Show 1 ii FACTS FOR MOTOR MOTOI MOTORCAR CAR BUYERS I. I I. I t 4 t r N No 2 t. t 4 Jt 1 t. t 0 1 f v i I s 1 l r i Facts no not ot are o opinions n ans are the e foundation an and basis o of a all enlightened knowledge Here are some facts t tv concer concerning ruin automobile values ues an and prices races which explain and J why an how bow ow St Studebaker debaker offers low ow prices aces f i f an and high i quality u in n its car cars 1 I. I t AXa dJ w I r t b t I l I 1 f The Automobile mobile cost jos of the worth orth of 01 which tJ the 90 ar are assemblers and 1 10 0 t w par e as assembler only e manufacturers c l asing stores etc ete are much less per car carin The ati automobile is IS tat the he highest type of moving must buy and on which he must still in ln in the true sense of the term tenn This in In th the e ca case e of B ing ing g vehicle either drawn or self self- self propelled P ro It a add dd a goo good d substantial 1 profit of his own means that consumers are paying 23 premium trat P T To 0 I illustrate 11 us e a mac machine hin e that costs A 25 25 I is IS a h. h highly Ig hi Y d developed eve I o 1 machine containing t to 0 90 0 0 of f t the h e automo automobile bI I e concerns in In the coo coun country n p S The Sellin Selling Cost Cos t of An Car costs three thirty-three and ono ono- third one third cents cents Any on J three three thou t thousand end separate parts parts more more moving g g. g Y t try rY over a aS and above about above what the they y could bu buy y the tho each automobile he turns out It costs costa B two or frictional parts than a railroad locomotive Consider the following g tab table le as the bas basis is same cars car s for and in In fact much better r cars d dollars II and d half each h automobile bil 0 ars an a on au t omo e h he e turns The Th e I locomotive oco runs over a smooth track the u upon upon on w which h. h IC h t the h e se selling 11 Ing price 0 of f any car must f from rom t the h e 1 large arge manu manufacturers f put out auto automobile mobile Is driven roads be fixed o over ver rough with s sharp to turns iris a and grad grades es it is is subject to far Quantity Production of Automobiles Automobile The same is IS true e of salaries laries tl the e salary zY ii more wear wee r and tear the than n the locomotive Obviously Ob Ob- Excess cost cot V of a 25 e en engineer veer employed d b by A adds Items which muk o c Mf Min Assemblers Assembler's of Assem Assem- Vague statements are f frequently made ade adeon con concerning on only three thirty and third one-third cents the Y i it must then be th that a t each h rs c to cost u necessary up P Selling g Price Cost Cost Cos t bled Car cernin g the tee effect 0 of q quantity y p production n in iii In reP reducing re re- of the whereas if B on one e of f t th the he three th thou thousand usan sand d automo automobile bl car employs a aman man of 0 eed I e parts ducin manufacturing costs To illustrate this ual and d h. h his equal ability bilty is 50 both a I an salary cost 2 ot moving an and stations stationary fit operate co-operate a and Factory Cost Coat eq 18 IS P per t truth th t uninformed f d it to is ru 0 un In orme IS to persons necessary The r for function with h th the e t t bI car same excess cost B occurs to in inthe possible grea greatest es e precision P preCISion Ad Administrative e a advertising adver adver- d ver- ver state the tee h elements 1 th that at enter into costs coats an and d. d the The quality of th the e au automobile t omo 1 e d depends epen d s entIre entirely I. I case of purchasing agents inspectors face factory fac fac- Y and and selling selling 11 Ing prices aces 0 of f au automobiles t orno bil es Man Ma Many people 1 e F ny Y the of to tory executives superintendents c cd on quality o the raw material te al and d th the skill k 11 etc ete e s 1 general tan t- t ma an expenses say expenses say will be astonished at the number of these ele ele- an and d' d experience with which it is IS designed and the they are arc tho the same Barno in in With h an annual facto factory over over overhead r merits ments t P Primarily 1 th the basic b. cost t of f automobile auto auto- t men r. r s. s y y e cos 0 an au 0 manufactured re d The Th e I locomotive ocomo t. t Ive at al all all all' 1 times is IS b both 0 th cases cases 80 80 f mobile bI is h head ea d exp expense rise nse f for or A his cost pe per car would o 1 operated and cared cared fo for r b by Y experienced en engineers engi engi- g i- i Discount from list al allowed at- at 1 1 mo I e lS is be whereas a overhead fo fOJ and skilled mechanics Automobiles lowed ow d dealers assuming assum assem 1 1 1 The raw material contained in In it B D would be per car are operated by by owners O who vho sometimes possess pos Pos- ing ing 20 o the maximum maximum 50 2 2 The wages of the workmen who fashion sess only limited mechanical l ability therefore Quantity ty Production on Red Reduces aces Costs Costa Co tY the material int into finished The of 60 material a finished car sum Makers Maker's Profit 60 automobile be an must designed and manufactured these two items is IS the prime prune me cost and the actual Quantity production reduces do the cost coat per pet ca cat caf ture to meet eve every emer emergency en of service service service and Totals T Tota 3 0 1 1100 1350 car value the customer receives receives All l costs and f for it item m 4 4 administrative v selling and advertising adver to WI withstand t stand the abuse an and neglect of unskillful Increase 23 expenses beyond these are of little if any value fist and general expenses i in m n the same name way s operation to him Supposing the annual expenses uses of A are t- t 1 I Who Wh 0 M Makes a k es A Automobiles U t omo bl I es This illustration shows a selling price of 3 3 Facto F Factory ac t ory over overhead h ea d a expenses S should h ou ld b be e is IS muc much h 1 less the than 1 cost th the is only 80 per car which 0 ess e average person imagines There hundred for the manufacturers manufacturer's and 1 Inc included I U. U d e d providing d Ing g t the h e manu manufacturing f met methods hod S 1100 1 are over one concerns making mak ma k- k car 1350 this charge ar a to b be e. e in ing g automobiles in in this count country of which for the assemblers assembler's car The buyer must pay are simple direct and economical abo about t ten are m manufacturers while the others about 23 more ore for the assembled car Factory overhead expenses include supplies sup sup- 80 In th th ill illustration we l Have abe allowed rB B 4 80 per tai car which o on n a basis of 1 I jare are assemblers simply because it is IS a an assembled car The plies supervision and factory organization expenses ex ex- akon J The manufacturer owns a and operates a complete com core manufacturer gives grues s his customer the benefit of which according to the intelligence of cars P per peb annum anh m makes ak es h his J expenses henss w which IC he can cange ge get through with if ho he p lets manufacturing g P plant lent consisting of an extensive ex ex- the savings savings d derived from manufacturing his the personnel determine whether the output b canh r a engineering and experimental department depart depart- own parts whereas the assembler has to pay of the manufacturer is is large or small whether maintains mams no branch h 1 offices fu but markets markets hIs hia cars through dialers dealers ers only y In the case of item I ment met and a chemical laboratory this excessive excessive cost and put the burden on the the proper material is is purchased and at the ug a power 5 quantity manufacturers facon A allow deal dealers eal manu d' d ht whether h th th the d. d of f ow customer right prices design the th is Ip P plant lent 1 ant f found foundry oun ry n forge shop o machine shop o rIg weer e 0 e car IS 1 ers sm smaller all er perc percentages n to 0 of f di discount usually stamping plant I ant body shop trim correct an and d t the h e manu manufacturing f g me methods th- th 0 lJ simple 1 e Y J Jh shop paint ing p J Manufacturers Manufacturers' Advent running f from 1 15 5 25 25 Advantages l rom to according 8 t to o the flit th e sizo size and d effective ff H Hence jO that fa facto h and d nn e enee we sa factory tJ shop chop op an assembling departments may Y say Y of f t the salts dealer eal whereas 1 h n It I. I is well II k known within h. h the h automobile b. b in overhead h d 1 of f th the 0 er smaller makers era B al allow The assembler either t IS we WIt In t e auto o I e industry in over ea expenses are e a legitimate part 0 e owns or rents a plant low lour from 20 dos that large manufacturers with 10 10 actual car value received by the and to 40 discount because th their I c am usually of bare without 1 consisting a building L g dealers 1 sell n fewer and d 1 ers se cars an must moat therefore receive re reo- plant lent and without machine machinery but to 15 invested ed in ln in com comp complete P I lete ete I if 1 we admit this h. h th these ese three Item items representing resenting P power P discount make mak to a greater a per car e a plants and ample capital and resources resources' manufacturing cost are all the a actual car value 1 with benches pur Pur- purchase equipped simply assembling L forms and sim racks P y and stock rooms for the finished fin fin- chase case h t the h e most mo modern d em an and d expensive expensive I laborsaving labor labor- laborthe a b or- or t the h e customer receives reCeIves I In n m making akin g up t the h selling sell sell- 11 profit pro th the ro fi t. t The whether C expenses 1 acs 0 of f dealers 1 era average a about b out outI tb I shed which he from saving saVIng mac machine machinery h. h an and d then th en in In manu manufacturing fa ing price however h 0 other ther items are a add added dd cu as se e same they n ey handle handl e a qan h tar production pro ro purchases arts t parts parts d duchon tie I P P uc on car or ora a small production prod car an and d manifestly man man- their h engines steering axles I transmissions f follows 0 II manufacturers middlemen He t. t en e engines gears ax es makes or if estl estlY y the dealers m in the former case e selling automobiles b these differentials bodies tops etc their costs 4 Administrative and selling sell I by Y putting parts together in in 4 4 advertising seven and a half times more cars than in the tho are lower if anything th than n parts manufacturers his assembling department ing and general n expenses latter case can a afford Ford and actually Y d do 0 recel receive re o oI ers costs for the same articles I 1 5 5 Discount allowed automobile dealers a less discount per Pe r car A Again n n's the deale dealers dealer s 's s Excessive Cost Coat of Assembled Automobiles Manufacturers i producing cars ars annually an an- who sell the customer and give him service service discount at the same percentage amounts to Practical all manufacturers well produce more parts of a specific type the list of Practically Y as as assemblers as as- afterwards more money as price the car to- to in in- bu finished from middlemen than any parts manufacturer produces As a arule In the illustration it is shown i buy Y parts creases is as I such as wheels tires electrical equipment and rule c par parts t s manu manufacturers fa t are no not t. t specialists I. I IS t s in inthe In 6 6 Manufacturers Manufacturer's s or assemblers assembler's s profit r on the 1100 1 car A against on the I some minor minor p parts arts and therefore the costs of the sense that they make only Ohn one type of hod body y Quantity Production Distributes Expense nee 1 1350 car B using 20 d o i in n both cases so o I both the manufacturer and the assembler are or ax axle e or engine engine Although t t their tota total output that quantity P production saves the b buyer r 50 50 The Th e to total a I 0 of f t these h. h ese six six items comprises t tE tha sometimes but rarely exceed the i i on a par for these parts but these P parts arts constitute may q quantity quan quan- uan- uan on this item sellIng price I It t be astonishing but it ft is IS of large automobile manufacturer may 1 less than h 20 of f the h of f automobile bl any t t tute t cost ess an 0 e 0 an au omo I e. e e true t that h at ever one 0 of f t these h e sip S1 six v items must an and d they make varieties and hence do donot every everyone The Mal Makers Maker's 8 Profit O Other h constitute about b 80 of f the of numerous t er parts arts a out 0 0 t cost 0 the automobile the engine axles transmission not 0 obtain b. b as ov I low manu manufacturing f. f g costs as t the h e d does es vary with production E Every small mall pr producer pro pro- What has been said regarding dealers dealer's di discount din dis doter ducer whether th h he is manufacturer ufa ue weer is a or an assembler as as- large automobile manufacturer obtains differential steering gear body and top making rI or count applies with equal force to item 6 sem filer er necessarily y su suffers ers an increase increase ln in in every everyone up Up most of the 80 Hence a manufacturer Hence the large automobile manufacturer makers maker's er n pro profit fi t which in m in the case of quantity Ie of f th these six lt items and d must t th therefore fa ems m I one 0 ese SIX an us ere ro 1 who who manufactures these e parts from raw ma ma- produces his own OVIl parts at a lower cost than the P pro production ro d. d uchon A rare rarely y exceeds per c Cl car z- z h f for h. h his th than th the I rod c charge more or IS car an e large producer 1 trials t rials 1 s m in in hi his s own plants pants I roughly hI y speaking ki ng is IS parts manu manufacturer f pro produces d. d uces similar 1 ar parts f for foran or arge arge p but b. ut in ln in t the h e case 0 of f small p production rod B usual usua usually JY 1 S making 80 of his car whereas the assem assembler bler an assembler who buys in in small quantities and Illustrating S thus this we Wl will take the cars of a amounts to at least 60 more more because of tho the who vho buys them from parts arts manufacturers is is it follows that t the he 23 a excess cost of the assembler assem manufacturer A producing 75 cars care per latter makers maker's smaller volume purchasing from froni middlemen practically 1 00 bIer bler illustrated above is is not exaggerated annum and either a small manufacturer or the The large p profits bei being ng made b by small makof makers mak mak- usual ual assembler B producing u ng cars bYli o of f h. h his IS car Another point is IS that the assembler buying e ers v which h. h IC are a matter 0 of f pu public c record d as Studebaker manufactures in in its o own plants lams parts arts from numerous sources and often the Commencing with item 1 1 raw ra ram m material tenal l it shown by annual reports of these companies should be obvious that A can obtain much the truth of this These from several obtain statement all o of f 1 its ts engines ax axles axle I es tra transmissions diff differentials eren- eren same part sources cannot prove the same precision of machining and lower I. I ower prices t than h an B f for or t the h e same sarno material matena 1 profits often run from to car E Even par Pr t I b bo bodies d. d and d t ven assembling assem Ia s s steering t gears 0 les an tops b because h. h his IS b buying an and d purchases h ases are are- f for II f for 1 less 2 n nig O bf 0 whereas some manu man manufacturers f ac tur era b buy uy b bodies 0 d. d Ies ax axles I es an and d bl bling ig n in the finished car w which the large manu menu manufacturer Ying power or cars se selling Ing or ess than vy seven an and d a h half a If times greater manufacturer in this A fat to ob obtains no quantity to In country f from middlemen steering ears rom ml emen gears Still again agaIn the assemblers assembler's s profit per car is is In item 2 2 labor it is IS obvious that A |