COMPACT CARS LOOM LARGE FOR U.S. MAKERS

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NEW YORK-U.S. automakers have been riding the truck wave to a profitable resurgence. But now, they're gearing up an assault on the compact and subcompact car segments that are at the heart of import territory.

At the New York Auto Show last week, Ford Motor Co.'s Ford Division took the wraps off its Contour compact sedan, while General Motors Corp.'s Chevrolet unveiled two redesigned subcompacts, a Chevrolet Cavalier and Geo Metro. All three cars will reach showrooms in September.

Chrysler Corp. is also joining in the push, recently introducing its Neon subcompact and planning a 1995 model year introduction of new compact models Dodge Stratus and Chrysler Cirrus.

The new models appear to be a big leap forward for Detroit, which was slow to improve and restyle its small cars during the 1980s. Japanese nameplates moved into the void, with popular models like the Honda Civic and Accord, Toyota Corolla and Camry, Nissan Altima, and Mazda 626.

Subaru of America also hopes to make its mark with a redesigned line of compact Legacy models, unveiled at the New York show and going on sale in mid-July.

Currency exchange rates have put Japanese marketers at a disadvantage, but most industry officials expect them to regroup.

"The Japanese haven't gone away. They're still very formidable competitors," said Ford Chairman Alex Trotman, who presided over the glitzy unveiling of the Contour sedan.

The Contour, and its companion Mercury Mystique, are the U.S. versions of the Mondeo model marketed by Ford in Europe. Ford expects the new model to draw a much more upscale buyer than the Ford Tempo/Mercury Topaz compact models that are being phased out.

Ford marketers see the Contour sharing a garage with one of the company's upscale trucks, like the Explorer sport-utility vehicle or the new Windstar minivan. The idea is that a family uses a truck for hauling around a lot of passengers or cargo but a smaller car for basic in-town transportation.

"We have a lot of studies under way, looking at two- and three-car households and what is the right lineup for not only different ages and lifestyles but also different geography," said Steve Lyons, Ford Division general marketing manager.

One possibility, Mr. Lyons said, is that ad and marketing programs in the future could be directed at explaining how different Ford vehicles fit into a household fleet.

Contour advertising, now being developed by J. Walter Thompson USA, Detroit, thus could include references to Windstar or Explorer in some cases, Mr. Lyons said.

The introductory campaign is also expected to focus on style, safety and technology benefits such as a filtration system that removes virtually all pollen and road dust.

For Chevrolet, the Cavalier redesign is the first in more than 10 years. Lack of fresh product was the major reason Chevrolet lost 2.7 points of car market share, going from 15% in 1986 to 12.3% in 1993.

"We lost our place in the '80s," said J.C. "Jim" Perkins, VP-general manager of Chevrolet. "We let our products slip."

Chevrolet has a chance to regain ground with what Mr. Perkins calls "a product renaissance" and a new ad theme, "Genuine Chevrolet," created by Lintas Campbell-Ewald, Warren, Mich.

The new Chevys begin with a redesigned Lumina midsize sedan in mid-June and a new Monte Carlo midsize coupe coming in August.

Subaru plans to give the Legacy line of sedans and wagons a boost by putting more emphasis on the models' optional all-wheel-drive capabilities, said Mary Treisbach, director of marketing.

A special edition Outback station wagon model will be positioned as a lower-price alternative to four-wheel-drive sport-utility vehicles.

Subaru, which has five regional offices and two independent distributors, also wants to develop closer synergy between its national and regional advertising. Temerlin McClain, the Dallas agency hired last December for national work, has begun making presentations to handle regional business as well, though Subaru won't require its regional organizations to make the switch, Ms. Treisbach said.

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