AUTOS: The Small Inherit a Shrunken Market

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Car sales figures for early 1974 have made official a historic shift in the public's automotive tastes: for the first time in memory, standard-sized Chevrolets and Fords are no longer outselling every other make of car. They have finally lost their lead to the Chevy Vega and Nova, the Ford Pinto, the American Motors Gremlin and the Dodge Dart.

Through January and the first ten days of February, compact and subcompact cars as a group (including imports) captured more than half the market for the first time—53%, to be exact.

The trouble, from the industry's point of view, is that energy-conscious motorists are switching to buying small cars much faster than the automakers can convert their plants to turn out more of the gas-saving little autos. Standard-sized cars are still piling up, unsold, on dealer lots. The industry now has about a 75-day supply of unsold cars, mostly big ones. Since big-car sales have gone down even faster than small-car sales have risen, total auto volume so far in 1974 has dropped 25% below last year's pace. General Motors' total car sales are down 36%, Ford's 21%, Chrysler's 20%.

Only American Motors Corp., which put its sales and production emphasis behind small cars earlier than its giant rivals, is benefiting financially from the trend so far. AMC's car sales for the year to date are running 21% ahead of a year earlier, and last week the company declared a "semiannual" dividend of 100 a share, its first payout to stockholders in nine years.

Auto executives profess to see some hope in the latest sales figures. The 25% drop in total volume in the first ten days of February, they note, was no worse than the decline in January, so at least the sales slump is no longer getting deeper with every report. That seems a rather frail reed on which to base any optimism, and auto dealers put little trust in it. At the National Automobile Dealers Association convention in Las Vegas two weeks ago, John S. Hinckley, an Ogden, Utah, Dodge dealer and NADA president, assailed contradictory statements by Government leaders and oil executives about the severity of fuel shortages. The widespread public confusion created by these statements, he said, "can very easily drive this nation into a massive depression." Hinckley even hinted at a conspiracy theory to explain the dramatic switch to small cars. He called mysteriously for "leadership to put a leash on some politicians and bureaucrats who would use the energy crisis to achieve poorly conceived social and economic goals—such as creating a small-car society overnight."

New Models. If there is a conspiracy, the automakers are rushing to join it: as they once competed to turn out bigger and more powerful cars, so they are now racing to beat each other to the market with new small makes. General Motors disclosed last week that it is considering bringing out new small cars in all its divisions: Chevrolet, Buick, Oldsmobile, Pontiac, even Cadillac. GM had hoped to have a Chevy Vega equipped with a Wankel rotary engine ready for unveiling in September, but experimental models have consumed too much gas, so introduction has been put off until mid-1975.