The Washington herald., 1922-07-02

CALLED BEST AID
TO AUTO DEALER
Commerce Department
Chief Warns of Exag-
gerated Report Evils.
NEED SOUND BASIS
Reports and Estimates Should
Be Accurate and Ger
tain.


mates OF possible sales of automo-
tive products in foreign markets Is
strikingly shown by NJ. H. Hoepli.
assistant chief OF the automotive
division of the Department of Com
merce, in an article in the forth
coming issue OF Commerce Reports.
contract or agreement in which
a dealer takes upon himself the
obligation of disposing of a certain
number of a manufacturers cars, Is
an instrument serving as guide to
both parties concerned, says Mr..
Hoepl; for the manufacturer 1t
represents a basis for future pro-
duction; for the dealer 1t serves as
a norm by which he gauges his
sales efforts. BY it's very nature
the agreement should thus result
in benefit to both of the contract
ing parties; IL it works to the det-
riment of one OF them the agree
ment is faulty.
Unsound Contracts.
Years of extreme commercial
fluctuations, such as 1918, 1919, on
one hand and 1920. 1921 on the
other hand. are likely to witness a
maximum Of unsound contracts and
their detrimental results. In 1918
and 1919 the dealers in American
cars could sell all the cars they
were able to obtain from the manu-
facturers and in order to obtain
a certain number of cars they be-
came used to asking for a multiple
of this number. Consequently. sales
estimates were exaggerated and
sales agreements inflated" In
1920 and 1921, the years Of defla-
tiOn and depression. the manu-
facturers. in order to deplete their
inventories held dealers to their
contracts with a result that most
of the latter suffered considerable
financial hardship and many of
them went into bankruptcy.
In 1922 the consequences of the
past four years experience make
themselves felt. The dealers who
were chiefly responsible for the
overestimates and unsound con-
tracts, are placing conservative es-
Inmates. However. the results of
the most rapid Improvement in the
home market already reflects itself
in the attitude of the American
manufacturer. The reasonable. in
many instances perhaps overpessi-
mistic. estimates of the foreign
representatives are severely criti-
cized and frequently burdensome
contracts are forced upon them
even at the risk of losing well es-
tablished dealers. or at least their
good will.
Several such instances have late
" come to the attention of the au-
tOmotive division. In one case
which may serve as an illustration.
an American manufacturer. who
was about to introduce his new
medium priced car in market,
vent so far as to request that a
very successful dealer of highest
standing. and with an excellent
sales and service organization back
of him. pledge himself TO sell a
number of cars over twice as big
as the highest mark ever reached
by a well-esta bliShed competitive
lear of the same class. The situa.
rion is the more noteworthy as in
the face of most favorable offers
from European manufacturers. this
dealer has remained singularly
faithful to American motor cars
and tires. While thus the undoubt-
edly most desirable dealer refused
to be forced into contract to
which he could not who1e-heartedly
subscribe, the manufacturer was
relying upon a number of solicita-
tions for the agency Of this car
from parties which were willing to
meet his conditions. A careful in
vestigation on the part of the local
representative of the United States
Department of Commerce. who is
highly regarded by the automotive
industry. showed that these offers
came from parties that had either
no standing whatever. or no pre-
vious experience, or no capital to
back them up. or no selling and
servicing organization. What would
the results have been. had the
agency of the American car been
accorded 10 one of these promising
prospective dealers?
Let Dealer Advise.
The lesson is plain. The past rec
ord Of a dealer is more important
for future business than promising
estimates. II a dealer has been
successful in the past. his sugges-
tions should be followed, although
they may seem over-conservative.
as he knows his territory better
than the manufacturers.
p.aHzfp1 fha StorLs 90 cr,,d. Ill