The Washington times., 1937-04-19
MOTOR
PRODUCTION
INDICATED

II the fundamental conditions
prevailing in January and Febru-
airy were maintained throughout
the year the normal annual de-
mand for automobiles in 1887
would be the highest on record,
according to the Alexander Ham.
ilton Institute.
An output Of 100000 cars
would be required to meet such q
demand. This would compare
with an actual output Of Ass, 600
cars last year. 1871 900 at the low
for the depression in 1888 and
$3.50, 900 in 1929. the previous high
record.
The actual production Of auto
mobiles during the first two
months of the current year
amounted to 744,000 cars, as
against $4,000 cars in the same
period last year, an increase Of
14.1 per cent. This gain, how
ever, was not sufficient to lift pro-
duction to the level Of this years
normal demand as indicated by
basic conditions during the first
two months.
Bigger Output Needed
This normal demand called for
an output of 901 900 cars, or 1877
900 more than the actual produc-
ton. This curtailment below the
indicated normal demand may be
accounted for to a large extent by
the interference of labor troubles.
With such troubles now on the
wane, the output of automobiles
should rise above the normal de-
mand level before the seasonal
peak is reached this spring, the
report said.
If the indicated normal demand
is maintained and automobile buy
ing holds up to this normal, the
usual recession in output after the
spring peak is reached will be mod.
crate this year, and it will be fol-
lowed by a smart recovery in the
fall. 1t is questionable, however,
whether fundamental conditions
will continue to be as favorable
during the remainder of 1887 as
during the first two months and
consequently whether the normal
demand for automobiles will be as
large as is currently indicated.
In the first place, the institute
stated, there is the possibility that
the gain over last year which the
national income has shown so far
in 1887 will be modified. In the
second place, the currently indl-
Gated proportion Of the national
income which will be spent on au-
tomobileS may prove to be less as
the year progresses as the result
of a less favorable relationship de-
veloping between the national in
come and the general price level.
Prices May Rise
In the third place, there Is a
good possibility that automobile
pIlCCS WILL NC AokcCA' Az Woo ROAAAS
ed out. AS the result Of wage in
crease and a sharp rise in the
price of steel, important cost fac
tors in the manufacturing Of an
automobile are now higher than
in 1929, while automobile prices
are below the pre-depression level
If the normal demand proves to
be lower than that indicated dur
ing the first two months, a rather
severe recession in output after
the spring peak is reached is a
good possibility, with only a mod
crate recovery at the end Of the
year. This possibility is enhanced
by the fact that automobile buy
ing may be subnormal in 1887 as
the result of an excessive demand
in each of the past three years
It will consequently not be sur:
priSing, the report concAaded, II
the annual output of automobiles
in 1887 fails to reach the record
high figure indicated by condi'
tions during the first two months