• U.S.

Business: Motor Business

3 minute read
TIME

Motor BusinessSince last May nine out of ten U. S. businesses have boomed. Automobiles arc just one of the nine. But how big the car boom has been few people realize. Last week were published June production figures of the National Automobile Chamber of Commerce showing 195,000 cars turned out (compared with 95,000 in June 1932). Ford is not a member of the auto C. of C. So Ford’s estimated output of 55,000 cars brings June 1933 production up to a round quartermillion. In spite of the fact that automobile production lagged behind 1932 until last April, production for the first six months of this year was (including Ford) 1,000,000 cars compared to 870,000 year ago. Steel, cotton and some other industries have had comparable booms but buying of steel and cotton has in part at least been speculative—buying ahead to forestall expected price rises when rapidly maturing industrial codes go into effect. In automobiles, contrariwise, dealers have piled up no stocks. Production of automobiles has not increased faster than cars actually have been bought by the public. The automobile boom has been begotten wholly by consumption, need not be discounted as partly speculative. To prove that the automobile boom is real and not rash, General Motors reported its shipments of cars abroad 45% greater than in the first six months of 1932, its shipments for June 127% greater than in June a year ago. And the increase of the company’s foreign sales affected its English-made Vauxhall and Bedford cars, its German-made Opel and Blitz cars as well as its U. S. products. A further hint, not yet statistically confirmed, that automobile buying is returning to normal is in the percentage of cars sold on instalments. In a normal year 60% to 65% of all new cars are sold on instalments. The National Association of Finance Companies figured out that in 1932 only 54.6% were sold on instalments —men uncertain of their jobs, fearful of pay cuts, disliked committing themselves ahead, preferred to buy for cash or not to buy. For the first few months of 1933 instalment sales were estimated at only 52%. In recent weeks, however, there has been greater confidence and some finance company men believe that instalment sales will soon be back to normal— 60% or better. But if and when the automobile business gets back to normal it will not be the same automobile business it was in 1929. In 1929 (based on the registration of new cars) 75% of U. S. automobiles were made by the big three: Ford, General Motors and Chrysler. On the same figures for the first four months of this year the big three made 89% of U. S. cars. A smaller and smaller percentage of the market is left for the little manufacturer. Equally significant: whereas in 1929 Ford sold 34 out of 100 U. S. cars, General Motors 33 and Chrysler 9, in 1933 General Motors is selling about 50 out of 100, Chrysler 20 to 25, Ford about 20. Henry Ford is no longer making the pace for the U. S. automobile business—he has slipped sharply while General Motors and Chrysler have sprinted sharply.

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