Small Cars Can Sell The trick is in the product, not the price

I hear General Motors is considering moving production of the Chevy Cavalier to Mexico (bye-bye Lordstown). GM admits it is studying the idea, but so far has made no decision. Cheaper Mexican labor is supposed to mean lower cost. Heck, they might even make a profit on Cavalier and Pontiac Sunfire.

The real problem that ails the small-car market goes beyond the UAW and $1-a-gallon gasoline. American consumers have lost their appetite for small cars because they are just not very attractive.

First, I just put in about 400 miles (640 km) in a Korean Daewoo (pronounced, they tell me, as DAY-OU, no "w"). It's not on sale yet, but the Koreans say it will come this year. This was the Lanos model, small hatchback, 105 hp, 160 ins. (400 cm) long.

Actually, it was a good performer, quick, comfortable, handled well. This model was loaded: CD, sunroof, automatic. There's no price on them yet, but Daewoo says they'll sticker between $9,000 and $12,000. Since this was the loaded model, I figure it's nearer $12,000.

Nice car. Nice price. It just won't sell.

You see, I can buy a just-off-lease Taurus for around $12,000, and it's just a lot more car. My son was offered a Volvo 850 just off a three-year lease for $15,000. These cars are a few years old, sure, but what would you rather have, a two-year-old Taurus, a new Daewoo Lanos or that three-year-old Volvo 850? The lease turnarounds, plus the general improvement in car quality and the extended warranties, have changed the market.

Which is why carmakers have trouble selling their low-priced cars: General Motors' Cavalier, Ford's Escort, Chrysler's Neon, Toyota's Corolla, Nissan's Sentra, Mitsubishi's Mirage. Which of these cars has a real personality? Are desirable? Are cute? Chrysler tried to be cute with the Neon, but didn't quite get there.

People who once bought these cars now may buy bigger off-lease vehicles. The carmakers can't just give up on these small cars (although Toyota is quitting on the Tercel) because they are stingy on fuel and help the companies meet the government's fuel economy rules.

But not all smaller cars have sales problems. Look at Honda's Civic, the new Volkswagen Beetle and, not too long ago, Saturn. The Civic sells on quality, the new Beetle sells on style and Saturn sold on dealer service before GM's lack of investment left the car itself dated.

Each of the cars sold for top dollar, thousands of dollars more per car than for other small cars.

The point: Small cars can sell, if they have something special. If they are desirable.

Something else: Even when carmakers try to enliven design, it's usually the exteriors they play with; interiors are left alone. Yet how many of you stand outside your car and stare at it for an hour. No one does that. We spend all our time inside our cars. That's where exciting design could make a difference.

Get in a New Beetle. It's actually fun to be inside this car.

Most interiors are done in what I call "Teutonic minimalism." Plain gray vinyl dash, black buttons, seats and side panels in mud brown or mouse gray. B-O-R-I-N-G. No chrome, no color.

When I was a boy, the red cars had red interiors, the blue cars had blue interiors, the green ones were green inside. They tell me that all this was eliminated to save money. But with computers running the show, I doubt that's true. And remember how great the dash was, all that color and chrome? Example: Toyota is bringing out its new Solara coupe. The sheet metal is new and neat. But the interior is the old Camry interior. Toyota was saving money. Coupes have been a tough sell in America and Toyota wants to get folks excited with the Solara. But it's hard to get excited about that plain interior.

To be sure, sometimes dramatic design doesn't work.

Remember GM's Dustbuster minivan? But the problem wasn't that the design didn't work. Anyone can go wrong; that's no sin. The problem was that GM didn't correct that long nose and wide dash top for years.

If cars are designed as commodities, and sold as commodities, then no price will be too low. Cheap labor won't help.

But great design, great quality, great performance and great dealer service will ignite passion, yes, even for small cars. People will pay more for what they really want.