Brownsville herald. [volume] (Brownsville, Tex.) 1910-current, 1928-02-08
TEXAS DAILY PRESS LEAGUE
Foreign Advertising Representatives,
Profitless Prosperity

Have the automobile manufacturers reduced prices
too much? Many Of the leading manufacturers in
other lines contend that while this will probably be
g record year for automobile sales, the car manufac-
turers are due to experience a year of profitless pros
perity.
B. c. Forbes. commenting on the situation, says:
Admittedly, many automobiles will be bought
this year, especially in the lower price ranges. bs
have prices been so drastically reduced that most
manufacturers will experience %profitless prosperity
How so much can be provided in the way of human
transportation for so little money battles the layman.
And as a matter Of fact, some manufacturers contide
that they themselves have misgivings concerning their
prospective net profits. Each year sees a decrease In
the number of automobile manufacturers. The outlook
is that 1928 will bring unusually heavy mortality-un-
less weaker companies arrange to consolidate. The
profit margin per car was never so slender. This does
not apply only to the lowest-priced makes.
zone significant development this year is the Pro-
viding Of cars for widely different prices by mFnutac-
turers who heretofore kept within a narroys prize
range. Today the same maker offers a car we'll below
a thousand dollars. The dazzling success Of General
Motors has inspired this course. il emphasizes the
increased severity of competition.
"Perhaus the best thing which could happen Tor
the industry and for owners Of automobile securities
would be a discovery by Henry Ford that he has put
too low q price on his car. Were he TO add, say $50 TO
his price. his principal competitors probably would
gladly do the same. II will not in the long run proIt
the public TO have manufacturers cut one anothers
throats. Live and let live proves the pest poIcE W
ALL"
There is food for considerable thought in the auto
mobile situation. That many Of the largest manutac-
turers will this year sell great numbers OF cars at eN-
ceedingly lew prices is apparent. 1t is true the puohc
will benefit to some exent from the low prices out
they would receive more permanent BENEFITS II tAs
cars wre sold at prices that represented a reasonable
profit to the industry. Competition such as is now EVIL
dent in the automobile industry does not tend to pro-
duce a healthy situation in national business. Profits
are essential il any business is to be maintained ana
whenever any great industry, through competition or
other causes. becomes proftless, all industries ana
business of the nation feels the reaction
The frank opinion Of leading industrialists = that
the automobile industry. impelled by sharp competi-
.ion. is giving too much value for the money Inc
American people are not averse TO paying a far price
for a good value They recognize the fact that every
industry must make profits in order 10 exist ana
there would be no general complaint If the automobie
manufacturers advanced their prices to the point
where they would be assured a reasonable margin Of
nrofit. The industry has assumed a Leading posi-
lion; any loss it may sustain would react adversely
TO the business and financial interests Of the entire
nation, and the price-cutting war will not tend 20
either strengthen the industry IS a whole or aid IN
promoting national prosperity.