Preview
It was last summer that American Motors' board chairman, Roy D. Chapin, announced his company's plan for fighting back from the brink of automotive oblivion. Every six months for the next three years it would launch a new car. The opening punch was the Hornet, a kind of left jab at the small car establishment to get some traffic flowing in the showrooms. Now it's being followed at the scheduled interval with a roundhouse right, the Gremlin, aimed directly at the small foreign intruders that have taken to our roadways. But in the auto business aiming and swinging don't always produce the hoped-for results, so Chapin and his fellow AMC policy makers have a nervous wait ahead of them until they see who, if anyone, falls down.
For the record, American Motors claims to have singled out Volkswagen as the adversary, but it hasn't countered with a VW kind of car. Instead, it has tried, by way of market surveys, to distill the qualities that make VWs and other small imports desirable to Americans and then build from that foundation. Obviously, the "foreign mystique" has been rejected. The conclusion is that import buyers want value for their money and are concerned, in order of importance, with distinctive styling, a car they can be proud to own, ease of handling, and a vehicle that is well adapted to American driving conditions. That means a small, reliable car that somehow manages to be fashionable despite its low price. This is the formula for the Gremlin.
And timing is important. Even though the imports are claimed to be the opposition, American Motors is well aware that Ford and GM will introduce minicars in the next few months. A not overlooked element in Ford's success with the Mustang and Maverick was that each was first in the market and American Motors wants to have that factor working for its Gremlin.And being first didn't leave much time. (From the date the decision was made to go ahead with the Gremlin until it had to be in the showrooms could only be about 20 months.) This tight schedule, combined with AMC's weak financial position, ruled out the possibility of tooling-up an all-new small car. Instead the Gremlin continues the AMC practice of building up a whole line of cars from the same parts bin; it is effectively a truncated Hornet.
The Hornet heritage is obvious. From the front bumper back to about the middle, the most noticeable difference between the two cars is trim. It is at the rear that the two go their separate ways. The Gremlin's wheelbase has been shortened one foot to 96 inches (same as VW), and the rear overhang has been clipped off to give an overall length of 161.3 inches (just two inches longer than the Beetle).
But while the Gremlin borrows heavily from the mechanical Hornet, it borrows not at all from the Hornet's configuration. Instead the Gremlin ends up being a short station wagon, a sedan-wagon in the manner of the French Renault 16 and Simca 1204. Because this shape offers the maximum interior space for a given exterior size it is a natural for a small car, but it has even greater value to American Motors. Not only was it important to be in the market first, but the product planners wanted something controversial so that the world would be sure to notice and perhaps even give a little credit to AMC's innovative approach. And by being unique in the American market, it will also be recognizable. All of AMC's surveys indicated that distinctive styling is the single most important feature to the imported car buyer and it is hoped that the Gremlin's unique silhouette will become as fashionable in the public eye as that of the Beetle.
Of course, AMC won't rely entirely upon shock value. It will be touting a low base price as well. At press date that price is not firm—the accountants still haven't figured out exactly how much the traffic will bear and they want to be sure, by whatever means accountants have, that the Gremlin will be competitive with the Ford and GM small cars. This is a particular problem to AMC because it hasn't much practice at being first. (Even though the exact price hasn't been set its probable range is pretty narrow. The accountants will have to undercut the Hornet's base of $1994 by a significant margin to firmly establish the Gremlin as a bona fide small car contender, and they've expressed an intention to get down into the vicinity of the VW. We anticipate the price to end up around $1900 with perhaps a daring dip a few dollars below just to look good.)
But all the verbiage about prices sure to accompany the Gremlin's introduction will be the least nourishing of advertising baloney. The last thing American Motors wants to do is sell you a base car. That, and taping $100 bills inside the glovebox door, are equally easy ways to go broke in a hurry. The Gremlin has to be priced below the Hornet for tactical reasons but. unavoidably, it costs nearly the same to build—what else can you expect when most of the body and mechanical parts are common to both cars? AMC officials are more than just a little apprehensive about this situation. When asked about production capacity for Gremlins, one executive was confident that the plant could cope with high demand—but if it appeared that Gremlins were being sold primarily to customers who otherwise would have bought a Hornet, or something else in the AMC line, the Gremlin volume would have to be cut back—the profit margin is too slim.
The Gremlin will be successful only if it attracts new buyers to the AMC flock. and only if these buyers ante up extra money for high-profit optional equipment. Like the Hornet (C/D, September), the Gremlin differs from current small car marketing practices by offering a comprehensive list of options. A larger version of the standard 6-cylinder engine and an automatic transmission are available, as well as power steering, and brakes, a handling package, limited-slip differential, air conditioning, several choices of tires, numerous interior and exterior trim packages, bucket seats and on like that—a list of more than 40 items long. There is something there to tempt everyone, hopefully. And why not? There is no reason why a small car has to be a cheap car. Considering AMC's size, this seems like the only reasonable marketing approach because it tends to stretch its few models out over as many potential customers as possible.
