In-Thing With Affluent : In Motown, Car Imports Riding High

Native son Thomas Hearns, nicknamed the “Motor City Cobra” by his adoring fight fans in this depressed city, keeps two Mercedes, two Rolls-Royces and a Lamborghini Countach in his garage here.

Keith Crain, the socially prominent publisher of several local magazines that boost Detroit, including Monthly Detroit and Automotive News, drives around the capital of the domestic auto industry in a Porsche and a Mercedes.

And Bill Bonds, Detroit’s most popular television personality and the news anchorman on the local ABC affiliate, has added a classic Mercedes to his stable of American cars, despite taking heat for the purchase in the local press.

Biting the Hand

Here in the hometown of Ford Motor Co., General Motors Corp. and Chrysler Corp., it has suddenly become fashionable among the affluent to abandon Detroit-built cars in favor of fancy European models. Some of the city’s wealthiest residents--those who have arguably benefited the most from Detroit’s auto-based economy--seem to be biting the hand that feeds them.

From trendy young professionals in the chic suburb of Birmingham to the old, moneyed families of Grosse Pointe, more and more upscale Detroiters are trading in their Cadillacs for Audis and BMWs.

“If you go into some neighborhoods in the suburbs, all you see are Volvos and Saabs all over the place,” said Jackie Kallen, a local publicist who owns two Porsches.

Such losses so close to home are obviously embarrassing for the domestic luxury car lines like Cadillac and Lincoln. It’s one thing to lose in Beverly Hills, observers say, but, if the domestics cannot hold off imports in Detroit, where can they?

To be sure, the problem has yet to reach crisis proportions. By the standards of Los Angeles or New York, imports are still relatively rare in the Motor City.

Imports 8% of Detroit Market

Total import sales accounted for only about 8% of the Detroit market in 1984, compared to 23.5% nationally. And the pricey European autos that make up what the industry terms the “European high-line” import group still account for only about 1.2% of car sales in Detroit, up from an insignificant 0.7% in 1979.

But, in the Detroit area, where nearly everyone has some connection to an auto company, a parts supplier or a union, the kind of car you drive has always been as much a measure of your hometown loyalty as a matter of consumer preference.

So statistics that show a surge in luxury European sales here seem to indicate that the affluent have brushed aside any guilt feelings they might once have had about contributing to the jobless rate in the Detroit area, which stands at 9.5%. (By contrast, the national unemployment rate was 6.9% in August, and in Los Angeles the rate was 7.1%.)

Between 1979 and 1984, total sales of luxury European imports jumped 55% in the Detroit area from 2,577 cars in 1979 to 3,944 last year, with huge percentage gains posted by virtually all of the Europeans, according to new car registration figures compiled by R. L. Polk & Co.

Audi, for example, now the No. 1 European luxury car in Detroit, had a 94% sales gain, to 1,380 units, during the five-year period, Saab’s sales skyrocketed 200%, to 462, and Porsche sales rose nearly 120%, to 335. Those sales gains are comparable to, and in some cases even larger than, the sales increases posted by the Europeans nationally.

Although the dramatic expansion in the luxury car market generally has so far allowed Lincoln to keep pace with the Europeans in the Detroit area, with a 60.3% sales increase between 1979 and 1984, Cadillac, by contrast, suffered a 4.2% decline in the same period.

Poor Show More Loyalty

Meanwhile, Detroit-area sales of less expensive Japanese models during the same period plummeted--perhaps indicating that lower-income Detroiters have remained more loyal to the U.S. auto industry than the city’s more affluent residents.

Total import sales (dominated by the Japanese) were off 27% between 1979 and 1984 in Detroit. Nissan’s sales were down 37.7% and Toyota’s were off 9.4%, according to Polk. That contrasts with a nationwide sales increase of nearly 5% for total imports and national gains of nearly 10% for Toyota and 3% for Nissan during the same five years.

Among the Japanese imports, only Honda, the car of choice for many affluent young professionals, reported a significant gain here--its sales were up 49.6% during the period.

Certainly, Detroit’s severe economic woes and its dramatic population losses over the last few years, coupled with quotas on Japanese imports, have made it more difficult for middle-income or blue-collar consumers in the area to buy new cars of any kind. But the sales declines for Toyota and Nissan in Detroit were much larger than the modest 6% drop in sales of U.S.-built cars during the same period.

“It looks like the working man is not buying Japanese, but all of the doctors in Detroit are getting their BMWs,” one Ford executive noted.

Little Concern Voiced

But top sales officers at the domestic luxury car companies still express little concern over the inroads the Europeans are making here.

“We’re worried nationally, because the imports are picking off the younger buyers, but the numbers for the luxury imports in Detroit don’t impress me at all,” insists Gordon Horsborgh, director of marketing at Cadillac.

“I’m not particularly worried,” added Edsel B. Ford II, son of Henry Ford II and head of marketing for Ford Motor’s Lincoln-Mercury division. “I think we’ve got cars coming that will get these guys out of their BMWs and into Lincoln-Mercury products.”

But it may become increasingly difficult for the domestic firms to win back many converts here. Detroit-area European import buyers say that they are trading in their domestic cars for the same basic considerations of quality, performance and styling that have led affluent consumers throughout the nation to make the shift. Until the domestics improve, they add, they will not go back.

Barbara Williams, a manager in the credit department at General Electric’s suburban Southfield, Mich., office, said that she just traded in her Oldsmobile Cutlass Supreme for a $19,000 Volvo 740 GLE because “the European cars are better built, better made automobiles. I’ve been thinking about buying a car for three or four years now, and all along it was going to be foreign.”

Purchase Upset Co-Workers

She adds that, although some of her co-workers were upset by her purchase of an import, she doesn’t feel guilty at all. “I understand what they are saying, but I feel I should have the right to buy what fits my needs,” Williams said. “People sort of frown on you here when you buy a foreign car, but that doesn’t bother me much because I think I got the best deal.”

Despite having brothers in management at both Ford and GM, Tony Maciarz, a Birmingham hairdresser, also just bought a Volvo to replace his Chevrolet Cavalier.

“My brothers said that I should support the home industry, but I figure it’s my money,” Maciarz said. “When I thought about spending $15,000 to $20,000, I wanted a more individualized, better-styled car than I could get from the domestics for the same price.”

Ironically, European car dealers in Detroit believe that the U.S. car makers’ financial recovery has been a big help to their sales here, diminishing the social stigma attached to buying imports that was prevalent during the recession. With GM, Ford and Chrysler posting record profits, affluent consumers apparently no longer feel any reluctance to splurge on the expensive foreign-made models that have been popular in other parts of the country for years.

“Until recently, there was a great deal of reluctance here to buy European cars,” said Jim Gray, a Volvo and Lotus dealer in suburban Birmingham. “But then it was like somebody opened a door and suddenly it became an in-thing, and people said it’s OK to buy these things.”

Now, despite the fact that most of the wealth and high-paying jobs generated here come at least indirectly from the U.S. auto industry, many Detroit-area professionals seem to feel less pressure to buy domestic cars than they once did. Unless they work for the Big Three.

“A lot of it depends on whether you have a direct connection to the auto industry and derive your business from it,” said one Detroit attorney who owns a Volvo. “All the attorneys who don’t have ties to the auto companies seem to be gravitating to European cars.”

He noted also that many lawyers in Detroit who handle legal work for the auto companies or trade unions own both imported and American cars--and drive their domestic models when they are calling on their clients.

Most managers at the Big Three, who receive company cars and discounts toward purchases of additional cars built by their firms, still stick to their own makes.

Study Shows Loyalty Remains

A recent demographic study by Volvo comparing its buyers in Detroit to the rest of the nation confirmed that loyalty still exists. The study found that corporate executives were less likely to buy imports in Detroit than elsewhere.

Still, import dealers say that at least a few Big Three executives are quietly buying fancy European cars. “We occasionally get a Big Three manager in here,” said Fred Lavery, who owns Porsche and Audi dealerships in Birmingham. “There are a certain number of industry executives who are car enthusiasts and want to buy Porsches. Usually, they say they are buying the cars for their wives, but I think the husbands usually end up driving them on weekends.”

But buying imports for personal use (aside from test-driving them on behalf of the company) is still considered unwise for politically savvy managers at GM, Ford and Chrysler, as well as for staff members of the United Auto Workers union. A rising young auto executive would drive a BMW to work only at great peril to his or her career. “It is sufficiently unthinkable that it just doesn’t happen,” one industry executive said.

For local media personalities, driving a fancy import can cause some embarrassment as well. Bonds, for instance, felt compelled to write a letter to the Detroit Free Press defending his Mercedes purchase, assuring the public that he owned several domestic cars also, after his Mercedes ownership was disclosed by a Free Press columnist. But other on-air television personalities still keep a low profile with their imports for fear of offending their blue-collar viewers.

Known as ‘Mercedes Discreets’

“I cannot think of a single TV person who doesn’t have an exotic foreign car, but they still drive them only on weekends,” said Henry Baskin, a Detroit entertainment attorney. “They drive what we call Mercedes Ds, for ‘Mercedes Discreets.’ ”

But such concerns may soon be a thing of the past. With the Japanese starting to build cars in the United States and with the domestic companies importing thousands of cars from both Japan and Europe, it is becoming harder for consumers to figure out which cars are built here and which are imported.

As a result, UAW members no longer can take sledgehammers to Japanese cars (as they did in public protests during the recession) without checking first to see if they were built in the United States.

Now, cracks are appearing even in the union’s once-solid front against imports. This summer, a UAW worker at Ford’s Lima, Ohio, engine plant took on the domestic-only biases of his employer and union and was fired for repeatedly parking his import in a lot close to the plant that was reserved for domestics.

Change is visible even in the parking lot at the UAW’s Detroit headquarters, where a sign warning drivers of imported makes to park their cars in Tokyo has finally been taken down.

Sign ‘Unduly Belligerent’

UAW spokesman Peter Laarman said that the sign, which was put up during the recession in 1981, was taken down early this year because “it was no longer accurate.” Although union officers are still under heavy pressure to drive domestic cars themselves, Laarman said that the growing confusion over where cars are actually built made the sign obsolete and “unduly belligerent,” especially as the union is now starting to represent workers at the U.S. plants of Japanese car companies.

“It is getting very confusing now,” publisher Crain observed. “Why should I feel qualms about buying an import when the Big Three are importing cars themselves from Japan and Europe? Are you going to torch your local Chevy dealership because it’s selling Isuzus (sold by GM as Chevrolet Spectrums)? Are you not going to buy an AMC car because the company is owned by the French government (state-owned Renault controls AMC)?”