May 4, 1981

In the 1960's, when gasoline was cheap and highperformance cars ruled the roads, songs were written about Pontiacs. In fact, a tune by Ronnie and the Daytonas extolling the engine of the Pontiac GTO rose as high as No.4 on the pop music charts in 1964. But emission controls and vastly more expensive gasoline ended the high-performance era and cost the Pontiac Motor Division of the General Motors Corporation the youth image it carefully nurtured through the 1960's. ''For awhile there it was almost unpatriotic to drive a performance car,'' said William E. Hoglund, the general manager of Pontiac. ''That made it hard on a division identified with performance. As a result our image became diffused as we tried to chase the cars that were successful.''

Europe's auto makers are encouraged by Japan's moves to cut car exports to the U.S.: They think this will make it easier or their governments to extract similar concessions from Japan. (Page D1.) Utilities are rapidly expanding into nonutility ventures to broaden their earnings base. But diversification raises questions about regulation of the subsidiaries and whether their earnings should be applied toward lower bills for utility customers. (D1.)

European auto makers welcomed Japan's decision to reduce car exports to the United States, saying they were now more optimistic that their governments would press for similar cuts and that Japan would agree. ''The United States is setting the pattern for Europe and it's a pattern the Japanese industry understands and will accept,'' said John Weinthal, a spokesman for the British Society of Automotive Manufacturers. ''It's a good agreement for the U.S. and an important precedent for Europe,'' was the reaction of a spokesman for Renault, the French state-owned car and truck manufacturer. Officals at the European Economic Community said that they now hoped that Japan would agree to a similar pact with the 10-nation trade bloc, even though Japan's 11 percent average share of the community's auto market is only half the 20 percent market share that Japan enjoys in the United States.

An increasing number of New Yorkers have taken to the streets with flashlights and walkie-talkies in volunteer neighborhood patrols against crime. Encouraged by the police, neighborhood groups cruise in their cars every night or walk their blocks, spurred by the fear of rising crime and reductions in the police force. The patrols, most of which are in Queens, Brooklyn and the Bronx, have more than doubled in the last year, according to city officials, who estimate their number at 10,000. Men and women, teen-agers and elderly people, lawyers and mail clerks share the duty.

President Reagan's chief economic adviser, Murray L. Weidenbaum, says there is no reason to expect the planned build-up of military spending in the next several years to cause a new surge of inflation. This assertion by the chairman of the Council of Economic Advisers, in an interview earlier last week, is part of what appears to be a widening debate about the Reagan proposition that Congress can pass a three-year tax cut, vote for bigger defense appropriations and still be confident that inflation will slow appreciably in the next few years. So far, the debate has been couched largely in terms of aggregates such as total spending, the size of a tax cut and the size of the economy. But a second line of criticism is also emerging: that any shift of resources from civilian to military use tends to drive up costs and the general price level. Some Reagan economists heatedly dispute this view.