The New York herald., 1921-02-20
OUTLOOK FOR 1921
GOOD, SAYS DEALER
Interesting Forecast Considers
Business From Various An
giles Of Importance.
BY WALTER A. WOODS,
President of the Automobile Deale,

FfcStdent or the Automobile Dealers
Association.
A forecast for 1921 is harder to make
than for any previous year, but there
will be good business for good cars In
ratio to the amount of prestige you have
with your customers. but we must have
sound merchandising policy. Busine ss
is going through period Of readjust-
ment, and until a balance is reached be-
tween prices that ara asked for manu-
factured products and the income re-
ceived by actual producers we cannot ex-
pect settled conditions. Farmers. live
stock raisers, miners, &C.. are the only
producers Of actual value and we can
not obtain from them more than they re-
ceive. These producers are now receiv-
ing 80 per cent. less for their efforts
than they received year ago, and to
show how far reaching this is 1 will
quote from competent authority who
says that the combined income OF the
people OF this country in 1919 was sew
enty-five billion dollars, OF which twenty
five billions was received by farmers
&c, and the other fifty billions by the
balance.
The twenty-five billions Of farm in
come now totals not over fifteen billions,
and most Of that is tied up in ware
houses. for the farmer is reluctant to &C.
cept present prices; but eventually he
will do so and this great volume Of
money will be turned into the channels
OF business. When wheat was $2.75 a
bushel a farmer could buy a. hat costing
$3.50 for two bushels Of wheat; with
wheat at s1.65 it will cost him three and
a half bushels. A suit OF clothes that
could be purchased for eighteen bushels
or wheat now costs him thirty.
The farmer has refused to sell at
prices offered. has put his products In
the warehouse. cleaned his old hat and
repaired his old suit, and the manufac-
turer of these articles will do the same
to his automobile until the value of farm
labor and manufacturing labor is more
nearly equal
All this commenced several months
ago, and we passed the low mark in
October. since which time there has been
slow bat sure Improvement which
should reach its peak by April 1, and 1
look for exceedingly good business from
now on.
Another.phase that we will go through
this year will be the replacement Of
cars which have been discarded or
eliminated. These figures show that ever
since 1899 twenty-five years) there has
been a steady and almost systematic in
crease in the production of automobiles,
with the single exception of 1918, when
our factories were turning out imple-
ments of war.
Another surprising fact is that the
number of cars eliminated each year
usually equals the production of the
sixth previous year and is further en-
phasized by the fact that the production
or the intervening five years invariably
is equivalent to the total registration of
automobiles in the United States. For
instance, the production OF 1916. 1917,
I9lS' 1919 and 1920 is equivalent to the
fnt
duction for 1915, 1916, 1917, 1918 and
1919 is equivalent to the registration
for 1919.
In view of the fact that these statis-
tics have held true for period of
twenty-five years, during which time we
nave passed through several panics and
O. world war; it is only reasonable to
assume that predictions based on these
statistics will be fairly accurate.
IL these figures hold true we can as
sumo that in 1921 5S2.617 cars will be
needed for replacement purposes. bur
owing to the fact that this will be the
nrst year that replacement figures have
exceeded the 100000 mark, it will be
very interesting period for students of
statistics. l speak only for the New
York territory.
For 1921 l honestly expect that every
dealer selling a product of merit can
equal his 1920 business in the number
OF cars delivered. Whether his income
in the same depends upon his merchan-
dizing policy and his business policy.
Dealers should not carry too large A
stock of new cars on hand--a two
months supply should be the maximum
at any time. Used car stock must be
more carefully watched this year than
ever before. owing to the large num-
Der of cars needed for replacement
which will call for an increased volume
of trading. Don't overload and don't
take in cars that are not in good run
ming condition. 1t costs lot of time
and money to convert junk into cash
and then you rarely get back what you
put into it.
Bear in mind that prices OF every
thing are receding and consequently
your overhead and other expense must
also come down. One year from to-
day your expenses should be at least
20 per cent less than what they are
now and the quicker you get them
there the better.
In conclusion, I cannot help but touch
on the subject OF service to the owner
I do not mean an intangible something
that tho owner thinks he is going to
get for nothing, but definite policy
OF making sure that the owner gets
what he pays for.
A satisfied owner comes back for
another car and brings his friends with
him.