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AMERICAN CARS REALLY HAVE ALMOST CAUGHT UP TO THE JAPANESE

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Not long ago, the nation's Big Three automakers left by the roadside a chance to debate whether their cars are as good as those built by their Asian counterparts.

That evening, Lee Iacocca was to appear on ABC's "Nightline" show on competition between the U.S. and Japanese auto industry. But the outspoken Chrysler Corp. chairman, now on a six-city tour to convince Americans that Chrysler cars are just as good as Japanese models, was not seen.Iacocca's request to appear live in the studio was denied by the show's producers, who said it would give him an advantage over other guests linked electronically from other locations.

So those who stayed up to watch "Night-line" that evening were left with the common perception that while American cars have improved in quality, Japan still is way out in front by giving buyers what they want.

And those impressions were largely reinforced because top executives of Toyota's and Honda's U.S. operations stepped in and monopolized the show, with virtually no counterattack from Detroit.

So much for "Advantage: Chrysler," which happens to be the No. 3 carmaker's latest advertising theme.

"Everything from Japan is perfect, everything from America is lousy," Iacocca is heard telling his management team in those ads. "The truth is we've got advantages over the Japanese in every car we make, but nobody knows it. And that's going to change."

Many consumers are convinced the Asians already have obliterated the competition from any Detroit automaker in some parts of the U.S. car market.

The numbers show it. Cars built by Japanese and South Korean automakers both here and abroad took 27.3 percent of the U.S. car market last year, up from 25.3 percent in 1988 and 22 percent in 1986.

Much of the gain was in the large compact sedan market, where Honda's Accord was the top selling nameplate last year - a first for a Japanese automaker, although the Accord is domestically built.

"That is where we have the biggest disadvantage," said one Ford Motor Co. product planner, who conceded Ford will not be truly competitive in the compact sedan market until it comes out with a new Tempo and Topaz for 1994 - cars now being designed by Ford of Europe.

In the sports coupe market, the Mitsubishi Eclipse outsold the Plymouth Laser by nearly 22 percent last month despite the Plymouth being offered at five times as many U.S. dealerships as the Mitsubishi version.

This is particularly telling since the Eclipse and Laser are virtually identical cars built on the same assembly line at an Illinois assembly plant jointly owned by Chrysler and Mitsubishi.

Industry executives and analysts generally agree many buyers still think Japanese cars are better built, more competitively priced, and able to hold their resale value longer than American models.

But some of that may simply be perception lagging reality. "The car has become something like wheat in that it's a commodity grown around the world," said Arvid Jouppi, an industry analyst and founder of the Detroit Automotive Roundtable. "You can make choclate eclairs or spaghetti from wheat - in other words, make it into any level of taste or preference."

Here is how experts now rank Japanese and American cars in various categories: Quality - Advantage: Japanese

Widespread reports about the abysmal quality of American cars during the early 1980s created fertile ground for the Japanese to prove their mettle and make tremendous inroads into Detroit's domain.

But U.S. automakers insist that expected quality gains during the next several years will negate any advantage held by the Asians.

"The best domestic cars are significantly better than the worst Japanese cars," said Joel Pitcoff, a Ford sales analyst.

Still, the Japanese hold the overall edge and are expected to for some time.

"Americans have really caught up with Japanese on exteriors, with much better fit and finish," said Michael Luckey of the Luckey Consulting Group in Tappan, N.J. "But buyers still feel the Japanese have interiors that are better put together and feel nicer."

"On a scale of one to 100, the perception is the Japanese are very close to 98 and Americans somewhere about 80," Jouppi said. "I would say both are now in the area of 95 and 100, but I would still put the Japanese on top in that range."