Plentywood herald. [volume] (Plentywood, Mont.) 1908-current, 1929-10-17
Issues Warning
Against Overpro-
duCtiOn of Cars

Toledo, OhlO,-Annual boosting OF
production schedule on the part OF
automobile manufacturers has result
ted in the entire industry being fac.
ed with a serious problem, which mol
only threatens the welfare of the
automobile dealer, but if a halt is not
| called, may affect the entire bust
MSS and economic structure of the
industry. This was the substance OF
a statement made by l.. A. Miller
President Of the WHY'S Overland
Company, here today.
"The industry is faced with a ser
ious problem" said Mr.. Miller
year after year motor car manufac-
turers have set their production
schedules at higher figures. The
company that produced 100000 cars
last year had set its mark at 100000
FOR the current year. If last years
sales totaled 100000, the goal for
this year was set at 400 900, and so
IN. The ability of the public to alb
,orb an indefinitely increasing num-
Der of cars is costantly over-estima-
ted. AS a result, from the first
month of this year, we have seen au-
tomobile plants running at record
production. Dealers have had cars
ihipped to them in excess of the pur-
chasing power of their communities,
creating a problem of meeting loans
from banks and finance companies.
Long trades, with the selling of cars
at net loss to the dealer, is the result.
And dealers find that while they have
lone an increase volume of business,
their profits have dwindled or losses
Aave been sustained. The used car
problem of today is the direct result
Of this policy Of over-building on the
part of manufacturers.
"And" continued Mr.. Miller, "this
has been done on the theory that in
creased volume meant decreased
costs. Up to a certain point this
IS correct, insofar as manufacturing
economies are concerned. But the
theory fails when the volume is not
maintained. Sale forces are expand
ed and plants equipped and fooled
and materials bought to carry out
these increase ed production sched-
ules. In the closing months of the
year, manufacturers usually find the
market unable to absorb the amount
Of cars they intend to build. Out
out is curtailed, with the result that
at the end of the year a considerable
lesser number of units have been ac-
tually built on which the average
overhead expense has taken a deci-
ded upward trend and materially af-
fected the producers profit per car
for the year."
That WHY'S Overland, with the
Dealers interest in mind, intends to
be the first big producer to apply
Corrective measures and to adopt a
policy which, he predicted. would be-
come the practice of the industry,
was the assertion of the WHY'S Over
land president.
"This year, we will produce in the
neighborhood Iof 100000 cars. We
do not plan to increase this total
next year. We believe it is the con
servative number of cars our dealers
IAN move without the need Of forced
selling, improbable trades, excessive
used car stocks, and with turnover
in their capital to assure a sound re-
turn on their investment at the end
Of the year. We will keep our pro-
ductive capacity absolutely flexible,
50 that as dealer outlets increase, and
resulting increased retail demand
warrant expanding u output, we
can do it promptly and efficiently.