Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-07-07
OPINIONS DIFFER
ON MOTOR OUTLOOK
Feeling Paramount That In
dustry Has Gone Too Far
in First Half Year.

DETROIT. Mich. July 6.--Opinions
differ widely as to the outlook for the
automotive industry In the last six
months of 1929. a subject which is
receiving a great deal of discussion at
the present time. according to 3. H.
Cram, industry authority.
There is paramount q feeling that
the industry has gone too far in the
first half year, both as regards sales
and production. Sentiment follows
the line of thought that the market in
absorbing a record number of cars has
exhausted its possibilities and that the
demand from this time forward will be
a sharply declining one, far below the
levels established earlier in the year.
Production. it is said. has been main
tanned at a rate entirely out Of pro-
portion to even the record sales volume,
with the result that the industry is
heavily overproduced and a sharp cur
tailment will be necessary to clean out
the stocks of cars now on hand. let
alone the necessity of abandoning the
aggressive schedules which have been
In effect earlier In the year.
Does Not Fear OverprOduction.
: In the opinion of Mr.. Cram, the dan
ger of overproduction at the present
time is greatly exaggerated.
Accepting this premise, the problem
of production can be disregarded, for It
Is unlikely that output in the forth
coming period will be greatly out of
line with domestic retail and export
demands.
The whole matter rests, as seen by
Mr.. Cram on the question of whether
or not the record sales of recent months
have exhausted the public's consump-
ton power. First Of all. In the face OF
ordinary conditions the market Is
capable, so far as is known. of con-
Stunning far more cars than have been
sold in any previous year. Accordingly,
the consumer market during the next
six months Is potentially able to buy
as many and probably more cars than
in the corresponding periods Of any
previous year.
However, before It can be definitely
said that such will be the actual tre1'i
and capacity of the market, it Is neCes-
sary to examine those factors outside Of
tive or negative effect on new car sales.
Briefly. ali of these factors can be COM
bined into one classiflcation-buying
power.
Factor In Buying Power.
The automobile industry in itself Is
a powerful factor in the creation OF
domestic buying power. Being as 1t Is
one of the largest ultimate consumers
of raw and semt-finished materials and
one of the largest employers of man
power, its effect on American business
is not overestimated. Accordingly, the
high rate of operation which the In.
dustry maintained in the earlier part
of the year brought prosperity to a
taS1 IF Industries and IN
untold numbers of individuals. The
buying power thus created through this
prosperity comes right back into the
automobile industry. giving the whole
course OF, business the aspect OF a bene-
fetal circle.
What is there at the present time In
the American business picture to sug-
gest that this circle has been broken2
Basic industries are sound. Steel out
MT despite some seasonal trend Is still
high. Carriers are prosperous and the
agricultural situation, while not at It's
best. is fairly strong and should release
a flood of buying later in the year.
Industry has not yet felt the pinch OF
restricted credit. with plenty of money
available and no indication Of any
unusual tightening in the near future.
IN other words, business generally Is
in as Fundamentally SOUND c cor 1,asr
The ability to buy has not been cur
tailed and certainly the desire to buy
has not diminished.
Actual purchases of new cars have
admittedly declined somewhat In the
last 80 days. That is no cause Tor
alarm. Likewise sales will continue TO
drop during the remaining months and
that fact as well does not in any sense
of the word imply impending disaster.
A seasonal trend, apparent IN every
other wear of the industry's history. VIII
unuuestionabIy make its appearance
this year. But at the same time the
volume Of business for the remainder
Of the year can quite logically be thor
oughly in proportion to the operations
N the first six months OF 1923.