Omaha daily bee., 1915-08-08
WHY AUTO PRICES
ARE ON DECLINE
Enormous Production and Standard
ization Of Manufacture Forces
Reshsping This Market
CARS ARE AS GOOD AS EVER
nv GEORGE l.. SULLIVAN.

ny GEORGE l.. SULLIVAN.
A striking feature OF the past spring
has been the sharp reduction in the prices
of several leading makes of automo-
biles. Manufacturers who have been
keeping watch Of tendencies in the au-
tomobile market-on the theory that it
was, in a way, barometer of consumer
demands-must have speculated at its
rapidly changing aspects.
Briefly phrased. our old friend. sat
uration Point, has been issuing his rules
and regulations. Automobile manufact-
urers who have created large plants and.
by liberal advertising. have laid the
ground work OF prestige for a big future
output cannot let go. II they cannot
sell a class car at class price.
they must forget their pride Of place
and go where Iisiness is.
do not think there ever has been an
opportunity like the present one for man
ufacturers to watch, right out in the
open for all to see, the vital play and
interplay of the forces of market maxi
ing.
About a year ago, at the time the
cyclecar threatened to invade the auto
mobile market, very shrewd observer
made this remark;
THE trouble with us in this country
Is that we began to build automobiles
at the top OF the pyramid Of prices. The
little section at the top of the pyramid
was quickly filled. Then makers began
90 realize that the nearer they approached
the base OF the pyramid in prices the
wider they increased their angle of
duction of 500 OF 500 In any model they
made 1t possible for a constantly in
oreasing proportion OF Americans to pur-
chase automobiles"
Automobiles since their first manu-
facture, or more correctly after period
covering two OF three years Immediately
following the inception of the industry,
have had q constant tendency TO drop
in price The betterment of the product
has kept constant pace with tbs down
ward trend In prices. so that today II
is possible to buy an automobile fully
equipped. with everything that the owner
may desire, at about one-third the price
he would have been asked for less per-
feet product even five years ago, and to
which he would have had to add as ex-
tras. and at an additional expense, such
ometer, etc.
With every succeeding season the pub
Ito asks itself how much lower the auto
mobile can go and stu be worth buying.
Enormous production and Standardization
of manufacture have been largely re-
sponsible for the reduction in prices. II
it obvious that when q manufacturer
turns out 10000 units ell exactly alike.
hta
tertals and labor are very low In COM
parison to similar charges aeaint any one
of a number of models. -
This multiplicity of models was the
cause a few years ago Of nearly wreck
ing one very large manufacturer who
was very well known. When the reor-
ganization committee took hold OF the
proposition they insisted that the num-
Der. OF models should be reduced from
over sixty to twelve. Today that con-
Germ Is in a moro heelty sound condition
than ever before
The reduction of prices this year has
made q very deep impression on the
buying public. A car that has been SELL
ing for two seasons at t1.O7b has been re-
duced TO $50. Il Is identically the same
car. Another model selling at $3.50 has
been reduced to S1.s5O. This, too, Is iden-
tically the same car as at the higher
price. This reduction has been dupli-
Gated In many instances.
The question must Inevitably arisa IN
the mind Of the man who paid 8. ESQ AZ
TO whether or not he had furnished the
manufacturer, distributor and dealer an
Unjust profit And this question NAV
be tTuthfuIly answered no." because
at the time he purchased his car the
cost OF production at the factory was
Droport1onAtely higher than at the pres
ent tina
every thinking man at the present time is
this' What Is the significance OF the
present reduction In price ana what win
Dc it, effect In the purchase of an auto
mobnef The first significance Of Il
has been touched on above, L O, the
ability Of the manufacturer to produce
At less cost and his willingness TO give
his purchaser the ability to buy a better
product at less cost
Probably the next siRnifieance ~ .,
Is the effect it will have on the second-
hand car market. The dealer will suffer
some intrinsic lack OF profit. perhapa
not IN percentage but In actual money
which viii force him TO efforts toward
a greater sale. At the same TINA Il
VIII mako him very cautious about
taking in secondhand cars as partial
payment for new cars. This win re-
suit In the owner OF a secondhand car
being dissatisfied with the deal offered
him by the dealer and he win decide IN
many instances to run his present car
another season at least
on the other hand. It will bring into
the market great host Of people who
have long desired to own an auto
mobile and who now find II within their
power TO purchase new. car. In other
words the angle Of the pyramid win
nave progressed near enough it's base
TO have included them in its purchasing
power.
This has been shown already. There
is New York dealer, who. about April
~ was entirely out OF cars. The product
OF the factory had been exhausted. a OIL
lowing this, there were weeks without
any cars to sell. Then came the new
models, much In advance OF the usual
date OF introduction The result was