Evening journal., 1922-05-01
AUTO INDUSTRY
NOW RANKSFIRST
p. S. dupont Gives Interest
ing FactI About Motor
Car Production
CREDIT SYSTEM
TO HELP BUYERS

3 ufacturing Industries of the United
states in the wholesale value OF the
finished product; or that the Cen
erll Motors Corporation is the larg-
est institution In the automotive in
dustry.
l. The automobile is the largest
unit of merchandise sold today for
cash to the individual consumer be-
-cause the selling and advertising
force behind the marketing of auto
mobiles has outstripped the progress
= OF the credit machinery available
rfto the industry" according TO Pierre
S. dupont. chairman Of the f. L.
DUPONT de Nemours G. Company.
n Mr.. dupont. who is president OF
General Motors Corporation, re-
Gently addressed a letter to the
|. $4,000 stockholders OF General Mo-
tors. which in part said:
The automobile Is the largest
unit of merchandise sold for cash
: to the individual consumer.
I'm the early history OF the indus
Y try. as there was no parallel TO fol-
low. motor makers could not profit
by the credit merchandising expert
ence OF other manufacturers. To
!. day the merchandising OF the auto
mobile is upon the threshold OF tran
sition from a cash TO a credit basis.
: similar to that through which has
passed the merchandising OF nearly
every other product.
THE selling and advertising force
j behind the marketing OF autom obiles
haa 90 he NJ q
credit machinery available TO the in
Y dustry. To supplement the credits
which local bankers have extended
TO the automobile industry. a group
Of specialized financing companies
entered the field and they have done
pioneer work in credit merchandis-
ing.
The General Motors Acceptance
Corporation was organized three
years ago under the banking law OF
I the State OF New York.
AT this time Of year the desire
4 TO buy automobiles is stronger and
the demand by individuals for credit
accommodations is greatest. Ac-
commodations under the Gmao Plan
are available only to those who
measure up to proper credit stand
ards. Our stockholders are all con-
y'cerned In the financial success OF
VI General Motors. ! am directing at
} tention to the Gmac Plan OF fnanc-
Ling. which has been and will con-
tinue TO be instrumental in aug
menting sales, in order that the
y.stockh olders may fully appreciate
this important part OF our merchan-
dising system. with a clear under
standing OF this I am confident
stockholders can and will cooperate
in stimulating sales OF our cars,
trucks and other products"
"A Certain fundamental conditions
Mr.. DUPONT says. are peculiar to the
merchandising OF the automobile.
and demand specialized credit and
banking service. The conditions may
be grouped as follows:
Factories. to build the very best
| products and sell them for the low
est possible price. must operate AT
a uniform rate the year round; but
| the retail sales OF automobiles are
greater at certain season than AT
| others. In the spring. when the re-
| tail sale Of motor cars in greatest, |
. il would be impossible for the man
ufacturers to produce sufficient cars
| To meet the demand. In order, there |
. fore. TO manufacture at as even
rate as possible, products must be
stored during the season OF lower /
sales. awaiting the season OF greater
sales. The burden of storing motor 4
vehicles falls upon the distributor
I and dealer. Sufficient storage space /
would not be available at the fac
tories. or, II available, the vehicles
would not be near enough at hand
F for the dealer when his market
opens up.
The development of the merchan-
dising methods for motor vehicles TO
Include sales on credit is logical and
| the practice is growing Of retailing
on deferred payments; portion
Idown and the balance distributed
over a subsequent period. Provided
The credit is extended on proper
basis this practice becomes natu-
raj development Of the market tor
motor cars.
Purchase by dealers for the pur-
nose of stocking cars and the pohcy
Of selling on a deferred payment
plan requires larger financial re-
sources than the average dealer
nossesses. He must look to other
sources for the necessary funds.
The local banks are not equipped to
handle the specialized credit re-
|oulrements involved in automobile
financing.
General Motors Corporation recog-
)nizing that its manufacturing divi-
sion had been hampered by the fac
tors enumerated. organized the GEN
eral Motors Acceptance Corporation.
The Gmac wholesale and retail
plans for financing sales of General
Motors products are available
throughout the United States, Can
ada. Great Britain and Ireland. In
addition. through It's foreign de-
partment. the operations extend TO
every part Of the globe where motor
cars are used in quantity.
Here Is an example OF how the re-
tail plan operates. A man buys a
new 5-passenger touring car for.
SAY. s1625 and pays s625 cash. The
balance of $1,000, plus the charges.
he pays in. say ten equal monthly
payments. The Gmac differential,
towering interest. investigation. col
lection and service charges, would !
ne SIS. The purchaser therefore
signs a note for s1O56. payable in ,
ten equal monthly payments of ,
|if05e0 per month. The deferred =,
payments are made by the pur- ,
chaser direct to the Acceptance Cor