Designs on the Future : With the Southland a crucial battleground, car makers are asking local studios to shape tomorrow’s automobiles.

Charles W. O. Ellwood, an English-born car designer who has spent the bulk of his career in Germany, had an automotive epiphany when he arrived in Southern California last October to take the helm at Volkswagen’s Simi Valley design studio.

American drivers’ fascination with cup holders, he says, suddenly made sense.

“You can’t drive the speeds we drive in Europe and use cup holders. It’s just too dangerous,” says Ellwood, 39, formerly chief of interior design at Volkswagen in Wolfsburg, Germany. “But here, you’re living in the vehicle, you’re drinking in the vehicle, the kids are moving back and forth. You’re doing a lot of things other than driving.”

Car makers have been making similar realizations since they began flocking to the West Coast 20 years ago. From the cup holders that pop out of dashboards to the sleek coupes pulling out of driveways, the Southern California influence has been profound.

Most designs are still produced in Detroit, Tokyo, Wolfsburg and other motor cities. But today 16 satellite studios are sprinkled throughout the Southland, including five in the San Fernando Valley and Ventura County region. From Camarillo to Valencia, designers in the area are shaping the futures of General Motors, Ford, Volvo, BMW, Volkswagen and Audi.

Recently, the five local studios have come up with an array of designs that have captured worldwide attention, including electric car designs from Volvo and BMW that are not yet scheduled for production, but may enable those companies to thrive in California as tough new emissions regulations take hold. The two domestic studios have produced designs--the 1993 Ford Probe and the 1994 Chevrolet Camaro--that have resuscitated sports coupe models whose sales had faltered. And Volkswagen’s update of the classic Beetle has generated so much excitement among long-despondent Volkswagen faithful that the company, which had been hesitant to revive the model, is talking of delivering the new Beetle to dealers in 1998.

For all their sparkle, these successes are already distant memories for the studios, where designers are under the gun to divine today what the public will want at the turn of the century. The stakes are monumental. To go from sketches on a page to cars on the road can take more than five years and cost upward of $1 billion. And after losing market share to consumer-attentive Japanese auto manufacturers in the 1980s, American and European car makers know they cannot afford to neglect a single nuance of a car’s design.

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Thomas V. Peters, head of GM’s studio in Newbury Park, says flatly: “This is war.”

California, then, is a strategic battlefront. The state accounts for 10% of new car registrations in the United States each year, and 3% of new car registrations in the world. To succeed in California, car makers have decided, it makes sense to be in California, where the sun splashes off a car’s finish, revealing the flaws or grace of every curve; where car-crazy consumers are quick to embrace a fresh design, and quicker to discard a stale one; and where cultural trends seem to land like drops of water that ripple through the rest of the country.

Local studios scour the Southern California landscape for hints of shifting consumer tastes, looking for cues in everything from computer terminals to athletic shoes. They pore over hundreds of magazines each month, noting emerging clothing styles and advertising strategies. Some have even adopted an academic approach. Volvo’s Camarillo design center, for example, employs a staff sociologist to track changes in consumer attitudes.

“This is a think tank,” says Sylvia S. Voegele, general manager at Volvo’s studio. “When we present a design, we also present who we think it would sell to and why.”

Always wary of industrial espionage, the studios guard their ideas zealously, hiding behind smoked-glass windows that are impenetrable to an outsider’s gaze. Within the studios, work stations lie behind doors with magnetic security locks. Drawings and documents are locked away or shredded, and employees are required to sign contracts pledging to protect their company’s secrets.

Annual budgets at the studios fall in the $2 million to $4 million range, and each center employs about half a dozen designers, with total employment ranging from 15 at Volvo to 30 at GM.

Four of the five local studios--Ford, GM, Volkswagen and Volvo--are satellite operations of, or are under exclusive contracts with, the manufacturers they represent. The exception, Designworks/USA in Newbury Park, works on products ranging from light-rail cars to garden tools, in addition to the work the company does for BMW. It was Designworks’ expertise in seat design that caught the German auto maker’s attention in the late 1980s, says Charles W. Pelly, president of Designworks. BMW has since purchased 60% of Designworks’ stock, and now accounts for a third of the studio’s business.

Studio assignments range from the simple--a request for a new rim design, for example--to the seemingly impossible. “Detroit could direct us to explore the youth market and deliver what we think that group will embrace in 1998,” says Richard J. Hutting, chief executive at Ford’s Concept Center California Inc. in Valencia.

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But typically, the manufacturer will specify a wheelbase and engine layout, then request a new design or an update of a model already in production. As soon as the order arrives, designers commence sketching, and the weeding out process begins. Designers compete with other designers within the studio; studios compete with other studios within the company; and, finally, companies compete with other companies in the marketplace.

Ford’s studio in Valencia has fared well in these contests. Hastily assembled in 1983 after GM had laid plans for its Newbury Park facility, the Ford studio produced a winner right away--the 1989 edition Thunderbird. Since then, the studio has had a string of successes, including a major influence on the 1993 Probe. Sales of that year’s model of the sports coupe surged 42% from 1992.

But now even Hutting acknowledges that Ford, the domestic design leader since introducing the top-selling Taurus sedan in the mid-1980s, has surrendered the mantle to Chrysler, whose striking new car line was developed at the Chrysler Pacifica studio in Carlsbad. Ford, Hutting says, must search for ways to reassert itself.

One of the key challenges will be to anticipate future trends in the minivan and sport utility vehicle markets, segments that barely existed a decade ago, but last year accounted for 16% of Ford’s domestic sales, or 564,916 units.

Searching for clues to the future of these markets, Hutting and his design team are paying close attention to societal trends, such as the four-day workweek. If that trend broadens, consumers may use vehicles less for commuting and more for leisure.

In the future, Hutting says, customers may want their utility vehicles “more car-like or more truck-like. We have to decide and make a commitment.”

GM, meanwhile, must find a way to turn back the tide. The company has watched its share of car sales in the United States slip from 44% in 1983 to 32% last year, and design leadership has shouldered much of the blame. While Ford was turning heads with the Taurus, GM was turning stomachs with the Caprice, a whale of a car that went belly-up on arrival.

The company had simply become “out of touch,” says Peters, chief designer at GM’s Advanced Concepts Center in Newbury Park. “They needed a wake-up call.”

Peters and his staff may have helped to provide it. The 1994 Chevrolet Camaro, based largely on an aerodynamic Newbury Park design, has been such an instant hit that analysts are saying GM may start paying increased attention to its sometimes-neglected California studio. U. S. sales of the Camaro and its Pontiac Firebird sibling totaled 76,602 during the first five months of 1994, compared to sales of just 21,509 garnered by the previous design during the same period of 1993.

“GM finally gets it,” says Gordon Wangers, an analyst with Vista-based Automotive Marketing Consultants Inc. “The Camaro could be a car that will turn GM around.”

At Volkswagen, similar hopes are being pinned on the Concept One, the working name for a smooth, symmetrical successor to the classic Beetle that was a best-seller for generations of Americans.

U. S. Beetle sales peaked at 367,607 in 1969, but Volkswagen sales have fallen off the charts since 1977, when the last Beetle was sold in the United States. Last year, amid production problems at the company’s Mexico plants, U. S. sales dipped below 50,000 units, and trade magazines even began reporting rumors of a Volkswagen pullout from the U. S. market.

If the Concept One is built--and Volkswagen has signaled it probably will be--it can’t be expected to bring back 1970s-era market share for the German auto maker. But Volkswagen spokeswoman Lana Ferrari says that since January, when the Concept One was unveiled at the Detroit auto show, the company has fielded 30,000 calls and collected 5,000 letters from VW fans urging the company to build the new Beetle.

Despite its nostalgic appeal, the Concept One is no replica, says Ellwood, head of Volkswagen’s Simi Valley studio. The car is capable of being powered electrically--an important capacity because California law requires that 2% of all vehicles sold in the state in 1998 be emission-free. Unlike its predecessor, the car also has an up-front engine, front-wheel drive, anti-lock brakes, dual air bags, and, of course . . .

“Cup holders front and rear,” Ellwood says with a chuckle. “We paid particular attention to that.”