New-York tribune., 1922-01-08

change of design. And its maker is
the only low-priced automobile builder
in the world who is not now hampe red
by the used car problem. Practically
the same thing is true of the car which
is recognized as the finest in the world
1t has been improved to some extent
during the last decade. but not greatly
in comparison with other leading and
expensive makes. Here again the used
car is not difficult problem with the
maker.
Between these two extremes we have
hundreds of makes, domestic and for
eign. where each builder and each
group of dealers are beset by great
sales resistance, greater resale resist
| ance. the annoyance Of constant
changes in design, huctuation in price
, lists, excessive service costs, the eX-
pense of high salaried statesmen and
aggravating production troubles; all of
which tend to reduce profits to both
makers and dealers and keep the users
oil these cars in state Of more or less
dissatisfaction.
Too Many Makes
1t is generally conceded that we have
too many makes Of cars, and it would
be good thing for the industry and
the public if the present business slow
down would wipe a few of them out of
existence. But the unfortunate thing
about the present situation is that a
number of the manufacturers who have
stood up for more than two decades
and always produced very excellent
machines are now facing greater imam
cal difficulties than some of the new
comers.
AS we look, however, at the old
timers who are now on the rocks it
/ is not hard to see what has driven
them there They have failed to keep
up with the public demand, possibly
because they could not see the ap-
preaching change in some cases. and
in some other cases because they did
not want to see it. In two or three
notable instances the founders of these
old institutions have passed away and
the properties have fallen into hands
which were not either capable of main
tanning the old standards or creating
new ones.
These failures, however, mean very
little to the automobile industry, eithe r
as regards its present or future. There
are many brilliant men left in the in
dustry, who will now begin to build up
cars which meet the present day stand
ards, and, what is more important, the
present day market.
This market has changed completely.
1t does not require a smart young
man who is just coming into the in
dustry with new thought to see it,
but to figure the market to a nicely
and be ready for it does require a
genius. The new producer who can hit
the nail on the head and get away
from the start with the sale of his en-
tire output has great advantage over
the long established producer, who,
| after REORGANIZATION and change of
plan, policy and product, is still forced
to carr a ,oad of ancient dead wood.
1T is natural to assume, on first
thought, that q majority of the dozen
or more producers, who are just stick
ing their heads above the fence, will
have the time of their young lives tc
get over the fence, but at the end of
the year l think We shall see a few
of them at least surviving, possibly
prospering. and we shall also see few
of the older concerns, who are still
bucklng declining market for the
type of car which they are trying to
sell in the face Of determined public
opposition, out Of the business.
The total car production for 1920
was approximately a million and a
half, Of which one maker produced GO
per cent, leaving 40 per cent of this
total divided among about 100 makers.
Although 1920 does not pass in his
tory as particularly poor year 80 far
as volume of sales goes. it is a fact
that production and sales costs were
so high that practically none of the
made any money; certainly none in
comparison to the same number of
sales in other years.
+ 1t is estimated by ono of the in
dustry's most accurate statisticians
that the passenge, car production for
1922 will be about 1.80O,0 900, of which
one maker will produce more than one
million. Even though the year 1922
does not witness a complete revival of
business, it would not be difficult, per-
maps, tor the car distributors to dis
pose OF this total of new cars without
counting upon any "first car buyers."
with car registration in the United
States reaching close TO ten million,
the number of car owners who will
turn IN their old machines for new
ones should distribute more than a
million and half of new cars.
The Trading-in Factor
1t must be remembered at the same
tune that the sale of a million and q
half new cars involves the Grading
=" " Pi 0CIiCAlIy tne same numD Der of
used cars, because 95 per cent of the
new car sales to-day carry the taking
in of a used car by the dealer maldno
the sale.
Last year more than 30 per cent of
the new car dealers throughout the
country made profit which Just bal
anced the value of the used cars thew
had on their floors for sale in the fall
The value of these traded-in models
had then declined to such an exten,
that the banks vho finance the dis
trlbutors and dealers refused to lena
any money on these stocks. Since rna,
situation arose the traded-in car prob
lem has been the greatest obstacle con.
fronting distributors and Is now one
of the greatest obstacles the manufac-
turer of cars in 1922 has to meet.
With more price cutting coming on
it is inevitable that dealer factory dis.
counts cannot be increased; neither
will it be possible for the manufacture
ers to allow any more special dis
counts on new: car sales involving
trades. Last year one Of the large
manufacturers, who is credited with
doing the biggest business in the his
tory Of the corporation, allowed q sps-
cial discount on such sales. The re-
suit was that this corporations deaY-
ers did an enormous business until
they began to market their "traded-in"
machines. Then they were suck.
Since the market has boiled down
largely to one Of "replacements," that
Is, Of buyer who trade in old cars for