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THE 1988 Mercury Tracer is the best little Mazda Ford Motor Co. evermade. The car’s nameplate says Tracer. Its guts say Mazda 323. Itsdesign and overall execution say “Made in Japan.” But its shippingpapers say it was assembled in a Ford plant in Hermosillo, Mexico.

Ford, part-owner of Mazda Motor Corp., says this confusion representsthe Tracer’s “international heritage.” Sounds nice. But what the melangereally shows is Ford’s drive to get the best small car possible at thelowest possible price.

Ford is not alone in this industrial soap opera, in which a parent ofone product also is a parent of another sold by an apparent competitor.There is, for example, the Chevrolet Nova — actually a Toyota Corollasold by General Motors Corp. and made by a hybrid GM/Toyota company inFremont, Calif.

There also is Chrysler Corp., whose executives say Japaneseautomakers compete unfairly in the U.S. market. Chrysler car dealersdon’t complain as loudly. They’re too busy selling Chrysler’sMitsubishi-made products, such as the Colt subcompacts.

It’s bottom-line time in the auto industry, particularly in thematter of coming up with competitive small cars. The company providingthe best rides at the lowest cost wins. That means inter-competitoralliances and scrounging for, ah, inexpensive foreign labor.

A good deal for U.S. consumers? If the Tracer is an example of whatwe can expect in terms of value and quality, the answer is “Yes.”

But is foreign-sourcing of small cars good for the economic health ofAmerica? I dunno. You’ll have to choose sides.

Complaint: My stupidity. I left one of the Tracer’s four doors ajar,which meant that all of the car’s interior courtesy lights (one on eachof the two front doors and one overhead) burned many hours. The batterydied.

Praise: A really good, well-equipped subcompact car. Mazda’s fetishfor super-tight fit and finish shows in every corner of the Tracer. Evenunderhood, the car is put together nicely. The welds virtually areinvisible. The hood’s underside heat shield is cut and fitted withprecision. Seemingly innocuous things. But they are selling points formany car shoppers.

Ride, acceleration, handling: Comfortable small-car ride. Good forcommuting and on short journeys — say, 200 miles roundtrip. Frontsuspension is fitted with McPherson struts and helical coil springs.Rear suspension also uses an independent strut/coil spring arrangement.

Acceleration is good, although the Tracer is a bit whiny in quickbursts from about 15 mph to 35 mph, after which the whine disappears.The Tracer holds its own at reasonable highway speeds. But don’t pushit. It’s equipped with the Mazda 323’s 1.6-liter, fuel-injected,four-cylinder engine that puts out 82 horsepower at 5,000 rpms. Noracer.

Handling is good on wet and dry roads and in icy slush.Front-wheel-drive and Goodyear Corsa GT tires, mud-and-snow version,take the tension out of running the Tracer in inclemen t weather. (IfBridgestone tires show up on your Tracer, don’t worry. The Bridge-

stone M+S is just as good as the Corsa GT.)

Head-turning-quotient: Innocent, cute. No slick stuff here.

Sound system: AM/FM stereo radio. Basic-level Ford factory. No raves.

Mileage: About 30 to the gallon (11.9-gallon tank), mostly highwaydriving, running with two occupants and with heater operating most ofthe time. Optional three-speed automatic transaxle on test model mighthave reduced mileage.

Estimated price as tested: $9,300, including optional airconditioner, automatic gearbox and automatic speed control. Tracers goon sale in late March. Ford officials said that base Tracers, two-doorhatchbacks with manual gearboxes, will start at about $7,926.