Mercury's new 1988 Tracer is in essence a Japanese car built in Mexico by an American manufacturer. This may sound like a bit of international mishmash but the end product is impressive.

The Mercury Tracer is not really a household name right now, simply because it hasn't been released for sale yet. But the new aerodynamically styled front-wheel drive subcompact will make its debut on March 26 and, even with the other many new models recently available in the marketplace, could very well become a success because of its price and the many interesting features.

It is, however, entering a tough segment of the market, the upscale subcompact segment, and its chief competitors, according to Mercury, will be the Toyota Corolla, Honda Civic, Nissan Sentra and Chevrolet Nova. This is a rather interesting market and age, education and income are key factors.

The Tracer has been designed by Ford Motor Co. in cooperation with Mazda. This really isn't a strange marriage when you consider that Ford owns 25 percent of this Japanese company and Mazda has been supplying Ford with many components for a few years. Although the Tracer uses a basic Mazda platform, the styling is strictly Ford and quite attractive too. The four-door hatchback test car (it is also available in a two-door hatchback and a station wagon version will be produced in late spring) did cause some attention and everyone viewing it agreed it was a good looking car with a rather unusual look.

After slipping behind the wheel of the Tracer, the interior will present a familiar sight to anyone who has ever driven a late model Mazda. Instruments and controls are just about the same, which means that they are well-laid out and easy to use. Nothing radical here. In fact, anyone driving the Tracer for the first time (even if they have never seen a Mazda) will have no problem operating any of the controls or understanding any of the instruments and lights.

Front seat room is about the same as any other subcompact. Head room measures 38.3 inches and there is a maximum of 41.5 inches of leg room. The two front seats have adjustable headrests and reclining features and the driver's seat also has a two-way lifter and lumbar support feature. Back seat leg room, as usual, depends on how far the front seats are extended. But even all the way aft there is still a minimum of 34.7 inches. A little more foot room is squeezed out by having the front seats mounted on wide tracks. An interesting rear seat feature is that each rear seat back can be adjusted to three back-angle positions. Reclining back seats are a fairly new development and are not available yet on all new cars.

Once in and adjusted, the driver should have no problem driving the Tracer. Its small size - wheelbase 94.7 inches, length 162 inches, width 65.2 inches, height 53inches and curb weight of 2,185 pounds - combined with an expansive glass are a, makes for easy maneuverability and gives the driver a good command of the road. There is an overall tightness to the suspension and even though Mercury makes no claims the Tracer is a sports sedan, the handling is quite good and predictable. The four-wheel independent suspension features MacPherson struts all around and steering is by a rack-and-pinion system. The P175/ 70R13 tires seem a little small at first but they apparently do the job.

Powering the Tracer is a 1.6-liter/97-cubic-inch four-cylinder engine with an overhead cam and electronic multiport fuel-injection. This engine is rated at 82 horsepower at 5,000 rpm and 92 foot pounds torque at 2,500 rpm and supplies plenty of juice for the Tracer. (If this engine sounds somewhat familiar it is because it is basically the same as in the Mazda 323 station wagon that was recently tested in this column.)

The test car was equipped with the optional three-speed automatic transmission that worked just fine and didn't appear to hurt performance. There was plenty of snap for acceleration, passing and mountain climbing. The only drawback for this transmission over the standard five-speed manual is that it does run at rather high rpm over the highway. At 55 mph it is cranking over 3,000 rpm. The five-speed with its overdrive fourth and fifth gears will provide better highway mileage. And if you are doing most of your driving in town and on short hops, there probably won't be any difference in fuel mileage between the two transmissions. If you plan to do a lot of highway driving, you had better give some thought to the five-speed. As it was, the test car averaged 23 miles per gallon for city driving and 29 mpg over local highways. Certainly not bad for an automatic.

Mercury claims the Tracer was designed to reduce operating costs and this is welcome information. Some of the features do-it-yourselfers will appreciate are see-through reservoirs for brake fluid, engine coolant and windshield washer fluid; easy to find dipstick for engine oil; a fuse box with spare fuses and fuse fitting tool; single bulb replacement for headlamps and taillamps, and an engine diagnostic monitoring and warning system. Also, the design of the engine compartment allows easy access to service components, including spark plugs, ignition distributor and air cleaner filter.

Cost saving features include reusable valve cover gaskets, automatic foot brake adjustment, lubricated-for-life front suspension ball joints, steering ball joints, constant velocity joints and rack-and-pinion steering. Also, the automatic transmission requires no periodic fluid change under normal operating conditions and no scheduled band adjustments.

Base price for the Tracer four-door hatchback is $8,364 and includes many standard equipment items and a nice level of trim and appointments. Full price on the test car came to $10,088, which included a destination and delivery charge of $309. The three options were automatic transmission, $412; air conditioning, $688, and the Preferred Equipment package, $312. The last item certainly seems to be a bargain and includes power steering, speed control, upgraded tires and upgraded AM-FM electronic stereo/cassette.