Evening star., 1925-08-01
pRODUCTTON
REGISTRATIONS.
Includes Canadian production.
Present Conditions in Trade.

LHcluQcs O6ndOldH DTOuutticH
Present Conditions I'm Trade.
OF course, conditions are very diff
ferent than they were a few years
ago. Prices are being cut, costs are
being cut, less money is being spent
on advertising and selling, there are
fewer changes in models, consolida-
tions are taking place and various
other factors are developing which
are unpleasant TO many people. On
the other hand these changes are
mostly for the benefit of the consun-
ers and should ultimately be good for
the industry. This all Signifies that
the business is becoming stabilized.
What was once luxury has become
a necessity, and what was once a
fad is becoming a staple. This means
that there are smaller profits, but
that the business is on a much sound
er basis. The fact has also been
proven that "once an auto, always
an auto" which insures repeats and
replacement orders.
Autos Last Seven Years.
Consider the fact that about 1000
600 people are being born every year
in the United States and the aver
age life of a car is not over seven
years It will be seen that the re
placement automobile business. has
great possibilities. 1t is said that GER
tain companies are almost able to
pay their dividends merely from the
sale of parts and other accessory
lines. Therefore, the industry is here
to stay and is gradually getting on
a sound basis.
OF course, there will be many
more consultations. There is no
sense in having so many different
makes of cars. Gradually these will
be brought together and there will
be fewer companies, resulting in re-
duced selling and advertising costs,
which are now a great FACTOR.
Outlook for Automobile Stocks.
The above comments apply to the
industry and not to the stock market
Our Investigations are in connection
with the manufacture and distribution
of automobiles. Therefore we, per
haps. should say nothing regarding
the securities of the companies. ],
however wish to make this comment;
namely, that it is very dangerous TO
consider automobile stocks as
group. Each individual stock must
stand on it's own basis. Some will
go to higher figures. while others will
decline to nothing
Many of the keenest bankers be-
lieve that automobile stocks, taken as
a whole, are too high at the present
time, and l am inclined to agree with
this diagnosis. On the other hand, if
the expected consultations take
place, the surviving companies should
profit greatly thereby. The automo
bile industry Is a good deal like the
copper Industry. Both industries. as
when investors bet on any one com
pany they run considerable risk.
Instaliments Tie Up Money.
The most dangerous factor in the
situation today is the tremendous
purchase of cars on installments. This
seems to be inevitable and doubtless
is a development which will always
continue in the industry. These in
stallment purchases, however, have
resulted in the tying up of a lot of
money, which is not healthy con-
dition, so that some automobile COM
panieS are doing almost a banking
business without Federal or State su-
pervision. This installment business
Is the cloud in the automobile in
dustry today and on account thereof
some companies may have much
trouble ahead.
1t is a new business, which means
there Is still lot to learn and hence
some must suffer during the process
of learning. Experience Is very valu-
able, but. like most valuable things, is
very costly. Even though this install
ment business Is necessary, history
shows that IN the early days of any
good thing 1t Is always pushed too
far and overdone. This lis the weak
est feature in the automobile struc-
ture at the present time
Auto Truck Industry.
In the early days the automobile
industry consisted mostly of pleasure
vehicles, and these, of course are
now the backbone of the industry.
Then the manufacture of trucks de-
veloped, and today the horse is very
largely displaced; but. thus far the
truck business has never reached the
proportions expected. The most
lucrative field at the moment is the
auto or motor coach industry. The
White Motor Co. Of Cleveland should
be given the credit for putting this
business on its feet. They were fol-
lowed by the Mack people and the
Pierce-Arrow Motor Car Co. and sev
ersl other companies. Then the
Yellow Cab Manufacturing Co. OF
Chicago took 1t up, which company
is now being taken over by the Gen.
eral Motors Co.
without doubt the auto bus or
motor COACH" as it Is now called, is
destined to become a great factor in
TRANSPORTATION. Not only Is it the
salvation of street railways adopting
1t, but it also will be adopted for it's
assista nee to steam railroads and
most Inerca ntile houses.
Other Features of Industry.
The automobile industry has done
very much more than manufacture
motor vehicles. 1t has revolutionized
our highways and has created a great
road building industry of which man
never before dreamed. It. has de-
veloped the oil business to proportions
which the Reeks<slaers. In their most