Business: The Battle of the Little Big Cars

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This week Ford Motor Co. will show off two new 1975 models—the Granada and the Mercury Monarch—that President Lee lacocca describes as "the biggest small cars the company has ever made." That is an understatement, and it could apply as well to much of the rest of the industry. Before the year is out, all the automakers will be loosing a herd of new "small" cars, some of which will be longer and heavier than a Mercedes 280, with which Ford executives like to compare the Granada. Not especially economical, Ford's two entries this week average at best 14 miles per gal. in city driving.

Depending on the options they choose, buyers will have to pay $3,600 to $6,000 for the Granada. It will be 197.7 in. long and weigh 3,408 lbs. The Monarch will be similarly sized and priced.

Both five-passenger cars will offer what automakers think the public wants: a marriage of modest size and luxury (air conditioning, power steering).

In September, all of General Motors' divisions will bring out new small cars. Next year, a long-awaited small Cadillac will be introduced. It will be two feet shorter than a full-size Caddy, but will carry the same $10,000 price tag as an Eldorado coupe. In 1975, Chevrolet will also roll out a rotary-powered Vega with a claim that it has overcome many of the fuel-economy problems suffered by Mazda.

Early next year American Motors plans to bring out a "luxury" version of its successful Gremlin subcompact at about $4,000. Chrysler will introduce two "personal luxury cars," the Charger SE and the Cordoba. Both will carry price tags ranging from $5,500 to $6,560; in style and size, they will most closely resemble Ford's Thunderbird.

In an otherwise slow sales year, small cars continue to burn up the track, accounting for just under 50% of sales. The rise of U.S. compacts has hit imports and further hurt foreign automakers; car sales are down 20% to 30% in most European countries and in Japan, where auto workers face layoffs in spite of the Japanese tradition of lifetime employment. The U.S. is better off, but not much. This year sales of U.S.-made cars are expected to drop to 8.2 million from 9.7 million in 1973.