Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-17
AUTOMOBILE TRADE
| OUTLOOK IS BETTER
Producers Expect Gradual
Upturn in SaIeS-Inven-
tories Reduced.
BY DAVID J. WILKIE.
Written for the Associated Press.

DETROIT, July 17.-While the au-
tomobile industry does not lack cause
for encouragement and sees signs that
it has put the worst Of the business de-
preston behind it. motor car makers
long ago abandoned any idea that the
return to normal conditions would come
with sudden acceleration of buying
All Of the industry's executives are
confident of satisfactory results during
the last half of the present year but all
believe slow but constant accumula-
ton of buying orders rather than q
fourth quarters Of 1881.
The industry, of course, continues to
count heavily upon the huge backlog
that has been piled up by the restric-
tions Unemployment and other depres-
sion factors have placed upon buying
At the same time. it is not forming any
illusions about the manner In which
the dammed-up buying will be released
1t will not be an avalanche by any
means. the industry's leaders say. On
the contrary. they look for Just a break
ing loose of small part Of the jam at
a time.
Rapid Expansion.
Ultimately, however, the entire lam
will begin floating slowly downstream
again and the industry will be ready to
meet the increasing demand upon its
production facilities One of the easiest
things the automobile industry does is
to expand its production equipment
One authority has attributed much of
1fxy h.
TO the fact that at that time it was
equipped to make 100000 vehicles q
year. II turned out some 100000 and
found 1t had swamped the market.
Reducing It's production girth has
been an entirely different problem. The
industry has found it necessary to cut
drastically not only into employment.
put INTO factory inventories, and the
process has been a slow one. The re-
moval OF excess weight now has been
virtually completed. There may be- here
and there. some further production
economies to be effected, but generally
speaking the industry reconditioned it.
self along the lines of maximum eff.
cheney and minimum weight.
Some interesting conjectures are in
spired by registration and production
figures for the current year. Official
statistics show that the Ford Motor Co
passenger car registrations in the United
States in the first five months of this
year. year ago in the corresponding
period it provided Al per cent of the
new-car registration. Chevrolet in the
nrst flve months produced 522 .2a2 units.
II the ratio is maintained and there
seems to be little doubt among motor
car executives that 1t will, Chevrolet will
nave accounted for more than one-third
OF the years total output when final
production figures are announced for
1881.
Manufacturing activity continues un-
der restraint, being governed largely bv
retail demand. One or two factories.
understood to be planning a Midsum-
mer shutdown between now and Au-
gust 15 have kept production UP. largely
through the necessity of stocking deal
ers ahead. Others which recently
brought out new models have profited
by the dealer demand rejecting the re-
suits OF vigorous advertising campaign
: preceding the introduction of the new
types. The experience of the companies
| that have introduced new models this
Summer. most authorities believe. is
bound TO be duplicated later this year
when other makers bring out their 1882
types.
Inventories Held Down
Dealers inventories have been held
down. in keeping with the policy of the
industry to build only as many cars as
are necessary to meet retail demand
Stocks at present in the hands of the
distributors are understood to approx
innate 100000 units, compared with
$4,000 year ago and $4,000 in 1929.
There probably will be little, if any,
further shaving down of the dealers in
ventories. for the current figure is re-
garded as close to the desired balance
between factory and retail customer.
The figures on dealers stocks testify
to the strides the industry has made in
strengthening the dealer organizations.
Except for isolated cases. sales execu-
tives say, there is little danger of re-
tailers being forced out by having too
much capital tied up in stock that can
not be readily liquidated.