Evening star. [volume] (Washington, D.C.) 1854-1972, 1921-11-20

admittedly cannot continue IN
what concerns us most today is an
analysts of the nature of the demand
for cars during the next five years.
Obviously there Is a limit beyond
which registration totals will Increase
slowly. II at all. I have no wish to
join the ranks Of prophets who have
price reductions to below pre-war
levels already have moveds the the
oretical saturation point further
ahead. On the basis of Industrial
history for the past ten years we
can, however, deal with the subject
In an indirect way.
Scrappfng OF Cars.
Under normal conditions about
500. 900 cars would be scrapped dur
ing the calendar year 1921. while
registration totals would be increased
by about 100000. Industrial depres-
sion has stimulated the repair busi-
ness. however. resulting In a lower
replacement, and a consequent boost
in registration totals through the sale
of the current years production.
ION the LIST of last January over
5000, 900 motor vehicles were in use
in this country. Absorption of the
current years production. coupled
old cars. will bring registration totals
on December 81 not far from the ten
million mark.
What does this mean? 1t means
that we'll over 100000 motor vehicles
will have been added to the total
the worst business depression we have
witnessed in a decade. 1t Is evident.
therefore. that there will be grad
ually diminishing. but none the less
steady, increase in registration totals
for the next few years. 1t Is not at
all improbable that the total, of cars
in use will reach the 12,000.o00 mark
within the next few years. How far
1t may exceed this figure in the future
is a matter for speculation only, but
assuming that the eive.miiii9n
near future, and taking six years as
the average life ef a car in service.
it can be seen that about two million
cars per year will be required for
replacement to maintain registra-
ton of twelve million cars.
1T has been estimated that the pro-
ductive capacity of American auto
mobile manufacturing establishments
is about 100000 cars per year. Ca
pacity production for protracted peri
DDS of time is not always feasible, nor
is it business necessity. 1t is not
reasonable to assume that during any
given year in the near future every
automobile plant in America would
find 1t POSSIBLE to turn out maxi
mum production during an entire
twelve-month period. Certainly all
of these plants will not need to oper-
ate at an absolute maximum the year
around in order to show a profit.
Therefore. 1t appears feasible to as
sumo that an annual production of
not more than two million cars would
permit profitable operation of all
is in the near future, and the clearcut
ence in this country.
Export Trade Possibilities.
NO consideration has been given to
export trade possibilities of the flu
ture, nor have we estimated the final
point beyond which registration totals
will not increase. Our interest now
is in the near future. and the clearcut
evidence before us shows two facts
rather clearly:
"(1) That the great majority of cars
made during the next four or f1ve
years will be required to replace
those worn out each year.
"(2) That replacement alone in the
near future will more than care for
the normal production of all well
organized companies now engaged In
motor vehicle manufacture.
Coming down a little closer to I'm :
teresting to note that over 100000
motor vehicles will have passed their
sixth year Of service at some time
during 1922 If the expected upward
reaction in general business condi-
tions becomes a reality. this means
that more than one and one-half
million cars, including the replace
ment of old cars overhauled and kept
an extra year in service in 1921. will
be needed for normal requirements.
No such total has ever before been
required to take the place of scrapped
cars, thus indicating that the annual
market for new cars is changing over.
New production is more and more
going to replace the old. Barring an
unforeseen continuation of business
stagnation a car production for 1922
greater than the total output for 1921
will be needed to take the place OF
worn-out cars alone. II we assume
a limited sale to new car owners. and
a modest export outlet. there Is rea-
son to assert that the productive
capacity of the industry will be very
profitably employed during 1922.
Few Failures Recorded.
| "A noteworthy feature of the AUTO
! mobile business during the past twelve
months has been the comparatively
small number of failures in so grea,
an industry. 1t would be uhwisef al
! this time to assume that we are safe.
/ ly by the period of danger. but those
failures which may come in the neal
future are properly chargeablt