Evening star., 1932-01-08
NEW AUTO DEALER
POLICY IN EFFECT
Manufacturers Aid Retailers
in Maintaining Sound and
Efficient Offices.
Hv the Associated Press.

DETROIT, January S.-One of the
lessons the motor car industry seeming. .
ly has learned from the experiences OF
the last two years of restricted produc-
ton and distribution Is that major
part of its success depends upon the
strength of its dealer organizations.
All along the line efforts have been
made to place dealerships on SOUND
foundation and to provide from the fac
tory organization help to dealers where
needed to enable them to operate on
profitable basis.
Prior to the sudden termination OF
motor car industry's boom period IN
1929 dealers were left pretty much
upon their own responsibility. Ihey
were hedged about somewhat, OF course
with franchise requirements, but 1heir
financial affairs were their own con-
Germ and if they failed to survive a
highly competitive period in merchan-
dising their product they merely drop
ped out and were added to what the
trade called dealer mortality"
New Policy.
During the last two years, however,
a new policy concerning the dealer or
ganizations has been evolved, growing
out of the conviction of automobile
executives that the industry as whole
cannot prosper unless the dealers ana
distributors proper. New accounting
practices, new merchandising, selling
and advertising plans are being pro-
vided to the dealer by the factory or
ganization. In short, the production
division of the industry has begun to
take a greater interest in the final link
between the manufacturer and the pur-
chaser of automobiles.
Available information indicates that
instead of resenting the interest OF the
factory organizations in their activities
dealers have welcomed it and have CO.
operated in bringing about closer
unity between factory and retailer
Aside from other considerations auto
mobile manufacturers have come to
realize that only sound dealers are able
to obtain banking support from their
local financial institutions.
Latest official figures on automobile
retailers show there are at present ap-
proximately $4,000 licensed dealers In
the United States. This is something
like 10000 fewer than there were In
the Fall of 1929.
Replacement Demand.
Another changed viewpoint that has
taken rOOG III bIle nlIlQS Ol ulOGOl Cdl
executives is that in the future the in
dustry must look almost exclusively to
replacement demand for its market
The world registration Of automobiles
at the end of 1880 totaled 35,603,00O
vehicles and of this number 26,523,77s
were listed in the United States.
While motor car builders disagree
thoroughly with any suggestion that the
industry has saturated its market, they
admit that its future actively rests sole
ly on the replacement of worn-out
vehicles 1t possibly was with an eye
to the advent of this condition that
rigidly controlled production became
one of the new policies of the industry
late in 1929.
Sales executives find little cause for
encouragement in the realization that
replacement demand alone must provide
the future market for automobiles. Most
of them point out that the arrival of
that period has been foreseen for some
time and that the industry has been I'M
dergoing basic changes in preparation
for it.