Get more with myNEWS
A personalised news feed of stories that matter to you
Learn more

US car giants wake from their slumber


AFTER 15 years in the doldrums, the American car industry is showing signs of re-awakening.

The Honda Accord has been ousted from its position as America's best-selling car by the locally made Ford Taurus, and, though mired in debt, the American car industry is once more a force to be reckoned with.

The Japanese share of the US car market has fallen from 30 per cent in 1991 and 1992, to 27 per cent in the first two months of 1993.

The big three American car makers, General Motors, Ford and Chrysler, increased their market share to 68 per cent.

Honda representatives have pointed out the Accord is nearing the end of its model life and the new version is expected to attract stronger sales.

But industry observers feel the turn-around is part of a deeper movement which favours the American car builders.

The strength of the yen has made it difficult for the Japanese to maintain the competitive pricing that carved such a deep bite into the US market for the imported cars.

The Japanese have priced aggressively and tried to prevent the rise of the yen pushing up the cost of Japanese cars for US consumers.

But some Japanese cars now cost US$2,500 more than similar US products.

The Ford Taurus GL, priced at US$18,902, undercuts the similarly equipped Toyota Camry LE at US$21,433 or $2,531.

For the first time, the American car makers are approaching the Japanese standards of ''build quality''.

According to J. D. Power and Associates, a California consulting firm, the average American car now has 1.4 defects, while the average Japanese car has one.

In 1980, American cars had an average of six more defects than their Japanese counterparts.

The gap is still measurable, but American consumers are no longer so keen to pay the premium for the Japanese product.

And the American car builders are now offering their domestic customers exciting products.

Chrysler is one example of the industry's rejuvenation.

In 1990, the company was sliding fast with plummeting sales and a record low credit rating.

Corporate raider Mr Kirk Kerkorian launched an unsuccessful takeover bid when the firm lost US$725 million in 1991 and about US$4.4 billion was outstanding on the firm's pension plans.

Chrysler was forced to show its new designs ahead of time to establish credibility and these designs, part of a US$16-billion investment programme, have re-established the firm as an innovative and exciting car maker.

The Viper sports car, with its V-10 engine and released under the Dodge label, has proved a huge success and some of its glamour has rubbed off on to the company's more mundane products.

A new range of show cars has electrified the company and put the name Chrysler into the spotlight.

The Prowler, given the previously sleepy Plymouth brand name, is so outrageous, yet relevant to the tradition of American car culture, that it has caused a stir even in the mainstream media.

The Prowler looks like an American hot rod, the sports racing car that was born on the dry lakes and is close to the heart of an American generation.

The 240-brake-horsepower V-6 engine, four-speed transaxle, independent suspension and brakes are all sourced from existing models.

According to design chief Mr Tom Gale, the car could be built with a volume as low as 3,000 cars.

The Chrysler Thunderbolt is another stunning cocktail of existing stock parts and brave styling.

The car is a feasible production vehicle but for the lack of a suitable V-8 engine.

Chrysler is too low on funds to develop the 4.0-litre engine intended for the Thunderbolt.

The hurdles facing Chrysler in its fight to regain solvency and win a larger share of its own domestic market are huge.

But the company is viewing the future with a new sense of confidence and optimism.