New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-01-14
HIGH PRICES
A REAL HELP
Public Buying Stimulated
by Them, Says
Rueschaw
SHOW PROFITS ON
CARS SMALLER
What Makers and Dealers
Feared Is, After All,
an Advantage

"The very thing that has proven to
be the best thing that ever happened
TO the automobile industry came IN
threatening guise, and, believe me, J.
had us all scared stiff for time,
says K. G.. Rueschaw, sales manager OF
the REQ Motor Car Company.
81 refer to the necessity OF tiltlnR
prices, with which we, in common with
all other automobile manufacturers,
we're confronted few weeks ago, ana
which menace has not yet disappeared
by any means" continued the REQ sales
manager
when, some months ago, IL became
apparent that if prices OF materials
continued to soar 10 would be neces-
sary for all makers 70 increase prices
of the finished product, we we're mighty
anxious about the outcome.
Nobody hailed the prospect with
delight the dealers least Of all. They
were convinced 20 a man that price
increase would be fatal. They we're
certain the demand would drop of TO
nothing. When told that unless con-
ditions changed radically and soon, the
manufacturers profits would be wiped
out and prices would have to go up,
they preferred TO handle the cars on
a smaller discount basis rather than
to risk an increase of list price.
"Here entered in factor OF which
doubt the average buyer was con-
versant, namely, that dealers discounts
on automobiles of standard makes had
long since been cut to the limit. IL is
very much less than it is on articles
such as furniture, pianos, farm lmple-
ments and other staples. Consequently,
the sacrifice the dealers were able TO
make in that direction was wholly IN
adequate TO meet the conditions. There
was only one way out and that had 70
be taken at once.
"Prices of both materials and labor
did continue TO go up, and since 1t was
a condition, and not theory, with
which manufacturers were confronted,
one after the other bowed TO the in
evitable, and the public saw higher
prices announced all along the line
the press was full of them.
Then a strange thing happened. In
stead Of the demand dropping off, as
we all had anticipated, the automobile
business has enjoyed one of the biggest
booms in its history.
"This last December was the biggest
December we have ever known. 1t was
more like May.
"Analyzing the situation. it seems
this was due TO three things: First, the
prevailing prosperity, which enables
many people to buy even at the ad-
yanced prices who were not previously
able to buy at all; and, second, expert
ehce had taught buyers that the only
time to get a prompt delivery is in the
winter. When the spring rush sets IN,
early in February, 1t means weeks, even
months, of delay-with a shortage OF
al. standard makes of cars at the end.
But the third reason, and the phase
about which started to speak, and
which | think is the best thing that
ever happened TO the automobile IN
Gustry was the fact that the public be-
came aware all at once, and for the
first time. that automobiles are actual
ly made and sold on a smaller percent
age of profit than almost any other
commodity, not even excepting the
staple foodstuffs you buy in the stores.
And. inasmuch as 80 per cent of buyers
are engaged in some line Of business
themselves, they know market condl-
tions, and so they anticipated still
higher increase in materials, still
further advance in the price of auto
mobiles was to be expected. So they
rushed to get under cover while there
was yet time.
Previous TO this demonstration most
people had believed that the automobile
business was a kind of hip-hoorah, big
profit, extravegant, champagne flavor
kind of a game They hardly recog-
nized it as a serious industry-Just
game Of easy come, easy go.
"Now, we in the industry knew that
nothing was further from the truth
than that surmise, and we repeatedly
said so in our advertisements-but who
believed it?
Here was a condition that was con-
vincing, however.
Men in all lines Of merchandising
know how serious il is TO increase
price. They know that, as q rule. II is
fatal. These readily made the deduc-
ton, therefore, that automobile manu-
facturers must be increasing prices
only under the stress of conditions
that they were otherwise unable to
overcome.
"The net result has been to place the
automobile industry on a frmer foun-
dation in the minds of buyers and to
prove TO them in the most conclusive
way that you do actually receive a
higher percentage of value for your
money in the purchase of motor car
than in almost any other commodity.
eve REQ folk have so far steadfastly
held out and refused to advance prices.
This is not to say, however, that we can
continue to do so. though | will say
that it is our policy to hold to present
prices just as long as the quality can
be maintained and the product can be
made without actual loss.