drive a hard bargain.