The news scimitar. (Memphis, Tenn.) 1907-1926, 1920-09-25
Once Rich Mans Toy.

900 families whose incomes exceeded
$4,000. That it would be seriously
considered by the 100000 families with
4 incomes of from $1,000 to $4,000 was
gravely doubted; and, at an early stage
of its development, even the suggestion
that the 100000 households with in
comes of from $4,000 to $1,000 could buy
and support cars was 'conclusvely
proved to be impossible"
Yet look at the registration figures
in the United States today-in excess
OF 7,OO0,0 600 cars-and you see the fall
lacy of all the early figures and con-
illusions.
Taking the most carefully estimated
figures at present available, all fami-
lies with incomes of over $4,000 amount
to the comparatively insignificant total
Of $50, 900; and even by adding to this
the families with earnings. OF $4,000 to
$4,000, we get not much in excess of
100000 family units who might own
automobiles, If such incomes were the
limit of possible ownership. 1t Is true
that we must take into consideration
limited number of families owning more
than one car, including individuals with
Independent incomes, and add the taxis
and trucks of the country, which would
make quite respectable total; but, to
offset this, we know that a substantial
number of the families represented in
the foregoing figures do not own even
None car.
r. 1t is, therefore, apparent that we
must locate over half of the motor cars
with families or individuals whose es-
timated cash incomes are $4,000 or less;
and IL correct, this opens up possibili-
ties of auto sales running into very
high figures, especially with the rapidly
increasing ratio of earnings per family
The writer we'll recalls an interview
4 with r. E. Odds, nearly two decades
l$hgo. This pioneer automaker asked the
writer for quotation on 100 sets OF
32x21a Inch tires. The proposition was
NYnv TtnNT
Mr.. Odds, you meyer made rs autos,
mo" said r. e. O., but I'm going
to throw aside all the 'frills that my
engineers have devised, sand take the
successfully for 16 years, put it into
100 runabouts, and sell them this year"
He did it; and the little buggy like
runabout, with handle or steering rod,
sold like wildfire, not only in the United
States but the world over.
Remembering how even the most as
tute calculation by the lay mind can
underestimate the possibilities of this
remarkable industry, it would seem the
part of prudence for even the careful
analysts not to feel too sure of the flu
ture results that may be achieved.
We may, however, with reasonable
reservations, examine some figures and
comparisons bearing upon present con-
ditions and the perspectives of the past
and future.
Importance of Popular Price.
Figures show that possibly 80 per
cent of all cars made. are produced by
seven of the popular price manufactur-
ers-Ford, WHY'S Overland, Chevrolet,
Dodge, Buick, Studebaker, Maxwell
hence, from present indications it ap-
pears that, for some time to come, the
duced in sufficient quantity to run a
great chance of saturating their mar
ket, even though it may be limited by
income or buying power to compare
lively small proportion of the auto-buy-
ing public. In this connection we
@assabuld also consider the tendency of
gross incomes to increase, and that the
habit of an auto owner, when changing
models, Is to buy more expensive car.
Although the problem of the higher
priced car is well worth considering
and watching by all interested, 1t is
not of such outstanding importance as
:. that of the popular-pri field.
OF less Importance in dollars and
cents is the possible overproduction or
underproduction Of the commercial car.
with more active truck manufacturers
listed than those turning out pleasure
cars in any quantity, and with the
market yet in the formative stage, over
production in the not far distant fu-
ture may possibly result. However, the
potential market Is very large, although
1t is somewhat difficult to estimate how
soon it can be made an actual buying
market by intensive methods of devel-
opment. greatly assisted by graphic IL
lustration of the benefits and the prac-
tical use of truck transport as illus
trated during the war.
Demand and Supply.
The potential and present field for
tractors land aeroplanes) is in an anal
ogous position. although in much
exaggerated degree, to the truck sit
uation, In other words, although their
potential market may be great, the
present demand is, limited and neces-
sarily somewhat slow of increase, so
that much educational work is neces
sary to persuade the prospective buyer
that the article is practical and will
fill his particular need and that he can
not well do without 1t.
1t is, therefore, the part of wisdom
for manufacturers, as well as investors
in the commercial car field, to make
very sure that their product, manage
ment, finances, and, above all, their
markets. are carefully analysed and
proven to be adequate.
The overshadowing problem in the
motor industry is that of demand, sup
ply and the saturation point in the field
covered by the pleasure cars whose
price appeals to the masses In this
class one manufacturer alone advertises
Nsl1is capacity as one million cars, which
constituted. two-thirds of the increase
OF registration of last year, and about
one-seventh of all automobiles in use
in the United States. The product of
this manufacturer alone was an impor-
tant factor in bringing the average
d price of all autos sold in the United
Estates in 1917 to about $500, which low
Vpoint may never be reached again.
When we consider that the competition
In this class is intense, and that prac--
tically all the bigger aggregations OF
production and capital are making, or
planning to make, the low-price cars
in quantity, the situation in this field
Is seen to be one of great moment to
the industry investors and others.
AS the stock of some of these compa-
MES are widely distributed, their stand
ing and future are of considerable pub
lie Importance. To illustrate their dis
tribution: The president Of one Of these
large corporations (whose stock is list
ed on the New York stock exchange
disclosed in report that over 90 per
cent of the stockholders own not over
30 shares each, and only 26 per cent
own over 100 shares OF common stock
This corporations latest financing was
TO build a new plant, the payroll for
which when complete will, 1t is esti-
mated, be over $l7,0OO,OoO annually,
with purchases OF materials of around
SIS. 600 900 and an added output to the
companys capacity or, possibly, 300
automobiles day.
What is the absorption capacity of
Ntlie country on these cars for me peo-
pie" and when Will production In
creasing at the present rate, overtake
and pass this demand point and leave
the auto market heavy" from the sup
nly OF s'undigested" machines2
As previously stated, there are In the
future many unknown factors (Which
might upset any positive deduction,
such as a further increase in the
,noaitt ~ avara 0a income of tina noten-