Word: detroits
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Dates: during 1970-1979
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...continued surge has surprised even Detroit's inveterate optimists. Late last year, when the industry was just beginning to grope its way out of its worst slump since the 1930s, General Motors Chairman Thomas Murphy guessed that 1976 sales, including imports, might rise to 10,250,000 cars. Since then, he has raised his forecast to "at least 10,500,000." Other auto executives foresee sales of 10,600,000 this year. Either prediction would place 1976 far above 1975's dismal sales of 8,600,000 and make this year the industry's third best ever...
Bourke's Law. While a sales rebound some day was inevitable-car purchase can be postponed, but not forever-the shape as well as the strength of the comeback has caught Detroit off guard. The main reason for the upswing seems to be that buyers are shedding their recession-bred fear of spending. Now that the inflation rate is dropping (see box) and "real" incomes are rising, Americans are reverting to an old habit. As Ford Executive Vice President William Bourke puts it, "They often buy 'as much car' as their budgets allow, and 1976 budgets allow...
Bourke's law explains the big surprise of 1976: the sales flop of the once-vaunted subcompacts. Detroit invested heavily in these small, $2,900-to-$3,400 cars as an answer to the import threat. Imports have indeed been suffering this year; their share of the U.S. auto market, more than 18% last year, has skidded below 14% so far in 1976. But the foreign makes have been hurt more by their own rising price tags than by any bumper-to-bumper competition from their U.S. rivals. American subcompacts, which captured 10% of the U.S. auto market following...
Despite the poor showing of the subcompacts, Detroit must steadily trim car size and weight if it is to meet a congressionally imposed gas economy standard of 27.5 miles per gallon by 1985 (v. an average of 17.6 m.p.g. for the 1976s). GM plans to introduce smaller, more fuel-efficient versions of its heavy standard-sized models this fall. Chrysler is currently offering a Japanese-made sub-compact called the Plymouth Arrow and intends to produce its own domestically built subcompact next year. Whether or not American motorists can ever learn to love them, smaller cars appear to be firmly...
...ahead of 1975. Pacing the boom is the dramatic pickup in auto sales, which are now racing at an annual rate of 9.2 million and show every sign of outdistancing even the most optimistic projections, to hit 10.6 million for the year, v. 8.2 million in 1975. Last week Detroit reported that auto sales for the ten days ending May 20 were up an impressive 53% over last year, to 310,800 cars...