British Luxury Car Makes New Bid for American Buyers

IT won't be an easy job polishing up the tarnished image of the ill-fated British luxury car, the Sterling. Austin Rover Cars of North America will introduce four versions of the sporty new Sterling 827 sedan next month, including the limited edition SL and a hatchback, the SLi, all priced around $30,000.

Initial reports in automotive specialty publications, such as AutoWeek, have been generally positive, praising the vehicles for their tight suspension, rich leather and wood interiors, and the new, 2.7-liter, 24-valve V-6, which delivers a top speed of 136 m.p.h. - more than enough for American roadways, though an essential status symbol for performance-conscious European luxury import buyers.

The various versions of the Sterling 827 replace the two models in the 825 series, which launched Rover's return to the US market barely two years ago. At that time, Sterling tried to camp onto the renewed success of Jaguar, another British nameplate, according to Chris Cedergren, a market researcher with J.D. Power and Associates in Westlake Village, Calif.

Austin Rover was hoping there was ``demand out there for a low-priced Jaguar. There is a segment of the population that wants that English heritage, that rich leather and wood veneer,'' says Mr. Cedergren.

Unfortunately, he says, that part of the Sterling message never got across. Instead, all too many prospective buyers have heard horror stories reinforcing the image of shoddy British manufacturing.

``I knew I was in trouble the day I got the car,'' laments former Sterling leaser Brian Mattes. ``I drove it home from the dealership, pulled into the driveway, and a piece of wood fell off the dashboard.''

Mr. Mattes, who lives in the Philadelphia area, has a 4-inch-thick folder full of service receipts documenting his problems - everything from a speedometer that would tell him he was doing 100 miles an hour while sitting at a stop light to leather seats that unexpectedly turned a rainbow of colors.

``Every time you got in the car, it was, `What's going to break now?''' Mattes recalls of his 15-month ordeal.

Eventually, Mattes says, Rover agreed to buy out his lease. He has since purchased an Acura Legend, the sporty luxury car built in Japan by Honda.

``We're going to focus all our attention on improving quality,'' says George Simpson, the managing director of the Rover Group.

Company officials say they have made more than 300 improvements in the vehicle to respond to quality problems.

Such problems helped the Sterling 825 series rank second from the bottom - just above the Yugo - according to J.D. Power's customer satisfaction index.

In 1988, Rover sold just 8,899 Sterlings in the United States, down from 14,171 in 1987. Original projections called for volumes of 30,000 units annually.

Sales rose a bit in January, but that took a costly incentive program on which Rover of North America is actually losing money for every Sterling it sells. Dealers are still saddled with lots full of 1988 models, which were to have been phased out last fall.

``They just aren't clicking and there's no evidence that's going to change,'' says analyst David Cole, head of the Center for the Study of Automotive Transportation at the University of Michigan.