Forum - evaluating the A and F cars

With this month’s introduction of both the A-car and the F-car from General Motors, AUTOMOTIVE FLEET presents a wide-ranging forum of lessor executives speaking symposium-style about the two new cars. Conducted at the GM “long-leads” for fleet executives almost a year ago, publication of these comments has had to be delayed because of an embargo by GM on information.

 

Participating in the discussion were Walter Freedman, the now-retired executive vice president of wheels, Inc.; John Peterson, now-retired president of Weyerhaeuser Leasing, the in-house leasing subsidiary of Weyer-haeuser Corp.; Lee Abernethy, executive vice president of Genway; Gary Tepas, president of Emkay leasing Corp.; and Doug Brown, executive vice president of Enterprise Fleets, Inc.

 

AF: Do you see using the Ciera in your fleet?

 

PETERSON: Yes, we’ve been using diesels for some time now. It fits right into our plan because this is the size of car we want to use to replace the big car. We bought full-size diesel station wagons when they first came out because we didn’t have a choice. As soon as they came out with the intermediate-size diesel wagon we went with that size. Now we have this Ciera as a choice, and most of our fleet is positioned in mid-sized cars.

 

ABERNETY: The packaging combination of the V6 diesel in the A-body, both on paper and in actual use, is the only way to go. I feel right now General Motors has to do some public relations work on building confidence in this new V6 to override the former 350 V8 diesel from 1979 to 1980.

 

In 1981, they have most of the major problems handled. They have to get that confidence level in that V6. The packaging with the V6 and the 28 mpg in the city they are talking about looks good.

 

AF: How about the car itself, even equipped with a gas engine? Do you see it being a big replacement car for fleets?

 

ABERNETHY: I think there is no question about it. It’s a fleet-sized vehicle. The question now is the timing; getting that vehicle into service versus using the G-body for the initial start-up, since we have these staggered announcement dates. I think it is going to be a juggling act. I’m not sure who would want to have a fleet with a lot of G-cars in it coming out of service in two or three years, knowing that this A-car is coming out.

 

AF: You’ve made comments about the car being an import fighter. Could you elaborate on that?

 

TEPAS: I think the problem has been not only fuel economy and pricing problems, but the quality of the American car in general as compared to the import has been a difficult one to overcome. I think that this car has some tightness of feel, and the seating is much more comfortable than existing G-cars. I think that is what the American public is looking for. A solid door when you shut it, a comfortable feeling when you sit in it and good visibility. That is what the foreign cars have been offering, 40 miles per gallon in a solid, roomy car. I think we’re headed there.

 

AF: Do you see it as a world-beater?

 

TEPAS: Well, I don’t know if it’s going to take on the world at this point. I do think that, as they move this diesel into J-cars and smaller vehicles, we are positioning ourselves where two, three or four years down the road imports will not be the only game in town for the buying public. Certainly they (imports) have filtered into fleets a little bit, but a car like this Ciera is certainly going to put the brakes on the inquisitive fleet buyer who wanted to consider foreign cars.

 

AF: Let’s go back to the X-car (Citation, etc.). When that came out, people thought it was going to beat the imports at their own game, but that logic sort of disappeared. Then the J’s came out and the same thing was said about taking on the imports. That hasn’t really worked out, either. Do you think the A’s are more of a statement in that direction?

 

TEPAS: I have some personal feelings on that. I think that while they are going to strengthen the overall American market, the X-car is going to be more like the old Nova, while the J-car, and this A-car, are going to be the chosen two. The X might be refined in a couple of areas, because there isn’t that much of a difference in size. If I were going to buy, I would go with this new A-car or the J-car.

 

BROWN: I liked the Cutlass least of all from a styling viewpoint. I guess I’m in the minority. I thought the 6000 from Pontiac was the best-looking of all the cars. My first glimpse of that car said BMW, Mercedes, which is, whether you like it or not, what people are buying or want to buy if they could. I thought the Century (from Buick) was a good-looking car. Putting aside the engine configuration, I thought the back end of the Cutlass Ciera looked like the rear end of someone’s coffin, with a big, high boxy feeling to it, especially in the coupe.

 

If we’re looking to this model run, I don’t think the car is going to have an impact. I think the impact of this whole model run, personally, is going to be minimal. It is going to be late, it is going to be expensive. Ford and Chrysler are throwing all sorts of money at everybody to move their product. There has been a lot of Ford money announced and Chrysler has announced a lot (in terms of early-order incentives, fleet purchase guarantees, etc.—ed.) and Chrysler has a decent product. Ford has some product and some problems, but they are addressing those things.

 

Then, along comes General Motors with a very expensive product and on top of that, this new “A-car” … I think they are trying to confuse us. I always knew the A was something else; now I think it’s the G. As of now (early 1981), it is not going to be price-protected, either. I don’t know how well that is understood or exactly how it is going to work, but there is (at this time) no price-protection on the A-car, so if there is a bump in price at the start of the year, everyone is going to feel it when you pass through.

 

I am just not so sure when you add all those things up, they’re going to have a very exciting introduction. I do think the public is going to take to the car. From the kind of number they (GM) are talking about being able to produce, there is no question they are going to sell out, but I don’t think it is going to play a big role in anyone’s fleet selection this year. Especially with the Cutlass. If you have a front-wheel drive Cutlass and a rear-wheel-drive  Cutlass, and if you have a big Cutlass and a little Cutlass, what is going to happen when you put all that on a selector list? I don’t know if people are going to understand all those things right up front without a tremendous amount of education.

 

We run a fair number of daily rentals, and if a person calls up and wants a Cutlass, I’m not so sure now what we are supposed to rent to him. However, I do think the product is terrific, there is no question about that. GM is out where it has to be. They have the right product that drives super and has sugar handling, but I don’t think they are import fighters. I think imports are here, and anyone who doesn’t think imports aren’t going to have their share now until we are all old and gray are crazy. Or else they haven’t been watching what has been happening with cameras, televisions, or manufacture. I like the product; I just don’t think it is going to have a big impact on the commercial business this year.

 

AF: How do you position this car in small fleet and daily rental down the road after any possible initial availability problems are resolved?

 

BROWN: I’m convinced that if gasoline stays plentiful for any length of time, Americans keep forgetting that there is a problem. While the X-car was a big deal all of a sudden, I remember us sitting around a few years ago and saying, “Gee, who’s going to drive that little shrimp car?” But now that gas is up to $1.50 a gallon, and it is readily available, I am not convinced that the American public at-large wants a little car. I think they will accept it, and if it is better, they will deal with it, so I’m not sure the X won’t have an upsurge in popularity. They have got the bugs out of it, and it did have problems when it started up. However, it is now a fine car, and we rent a lot of them, both commercially and in daily rentals.

 

I don’t know about you guys, but we have had very few problems with the X-cars in the past year. It is kind of de-bugged, it is pretty comfortable and it does what front-wheel-drive cars are supposed to do with a nice size and nice styling. I won’t be surprised if GM tries to push the X-car harder in spite of the availability of this new A-car. Everyone understands this.

 

I am thinking back to Thunderbird. Remember when Ford came out with the smaller Thunderbird, and all the top guys in the corporation would say, “My guys aren’t going to be driving Thunderbirds!” It look a while to get over that syndrome of “what is a Thunderbird?” I don’t’ know if the Bonneville plays a part in that conversation. What I see in the Bonneville is a Cutlass Supreme. A LeMans-size car, isn’t it? That car should be on someone’s list if they have Cutlasses, you know. Where is that going to fit into the scheme in 1982?

 

PETERSON: I would say the 1982 Bonneville is the LeMans.

 

BROWN: Will that be on your list (Bonneville) as a choice?

 

PETERSON: Yes.

 

BROWN: Do you have Cutlass on your list?

 

PETERSON: Yes, and LeMans, in 1981.

 

BROWN: Would you not replace it with Bonneville typically (for 1982)? Do you think that will cause any distortive factors in people’s thinking?

 

PETERSON: I don’t know. We have a problem in the fleet units with the name changes. You were absolutely right about the Thunderbird was down-sized, and was all of a sudden right for our selector list. They would say “Are you going to put all these guys in big, fancy Thunderbirds?” I told them no, that it wasn’t the car they thought. It was the name, but not the car. You’re right about it; there is a name association.

 

FREEDMAN: Don’t you think GM is being pragmatic and hedging their bets as far as these new G and A-cars creating a situation where the hedge really is if there are segments of the market really not concerned with fuel-efficient, European types of vehicles? I think there is a certain amount of uncertainty to how long the G-car will be in existence.

 

I think your comments about the A-car are true in regard to the fleet market, but it is similar to the introduction of the X-car. We had six-to eight-month lead times and incredible allocation problems, and that is part of the mystique of the car.

 

I think GM has some production and/or business problems, things they need to consider so they remain a profitable business as they make a major change in terms of product mix.

 

BROWN: Were you happy with the X-car introduction as it related to your accounts, or was it a problem?

 

FREEDMAN: Hell no, we weren’t happy. But we had to swallow it.

 

BROWN: My point is, are you going to swallow it again?

 

FREEDMAN: Absolutely. We hope we do it better. The fact is that groundswell demand for the X-car came from out of nowhere. The X-car mix in our fleet today has to be 15 or 20 percent, up from zero. We all know what happened to the full-sized B-cars, which used to be a major part of everyone’s fleet. Today, it is less than 10 percent of the fleet total. The whole thing is changing around.

 

I think GM is doing some intelligent planning, typing to straddle the fence, make use of their facilities, make sure they do not go overboard with a too European or too foreign product orientation. The foreigns have 30 percent of the market. Hopefully, with these A-cars, and the X-cars before them, that market share may diminish.

 

PETERSON: You made a comment earlier where you wanted to know whether the Ciera was a world car. I don’t see it as a world car at all. I just think it is a good fighter for the American market. I think GM has made a good move in that market. I don’t think the American market in general really likes little tiny cars. Once they get this car with the diesel engine that gets 40 miles per gallon, I don’t know why anyone would want to buy a little bitty car. This is more comfortable, it is a better automobile, and has a lot more to offer than imports. I think Americans will buy it. I don’t think Americans will buy it. I don’t think they will sell it in Europe or Japan or South Africa. It is an American car, not a world car.

 

TEPAS: At that point, too, don’t you think the foreign car buyer is going to filter down to 18 to 22 percent of the market? Americans will now have a viable alternative. The people who bough foreign cars in the past will keep buying them, and maybe a few more young people will like the foreign design.

 

PETERSON: A certain percentage will, and we are near 30 percent imports as it is now. I think with what is going on now we could get back to as low as 20 percent.

 

FREEDMAN: There has always been a percentage of foreign buyers. You take this A-car with the V6 diesel or the V6 gas engine, or the new 3 liter from Buick. If the pricing of this car is in the ballpark of other A-cars, or maybe five percent higher, the American consumer understands price value extremely well. At that point, this car matches up well against the higher lines of Toyota. I don’t know, maybe I am overenthusiastic, but I would even match it up against some of the Audi cars, because from a price/value relation, the Audi will price out higher than the A.

 

ABERNETHY: There was a comment initially about the X-car situation a few years back. I think General Motors has learned they have to keep their plants running. I think they have learned and we have also learned that they are trying to change their product offering, but it takes time.

As far as the North American market is concerned, as vehicle come out of production, they become more saleable anywhere in the world. That is where the North American manufactures have to go.

 

TEPAS: I think we really haven’t talked about Firebird as far as daily rentals or tapping into a market that we have never really had a piece of: the 280Z, RX-7, and other cars that are popular with American buyers. I think there is a good chance that the Firebird and the Camaro both will tap into some of the market that American buyers have completely drifted away from.

 

BROWN: They tease me at Pontiac. Over the years I have either driven a Corvette or a Firebird. I used to get excited about cars, and I haven’t been excited about an American car in two or three years. Seeing this F-car, I really feel good about it. It’s a personal car, but you can still put a couple or people in the back or put the rear seat down and have some carrying capacity. I think the car is absolutely sensational. It is going to make major inroads in daily rental.

 

There was a time when the argument said you could rent Camaros and Firebirds at three different prices depending on the color, but it was the cheapest car you could carry in you fleet, because the holding cost was the best. I think the F-car could return us to that. This is just a sensational, snappy car with great design.

 

TEPAS: That is definitely a market for that car, those daily rentals. I know all we look at in daily rental fleets is holding costs. I think this is going to cover the entire market for guys willing to take a two-door. He’ll be tickled to death with the that F-car. The other daily renters will want four-doors as Doug said. I think they are damn happy with the X four-doors and probably with the J-cars. However, we don’t have enough J’s yet to know about their holding costs.

 

BROWN: Put aside Corvette for a moment and look at Camaro and Firebird as GM’s performance cars. Notice where the drive is: the rear you can’t get away from the fact that, all things considered, aside from weight, certain efficiencies and maybe snow use, you still get the best performance out of a rear-wheel-drive car.

 

I used to race cars and know that a rear-wheel-drive car is the best performing vehicle, best opportunity for proper ratios and weight distribution, as well as balance, comfort and drive-ability. It seems like GM was willing to sacrifice one or two miles per gallon to still get the performance of rear-wheel drive.

 

TEPAS: I think it means they realize there is a segment of the market that wants that kind of car. They’re not going to blow those people out in their changeover to front-wheel drive.

 

BROWN: That makes me wonder about Cadillac. I wonder why they went with the J instead of waiting for the new A for their Cimarron. Why didn’t they wait and have a bigger platform for their car? I looked at the Cimarron today and in my opinion it was a beautiful car, but it wasn’t a Cadillac.

 

TEPAS: Maybe it means Cadillac will stay with the big, rear-wheel-drive cars for some time to come.

BROWN: I think they have decided that if they want a car with comfort and performance, the DeVille series will stay with us and go to the new G-car platform (108.1-inch wheelbase). The G-car could wind up being the Olds 98, the Electra 225 and the Cadillac of the future. That would give you rear-wheel drive, comfort and handling.

 

PETERSON: Weren’t you all surprised when Cadillac went to the J-car and not the X when they down-sized?

 

BROWN: Not so much the X as the new A-car.

 

PETERSON: They took the J before the new A was available. I thought they certainly would go to the X-body. I never anticipated Cadillac would go that far down the line. Now that they are down they are talking about stretching it and doing other things with it. They could do more with the X-car if they want to play around with a front-wheel-drive car.

 

BROWN: It may tell you something important. It may tell you one division is going away. It is a question of whose division, and when.

 

All of a sudden you get Cadillac coming down in size, and Pontiac losing their full-size entry. The group becomes so homogenous you have to wonder if a division goes away at some point. It may become a three-or four-division company in ten or 20 years. I see Cadillac having that small an entry as an indication of their ability to bridge the gap as time goes on.

 

AF: The specs for the A-car are almost on a par with the X-car. Taking it all into account, were you surprised with what you saw today in terms of the new A-car?

 

BROWN: Taking into account that they had their first chance with the X-car, they are going to do it better. They are not going to guarantee prices and deliver cars 15 months down the road at a price they quoted too early. They are going to have their pricing in line with what their production costs are going to be. It (the A-car) should be a better car than the X. I think it is appointed more nicely. I like the car.

 

TEPAS: We were told about and shown a pretty fancy standard interior. If it is standard, it beats the X in comfort because the seat design is totally different. This car proves that you can do an awful lot of work with exterior panels to make a car look different and give it a different feel as far as the American public is concerned. American manufacturers have learned to do that in the past ten or 20 years.

 

I am very happy with the car and I think they are trying to position themselves with a little something for everyone, not losing any buyers. Ford and Chrysler have to do something along the same lines or they will be in trouble. They have got to be able to compete in all the car lines that the American public wants.

 

ABERNETHY: The A is built on the same platform as the X and you still have to squeeze to get in there. Everything is squeezed into all these cars, the A, F and X. Something has to give. It is just too bad they couldn’t have brought out the A first instead of the X.

TEPAS: A couple of inches of wheelbase difference, or even an inch, and you can vary your length and exterior panels substantially.

 

AF: They position the X as a compact and the A as a mid-size. Is the A-car really filling that niche?

 

ABERNETHY: Under insurance company standards it is.

 

PETERSON: If GM wants to call it a mid-size car, then it is one, as far as the general public is concerned. When Chrysler came out with the Cordoba and a similar Dodge line car, they sold twice as many Chryslers as Dodges. They were identical cars in every respect, but buyers could say “Now I own a Chrysler.” They did not look at the inches or the differences, just the name. It was the same thing with the Thunderbird. Name-association helped to sell that car, which I thought was a disaster when I first saw It down-sized.

 

So if GM says this is an intermediate car, then believe me, it is an intermediate car. It I have a drive out there who is going to be happy because I can give him a car with one-tenth of an inch more wheelbase, then I’ll give it to him, providing it doesn’t cost too much more. To be perfectly honest, I think the public is easily brainwashed by the automobile business.

 

FREEDMAN: I don’t think wheel-base is really the question on this car. It is an entirely different vehicle (from the X) because of proportion, the way it appears, and the way it feels. It has appointments, a certain kind of feeling to it. The X is a heck of a good car, but it could be termed a typical American car turned into front-wheel drive.

 

This A-car seems to be a whole new kind of vehicle that they haven’t made before. It is hard to describe, but I think it goes beyond what American manufacturers have done until this time. I think it is an offering which is going to bring back some domestic market share because it is going to price out competitively with the imports. I think Americans want to buy an American car. I don’t think it is a question so much of name tags as it is a whole different type of vehicle. And even though it isn’t much larger than the X, it does seem that way in terms of overall feel.

 

BROWN: I don’t think the compact, mix-size standard relates to this situation. You know that with BMW’s and the rest of them, no one says, “What size is that car?” They don’t give a damn. It is level of appointment, driveability, and the fact you can sit four people comfortably.

 

I’d love to see the import’s share reduced as an American, but as a realist, I know they build a damn fine product overseas. We don’t use them in the fleet business for all sorts of reasons. It could be color choice, pricing controls, or timing of deliveries. It might be their inability to deal with the fleet business. I don’t think anyone in this room would say they don’t use imports because they are not of good quality. They’re not going to go away, and now we seem to be matching their quality.

 

FREEDMAN: I don’t think it is a question of the imports “going away,” as you put it. It is a question of arresting a trend and turning it in the other direction. If imports have 30 percent now, it is a giant step if they can be reduced to 25 or 24 percent. The momentum developed not long ago. They had 25 percent and it wasn’t long before they had 28 and it is still creeping up.

 

I think with this A-car you’re not going to knock the imports out, but they’ll get a run for their money. The imported cars are darn good. That is how they got where they are.

 

TEPAS:  I am they are going to do something to compete, too knowing Americans are building larger, somewhat nicer cars. You can already see that trend as imported cars are getting a bit larger now.

 

I think the key to the whole thing is quality. People buy the foreign cars because of the quality when you shut the door or close the trunk. This new A-car…close the trunk or the door and you get that same solid feeling. The A-car has a more solid fit and finish than previous offerings, and these are the things that impress the American people. I just think these new cars have more quality built into them.