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Lessors Look Ahead to 1981 Model Year & Beyond

Enterprise, McCullagh & Hertz see smaller, lighter cars as the answer.

by Staff
September 1, 1980
9 min to read


Later this month, the first of the 1981 models will be introduced; and after a dismal 1980 model year, domestic manufacturers are anxious to move ahead and put last year behind them. In keeping with that desire to move forward, last month we offered a look at what some of the major lessors are saying about the future, both near and long term. To complete that picture, here's a quick look at what several other lessors are recommending for the 1981 model year and beyond.

Fuel economy is Detroit's top priority according to Enterprise FleetLeasing's new model recommendations. As a result, "the major trend is to front-wheel drive, four-cylinder and diesel engines with greater emphasis on aerodynamics, light weight materials and electronic components which will help fuel economy."

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The front-drive layout allows greater weight and exterior size reduction while preserving interior room. In addition to this change in technology, Enterprise sees diesels as another factor in the move towards greater fuel economy. "The diesel engine is expected to account for 15 percent of vehicle power plants by 1985. Diesel engines will either be developed by domestic manufacturers (as being done by General Motors) or imported for use in the United States. General Motors plans to schedule production of more than one million diesel engines in 1982 which will include a new turbo-charged V6 currently being developed by Oldsmobile. The diesel engine market share does, however, hinge on the outcome of proposed emission standards which could severely limit or even outlaw the use of the diesel engines in less than three years."

Looking beyond 1981, Enterprise reports that by 1985, Chrysler expects all of its car lines to be built on two basic front-wheel drive platforms. Each platform will be offered in different wheelbases.

According to the recommendations "The smaller platform, which is now featured on the Omni/Horizon, is expected to be altered slightly to accommodate the new K-car in 1981. The second platform will be introduced in 1984-85 and will be referred to by Chrysler as its X-car. The Chrysler LeBaron and Dodge Diplomat are scheduled to be replaced by smaller front-wheel drive models in 1984. A year later the same X-body platform will be used for replacements for the Cordoba/Mirada and Imperial. It is expected that a four-door model will be added to the Imperial line at that time."

As for Ford's future product plans, Enterprise sees a stretched version of the 1981 Escort/Lynx front-drive subcompacts to be introduced in mid-1982 as replacements for the Fairmont/Zephyr, which will give Ford two distinct front-drive lines at both the Ford and Lincoln-Mercury divisions. The Granada and Cougar, introduced in 1981 using Fairmont/Zephyr tooling, are expected to remain unchanged until 1984. "In 1983, the Mustang/Capri and LTD/Marquis are expected to have major sheet metal changes and to be down-sized. The Thunderbird and Cougar will be downsized and restyled again in 1983 and are expected to retain their rear-wheel drive layouts.

"Beginning in 1985, Ford's full-size cars will begin the transition to front-wheel drive, according to industry sources. By 1987, all of Ford's mid-size and full-size lines will feature front-wheel drive," Enterprise reports.

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"It appears that General Motors is dedicated to switching most of its car lines to front-wheel drive by 1985," the recommendations continue. Only performance cars such as Camaro/Firebird and Corvette will retain rear wheel drive. In keeping with a pattern begun with the X-bodies, GM plans three major mid-year introductions, and these intros will involve front wheel drive models. The first is the J-car slated for introduction next spring, and this model will replace the Monza/Sunbird models. A year later GM's mid-size A-bodies will be switched to front-drive using X-body mechanicals but on a different wheelbase. Enterprise also anticipates the full-size B and C models to receive front-drive and a mid-1983 introduction. These models are expected to use smaller transverse engines which will mostly be V6 and diesel units.

While the mid-size A-bodies are scheduled for front-drive in mid-1982, the A-special intermediates are not scheduled for similar treatment until 1984-85, when they will be downsized and receive the new technology. The X-cars, which started GM's move to front-drive, are not expected to receive any substantial changes until the late 1980's.

Recognizing the fact that imported cars now account for almost 25 percent of new car sales in the U.S., Enterprise feels their impact will not be readily felt in the fleet sector. "Their market penetration in commercial vehicles fleets has not been as impressive as sales to individuals because a vehicle cannot be special ordered due to the lack of domestic production. If the foreign manufacturers commit and build domestic factories (as many have said they will), imported cars and small trucks will gain a more significant share of the U.S. commercial fleet market."

While Enterprise feels the impact of imports will not be a major factor, government regulation will continue to be felt in all areas of the automotive industry. "Federal regulations require passive restraints on all full-size cars starting in 1982. Federal law does not specify air bags, but it is anticipated that air bags will be the primary passive restraint system, with small percentages of cars using a passive seat belt restraint. By 1984, all cars must contain passive restraints.

"Bumper impact and side impact regulations are expected to be stiffened throughout the 1980's" Enterprise adds. "If the past is any indication, we can expect greater governmental involvement in all areas of the auto industry in the future."

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For 1981, CommercialCredit/McCullaghLeasing has divided the vehicles included in its recommendations into three categories: standard fleet vehicles intended for use by sales and service personnel, middle management fleets primarily for supervisory personnel, and executive fleets for senior management or where otherwise appropriate. Each category includes a list of recommended accessories and has been sub-divided according to mileage and endurance factors.

McCullagh notes the increasing number of domestically produced front-wheel drive cars and reports that the models "have better road handling capability and will feel more stable in wind and snow conditions. The absence of the tunnel requirement for the propeller shaft used on conventional drive allows better legroom than ever before. These cars will have heavier tire wear on the front wheels than conventional drive, but this characteristic is offset with better than ever rear tire mileage. Tire crossing is not recommended."

In addition to recognizing the introduction of the Chrysler K-car and Ford's Escort/Lynx front-drive models, McCullagh said fleets can anticipate the mid-1981 introduction of GM's front-drive Monza/Sunbird models. These cars will debut as 1982 models, and while there will be no 1981 Monza/Sunbird, production of 1980 models will continue until December of this year. Oldsmobile and Buick are expected to introduce their J-cars in the fall of 1981.

As for resale, "the two-door sport versions are still very popular and should continue to be. Both four cylinder and six cylinder are 'in' and the V8s are 'out' as are almost all full-size cars. The front-wheel drive vehicles are extremely good and will continue to be for the foreseeable future." McCullagh advises that good resale items are two-door specialty vehicles, compacts and subcompacts, front-wheel drive models, four and six cylinder cars. Difficult resale units are ones equipped with V8's, lacking air conditioning, having high mileage, station wagons and full-size cars of any make except the Seville.

"We recommend the use of three door and five-door hatchbacks vehicles as substitutes for station wagons whenever possible. Additional cargo area can be accomplished by using an emergency spare tire versus a full spare tire and wheel," Mccullagh reports.

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"The downsizing mode has been accomplished with a tradeoff of size for extra accessories. Driver resistance to smaller and lighter vehicles has been minimized in many fleets by allowing an increase in optional accessories and should be considered since resale value is enhanced by these accessories: cruise control, tilt wheel, power windows, power door locks, two-tone paint, color keyed seat belts and AM/FM radios."

In its recommendations, McCullagh also recognizes the increasingly important role of vanpooling in company transportation programs. "Many major companies, including Commercial Credit/McCullagh Leasing, Inc., are already operating Vanpool programs and will continue to expand them in the months to come. The need for gasoline conservation continues to increase and efforts to reduce traffic congestion and air pollution have resulted in many companies encouraging vanpooling for their employees."

McCullagh recommends the following equipment for vanpool units: small V8 engine, automatic transmission, power steering and brakes, tinted glass, dual air conditioning, rear auxiliary heater, auxiliary fuel tank, heavy-duty battery, 12 or 15 passenger seating, AM/FM radio, insulation package, wheel covers, hinged side doors and rear door latch and lock.

In its 1981 recommendations for fleets, Hertz Car Leasing views the deterioration of the used car market, soaring depreciation rates and the decline of U.S. car production as three of the major problems facing fleets today.

"Inflation, recession, and the fuel crunch, plus the differently of financing, high interest rates and new credit controls-all working together-have created a near agonizing depression in used car sales. People who are buying used cars are avoiding gas guzzling eight cylinder models like the plague," according to Richard Weishaar, vice president and general manager of the division. He adds that used car buyers are looking for low mileage intermediate and compacts to fill their needs. "Because of reduced sales, used car inventories are backing up all along the line. Wholesalers and retailers alike have untold numbers of cars sitting idle."

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Weishaar indicates that the impact of sluggish used car sales has also had an adverse effect on vehicle depreciation rates. "In most cases, the traditional two and 2.5 percent has soared as high as 3.5 percent. And the likelihood is that the situation will deteriorate even further." Fuel economy aside, size, style and mileage affect resale value, the company states. Those units that are selling are "cream puff" intermediates and compacts while few high mileage units are being sold.

"Where does this leave us if you have been using larger standard cars and clocking high mileage on them? If you operate with a closed-end lease, inevitably you'll be paying higher monthly rates. If you operate via finance leasing, you'll have to face the consequences of the drop in resale values. How do you protect your financial interests?" Weishaar asks.

"Focus on smaller cars. Choose cars like the GM X and Chrysler K bodies, Ford/Lincoln-Mercury Escort and Lynx. These are cars that are expected to depreciate on a lesser scale and consequently permit rates more like those you have been accustomed to in the past-especially if you reduce your turnover period to keep mileage lower than the typical 50,000-mile interval," Weishaar recommended.   

Hertz said its theme for 1981 is "You've got to go smaller, you don't have much choice. Full-sized cars are no longer feasible for line duty in most fleets. If you require more room than the compacts give you, the intermediate sizes are your best alternative." While intermediates do not deliver the fuel economy of the smaller cars, these models will be offering greater fuel savings than before.

"Together with our emphasis on down-scaling, we again stress the desirability of shorter-range, lower mileage turnover. This of course, is to preserve the resale value of your fleet cars, which can be a pressing consideration."

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The slow sales and depressed production during 1980, according to Hertz, sets the stage for potential delays in delivery for 1981. "We suggest that you regard the placement of your 1981 fleet orders as an urgent priority and take the necessary steps as soon as possible."

The shorter replacement cycles recommended by Hertz calls for a 24-month/40,000-mile cycle for intermediates, a 36-month/55,000-mile for intermediates and a 36-month/55,000-mile policy for specialty two-door models.



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