The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1922-06-24
AUTO BUSINESS IS ON F|RN|ER
BASIS, SAYS ROGER ". BABSON
PRICE CUT IN CARS AND SUPPLIES
AND BUILDING OF BETTER
ROADS FACTORS IN
IMPROVEMENT
Business Has Graduated from Bxperi'
mental stage and Has Become
Great Settled Industry

Wellesley Hills, Mass, June - lspe-
rialJ In discussing the general sltua-
ton for the week Roger w. Babson'
the statisriCian. today made the follow
ing analysis Of the Automobile INDUS
try:
MANY persons have been surprised
AZ the recent rebound in the automobile
Industry auI IN the price Of automobile
srruri!jes Those. however. VINO nave
hcau carefully watching TIE situation
ARE moi surprISrd. The price cut III aC-
run1obilcg developed new buying; the eH-
tension of the good roads movement IN
creased ln" point Of saturation; ana INC
reduction in he cost of tires ana ee"-
crnl supplies encouraged more pc"plo ~
MO cars Tie man who has never nal
any car now drives one; and the man
who VA; contented with one ear no"
has two or three. No. the $atural'oh
rnInl has not yet been reacheu. M"ie
over as our system Of good roads Is OK
tended this SatUration point IS pushc'i
further and further away. The saturl-
tin,, r,tut for automobiles in this coun-
r., :, III moi he reached until our sys-
,or nf highways has been completed
and perfected , .
"Thc great factor. however. when IS
,oday making business for I'll" automo-
h.,c cor,nauirs is the silent and INSIST
ant purchasing CT parts" BY the pres
ont users Of cars People have no iuc'
Of the tremendous business existing 90
day IN ,rtOnCSrr Parts. 1t is CcncrH'F
.st;,,,a. ed that 7uou; ten billion do!iai
Is invested in automobiles ana the'r
accessories II Is further eSt'H'a'e'
ha, "A man spends about per cent
wear on repairs and that large pro.
norton Of this fCr new parts ma"
htNNh
hundred million dollars Of automobile
Ir.Irc.s rcr wear exists in the manu-
r,c.ur, md sale Of new parts for cars
.,Ir,,,l, sold Net only Is this large
,,,nrut ( money. Tut there Is as mhch
,o. ,rnf,i in 'i:S business rs In doNhI''
~. .rrh!r the Sar.c amount or au'o'i'""' -
huvincss. If you have any DOUBT OIL
his take the parts cata!og ior any
,.,r and add un what It would cost 10
L,,,. OH Of tho parts of the car separate
rly Not only are the companies gett'"e
L;c, rrfccs for these parts. but thcIe
;c ,r,,ttrallv no expense connected WIN
me selling Of these parts. "heh pu'
,ur a comnletc car l may bnY from any
ono of n hundred companies Out VIZ
I,uyinc = part 10 one OF m! pleasnt
cars ] must buy OF the company
r,orur,ctures tho car. Sale or these
IS br!DsllG Il'A' w.
NAMES a tremendous income
Strong Assets
"1rvns.ors will therefore sec that the
autonohile business has graduated lEoNh
iho governmental stage and has pecome
. rreat settled industry, at least SO iui
80 tho older company Is coi''ct"
The good will asset Of every CUISINES"
ehouId increase as years go "''' P'"
,.jdad IL manufactures honestly use
mi nroduct Tho older automoplie com
roniae. however. possess the a"dltlona'
= scot of hcin-. able to sell parts Tot eN-
listing cars. ,io, could
Many Of these companies .nat-
nov. ,hcir dividends. certainly 'hr'r
nrcrcrrcd dividends. from inc pfo's
from, sale Of parts. If Ford nln not
,nonnr,c,urc another car. he could 40
tremendous business for years 10
no,,c :, Manufacturing parts Tor tho
cors already sold. If tho saturat'"n
vain, ia ever reached in the automopHe
business. The profits from the replace,
vents Of machines and the sale VI
no--s Will mill he tremendous
! "Os course. new automobile COM
-,,,f.s do mot possess this asset. Hence
, Conservative men purchase only me
stocLs NJ the older and more staole
,arc.r,s Wise investors also look
carefully % The capitalization. peA'ie
huyinr an automobile stock. divide the
Capitalization by the annual output
10th IN cars and in dollars. certain
ronuIor makes of cars are over capi-
,oIized. and certain companies WIN
email outputs have very conserVat've
Capitalization. Therefore, one shouio
onsidnr both the output and the cap'-
toI,za ton. Neither factor by itselt -
sufficient in Judging an automoo''e
stock
.T WIN, To emphasize Dartculariy'
concluded Mr.. Babcock. Tho TACT that
,hr automobile Industry IS today per
mancnt industry and that the securities
n tho standard automobile companies
should rank with those Of the steel
comnon!es. Moreovcr.-'n view or inc
foreign competition which the stee,
romnanies will soon havc-1 shou'o
even hn inclined 20 soil certain steer
securities and invest the proceeds In
seasoned automobile stocks.
In spite Of str!kes-a ctual and threat
cncl-sprcral business is holding It's
own Tho index Of tho Rabsonchart
shows activities ut 1T0c below normal