Making cars in the US: too popular? An impending auto glut would be good for US consumers, but tough on the Big Three, as several Japanese-owned plants show they can make cars as efficiently here as they do at home.

America's car buyers and automakers had better buckle up and get set for the ``Great American Auto Glut.'' So many foreign companies are building auto assembly plants in the United States (sometimes referred to as ``transplants''), and so many cars are flowing in from abroad, that analysts think the industry is primed for a long, brutal price battle beginning next year.

Competition will heat up as seven Japanese plants and a Korean plant in Montreal, all scheduled for completion between 1988 and 1990, begin producing cars and adding to current industry overcapacity next year.

``We can expect tremendous price competition - we're already seeing the leading edge of that,'' says John Hammond, an analyst with J.D. Power & Associates, a consulting firm in Westlake, Calif. ``The real effect of the transplants won't even be felt until early '88.''

Good news for auto buyers is, however, less wonderful for US automakers. Indeed, there is serious trouble brewing for Chrysler, Ford, and General Motors, all of which must still must bring their production costs down further to compete with the new transplants and other imports.

``We're already seeing a glut, from the perspective of US automakers,'' says John McNeil, an auto analyst with Data Resources Inc., a Lexington, Mass., research firm. ``It's only going to get worse during the next two or three years.''

Americans buy far more cars - and more expensive cars - than any place else in the world. Last year saw 11,380,000 cars sold in the US, with sales of more than $188 billion.

With that kind of market, it is no wonder foreign car companies are competing so hard for a slice of the pie. But for US automakers, the stiff competition promises to shrink their combined share of the US market from just over 70 percent last year to about 50 percent by the end of the decade, analysts estimate.

Next year even Malaysia will send its new low-price competitor, the Proton Saga, to the US, following the lead of Yugoslavia's Yugo ($3,995) last year. Completed Japanese plants in North America are already pumping out more than 570,000 cars this year. Output is expected to jump to nearly 1 million by 1989 as plants built by Nissan, Toyota, Mazda, Suzuki, Isuzu, Mitsubishi, and Fuji (Subaru) are finished.

The strengthening of the yen versus the weakening dollar has encouraged the Japanese to build in the US. But the Japanese also see the move as a good way to defuse protectionist sentiments in Congress. Japan's automakers are also looking long-term, planning to use the US as a manufacturing base from which to produce and export cars to the world.

``It is not enough that our US operations are competitive only in the United States,'' says Tadashi Kume, president and chief executive officer of Honda Motor Company. ``We will develop our US operations to the point that we will have a self-reliant, integrated motor vehicle company capable of competing in the world marketplace.''

Mr. Kume's comments came last week when Honda, which was the first Japanese company to build a US assembly plant, announced it would build another new plant and export 70,000 cars a year from Ohio to Japan and other countries overseas. The new plant, not far from its first plant in Marysville, Ohio, will cost $380 million and be flexible enough to produce luxury cars, such as the Acura Legend in the $20,000 range, or the less expensive Honda Civic.

The Japanese aim to win the US auto battle by developing a full product line, including midsize ($10,000 to $17,000) and luxury models, while also remaining the low-cost, high-quality producer. They also plan to respond quickly to different styles demanded by consumers, and to sell their US-made cars abroad.

But as the Japanese move to sell more upscale, higher-priced models, they are not (as US carmakers seem to be) leaving any markets behind. Instead, they are trying to maintain a presence at the low-price end while proliferating their products in more market segments.

``The Japanese have been taking products we have traditionally considered to be small cars and changing the configurations of those vehicles to be more midsize products,'' Mr. Hammond says. ``They have become true midsize cars, and they are attracting true midsize buyers.''

While the Japanese move upscale and open new assembly plants, GM, Ford, and Chrysler have shuttered plants and laid off workers to reduce capacity and cut costs.

Analysts estimate some manufacturers, like Honda, still have a considerable edge in the amount of time it takes to put a car together. Two analysts say it takes an efficient producer like Honda only half the time it would take GM to produce a similar car. In addition, Honda's Marysville plant is nearly as efficient as the company's factories in Japan.

As the transplants and the imports flow in, Ford, GM, and Chrysler will hardly be sitting still. But they will have their work cut out for them as they fight it out with foreign companies on their home turf for luxury and midsize-car customers.

Ford has ``real positive momentum working in its favor,'' says one analyst who believes it will fare the best of the domestic manufacturers in the coming battle royal. The company, which is running its plants at full tilt, is making a lot of money, in large part due to its hot Taurus and Sable models, and its perceived image as a producer of quality.

Ford's problems could begin, however, a few years down the road. The company doesn't plan to remake the design of its flagship Taurus and Sable until 1992. The question is: Will they stay hot that long? Also, the labor pact Ford concluded last week gained some concessions from labor on work rules, but doesn't allow many workers to be cut from the payroll. Although its production costs are far lower than GM, analysts say, the Ford settlement isn't going to help it compete when the going gets tough. Ford apparently didn't want to endure a strike when it was making record profits.

Chrysler, on the other hand, enters the fray recoiling from a series of flops and an old product lineup. The Daytona, Laser, Lancer, and LeBaron GTS were not outstanding sellers. There is also concern about how the 1988 Dynasty and New Yorker models will sell.

Chrysler's major advantage, however, stems from its enviable position as the low-cost US carmaker. When the Japanese turn on the heat by lowering prices (as analysts say they eventually will), Chrysler will have the greatest latitude to insulate itself from this onslaught by cutting prices to meet them.

``They have been on the forefront of outsourcing to low-cost suppliers and gotten rid of a lot of internal parts production process that was inefficient,'' Hammond says. But Chrysler's recent acquisition of American Motors may hinder it down the road due to AMC's poor distribution network, and because its Kenosha, Wis., and Toledo, Ohio plants are the industry's least efficient.

GM has a variety of problems, but is trying to turn itself around. Still, at the moment it is the most vulnerable to price competition because it is the high-cost producer, and is perceived to have cars that are too alike.

``There will be substantial overcapacity in the industry, and that means that either everyone lowers prices to run at capacity, or else everybody closes plants - that includes the Japanese,'' says Brad Southworth, director of vehicle forecasting at GM.

But if GM is to compete, it will have to be quicker on its feet and chop production costs even further. Knowing this, analysts say the giant automaker is likely to hold out for greater concessions from union officials in coming talks, with a strike the likely result.

All the while, GM will be eyeing its smaller but more nimble foreign competitors, whose US plants will turn out luxury and midsize cars aimed at a market GM has traditionally dominated.

``In reality, the transplants are not that much more of a threat than cars brought over from Japan by ship,'' Mr. Southworth says. ``But what these guys have shown us is that it can be done. It takes away the last excuse.''