Los Angeles herald., 1910-03-06
PROFIT IN AUTO
MAKING SMALL
LARGE INVESTMENT YIELDS A
SMALL RETURN
Advertising Bills of Leading Manufac-
turers Run Into Fortunes
Each Year-Tests
Expensive

A manufacturer Of motor cars who
recently announced an advance in the
price of a certain popular model stated
that the profit on the car had been
only S37. To some people who fancied
that high prices were charged for au-
tomobiles in comparison to what it cost
to make them this came as a great
surprise. and perhaps some received
the statement a little incredulously.
But when one knows the cost of mar
keting an automobile in these days Of
scores of reputable makers, under
stands all the machinery that works
behind the finished product to bring
about its final delivery to the pleased
purchaser, he is apt to view the sales
prices of cars in a different light. one
may wonder this season how manu-
facturers can offer cars at such ex-
tremelv low prices and fully appre-
ciate how exceedingly high prices are
secured for some makes.
Probably there are departments in
the average high grade mandatory
that the unintiated prospective motor
ist never dreams drumming expenses
that mount into thousands of dollars
which he is not likely to know much
about For in the great American
manufacturing industry, which is as
the point of dollars involved in fin
ished product as well as the number
of cars produced, the competition IS
keen. Automobiles do not "sell like
hot cakes" They are not even sold
by advertising, makers say, but by
demonstration
Advertising Is Big Item
Of course advertising is one of the
big items in the manufacturer eX-
pense account. Thousands Of dollars,
even hundreds of thousands of dol
lars, are the yearly appropriations for
this purpose. Pages and double pages
are taken in publications where the
cost is as high as $1,000 page. and 1t
is a rule of the wise advertising man
not to use such space only once, but
to follow it with advertisements of
equal if not greater size.
This is the general advertising in
which the best general magazines for
the purpose are selected. There are,
besides, numerous automobile publica-
tions which it is found of advantage
TO use regularly. or frequently
throughout the year. There are the
newspapers of the country to be con-
sidered. and one knows at show time,
when the copy" is gathered together
I'm such profusion, how important a
part the daily paper plays in the ad
Vertising mans calculations. Many
cars are advertised from day TO day
in daily papers so that ever the name
of the machine will be before the eyes
of the reader.
As said, makers do not expect to sell
cars by this advertising. They know
that it is necessary in order to keep
the name of the car before the public.
Tt is important that when a man
thinks of buying an automobile and
asks for demonstrations that he will
have in mind the car that the manu-
faeturer or his dealer wishes to sell
him. The more prominently this name,
and the more favorably 1t can be
brought before the future purchaser,
the more likely is he, first of all, to go
to the agent Of that car for demon
stration-sometime with his check al
ready made out. Then it is the agents
business. through his trained demon
strator- salesman, to show the pros
pect" that the "Get-there-mobile" is
the best car on the market.
A FaIIacious Slogan
The prospective buyer may some
times be confronted with the slogan, |
I'VE do little advertising and so are
able to sell this car at a much lower
figure than makers who spend hun
dreds of thousands of dollars every
year that way" Sounds reasonable, !
but when one sees this sentiment en-
bodied in advertising literature, or
even an advertisement in a pubica-
tion, he is apt to appreciate the fallacy
of it. Cars cannot be largely sold in
these days without extensive advertis-
Ing, and cars that are not sold extern
siVely cannot be made cheaply, and |
well, in small quantities. Investiga-
tion will show that the company try
ing to sell automobiles will, first Of all, !
it can afford it,
But if a prominent one, advertising
is by no means the only big expense |
item. In the first place, before a new |
car can be successfully launched |
thousands and thousands Of dollars |
must be spent in experimentation !
Few manufacturers prosperous today |
have become SO in less than two years |
of advertising existence. The ex- |
perience behind the car is a debt that |
must be paid by the purchaser. It |
has been said wisely that the automo- |
bile manufacturing business is a haz- |
ardous one to enter because il cannot |
be foretold at the start how much |
money will be needed to put a salable |
car on the market-fOr nowadays the |
car must be good 10 sell.
Reliable factories contain one room |
at least marked mo admittance," !
which is an expensive thing to main
tain, but very necessary. 1t is fitted |
with spring lOck, and there are but |
two keys-one is kept by the chief de-
signer. the other i'm the company's |
safe in a sealed envelope. OF course,
this is the designing room where the
chief designer, aided by a corps of
draughtsmen work the year around.