Show Competition Cuts MotorCar Motor MotorCar MotorCar Car Prices and Profits Mergers May Be Forced i i Outside of oJ Few Leaders Automobile Securities Are Arc in Uncertain Position Babson Finds Abuses of In- In In Installment I Plan Being Removed Special pedal fly Y w U n OX I I t Florl Florida la Feb Fob February February 5 Only 5 Only a a few years ears ago th automobile Industry was a amero amore amere more mero Infant struggling for public recognition Today It t Is hi a full full- full fledged fledged business and Is one of the mot most Important If It not tho the most moat Important tra trade lo In lii point of man man- manufacturing manufacturing manufacturing value in American busi bust business business ness fleas Is ts growth has been unprecedented Even five years ago there was only about one auto to every nine persona person Now low there Is Isone ISone Isone one to every six lx Production figures have exceeded the tho expectations or of orthe tine the most moat nio t ardent prophets Each year brings brines the tho statement that the tho saturation point has een reached and each succeeding year ear that time has lia been set act ahead What does the tine year ear 19 1927 7 hold In store tore for or a a trade which ha has been operating at such high h levels Moat Io t auto automobile mob Ie manufacturers ex- ex expect ex expect poet a slight decline from the th year 1926 but they anticipate a total production of oC slightly over uon cars cart and trucks strides In truck consumption may offset to some somo degree lIe leo declines In the consumptIon of passenger cars Trucks are arc coming Into greater usage aee In connection with transportation tation nail roads and street car carlines carlines carlines lines arc are supplementing regular service by y the operation of exten exten- extensIve extensive sive alve bus lines CompetItion nas has force l prices so low that a relatively small smail margin of profit Is obtained Con Con- Consolidations Con Consolidations may help to prevent further price reductions Since 1900 over 00 passenger p car com coin companies panics have hav organized At present there 55 53 companies sev- sev sev several eral erat of which may bo be a eliminate this year ear General Motors and control about 60 0 per cent of othe the automobile business The other 40 per cent Is divided among the so 50 odd remaining companies The The automobile business 3 may maybo maybo maybo bo stimulated to some somo extent dur dur- durIng dur- dur during ing lag the tho year by n new w Inventions In and refinements of principles al- al already already al already ready In use The Introduction of better gasoline and Improved carburetors will allow for some changes In en engine lne construction to provide cheaper c cost of transportation transportation transportation tation per mile Science is 19 sure to spring some surprises on us as asvery asvery asvery very complete Investigations are beIng made malic to Im improve rove engine engin and chassis construction and find cheaper and better fuels The The production of I passenger carr In In 1926 totaled annl truck production amounted to making a total of or Ga 62 This record Is slightly in ex ox x excess cess eellS of the total of 19 1223 o Passenger Passenger ger car production was 2 und truck production was makIi a total of motor vehicles produced In 1925 Jassen Passenger Passenger ger car can Increased 2 per Ier cent and trucks 6 G per cent Commercial vehicles are becoming a more Im- Im Important Im Important part of or the automobile In- In Industry Industry In Industry every year ear It lj is claimed that the total mileage covered by automobile truck and bus routes routt'S at present exceeds exceed that covered by byall byall alt all of th the tho railroads In the tho country Freight and passenger travel by means of ot rotor notor vehicle has in the tho past cut Into the profits of ot rail railroads roads and car lines Most rail rall- railroads rail railroads road roads now however are finding the automobile a very ery convenient means to cut down operating costs eliminate non productive branch lines and act as feeder to the tern tem Street railway systems have to a great extent given way ay to the automobile Is The closed car Is helping helling great great- greatly greatly greatly ly to increase all year driving 74 per cent of the cars produced In 1926 21 were closed models In 1915 only 56 5 per Ier cent were closed mod mod- models models models els The motor vehicle registrations registrations in the tho United States amount to about to date Which figure Is Sl SI per cent of world re- re registrations 1st rations EXPORTS EX PORTS The export situation 1 Is h en- en encouraging en encouraging ging coura-ging In 1926 exports amount amount- amounted amounted amounted ed to an Increase of 3 per cent over 1925 Exports rep rep- represent represent rep represent resent about 12 per cent of the total production In 1023 1025 and 1926 Manufacturers expect that In the tho future excess production will be absorbed by export trade It Is predicted that 25 per cent of our total production will be sold abroad within a I few years ears These records show that American cars are arc meeting with popularity In foreign nationS M and the tho abroad seem eem very ery ory good Tho The Industry l I Is keenly alert to the dangers which may come through to abuse abuso the Instalment plan the Instalment system Is la positively necessary ary In Inthe Inthe Inthe only the automobile business because only In hl this way can the great toi majority of people be b Induced to i buy cars are rs Both the tho companies and the dealers however that In many cases they have llave not In- In In Insisted sistI slated I upon a sufficient first down payment and have tended to tho the succeeding payments over too loo long a a time Other practices practices tices also have hare crept crepe crep in such as giving too generous allowances on used cars taken in trade and also by throwing In extra tires and accessories which are arc not stand stand- standard standard ard ari equipment The sighted far far I agents as In the business realize that such methods lead only to I and they are doing everythIng every thing they can I to eliminate them Compulsory liability Insurance Is a factor which eventually I be- be believe be believe lieve Here will come In every state slate The experiment In l Massachusetts Massachusetts ap- ap apparently apparently ap apparently Is working out all nil right as far as It has gone It is Im- Im Impossible Impossible im impossible possible to tell until next spring however to what extent it will discourage automobile registration The law went Into effect offett January 1 and the various arlous dealers and gar gar- garage gar gar-ag-c ago age owner notice a R decided tend tend- tendency tendency I ency part pari ot of o car ear owners to store storo their cars until spring I doubt however if It when the warm days of spring appear these ear car owners will lift in able to resist the temptation to get tho the old oid bus out for another year r CertainlY there la Is I nothing which the aver aver- average average age family enos eno's enjoys as much 0 a ai It does willingto Its automobile and is willing lIlIng to sacrifice almost anything else the ear car ANALYZE X MACIT I ItT I Tine The financial standing of ot each carh company cannot be judged by the tIne earnings of the automobile group croup If It wo we include General Motors in h the automo automo- automobile bile group earnings for or 1926 will appear quite favorable fa However excluding the General Motors earnIngs 1926 proved less profit abl able to most concerns than 1925 1 To understand the tho position of the tho lIo group each raut be analyzed To 10 say the least earnings show effects of ot ex- ex ex excessive competition and lower IOl prices as well as relative economies Induced through great great- greater cr er efficiency programs Further economies economics by thoe thoc tho Companies which l have hae large larg financial fi financial resources will force the smallest companies to liquidate or consolidate Outside of a few load lead leaders ers the position of or automobile sec sec- securities sec securities at present Is uncertain rile records of ot General Motors Motor and lord Ford show that these corporations will bid for tor a still larger percent percent- percentage percentage percentage age of the Ule cars ears produced In oth- oth other oth other er cc words pickings are arc going to bo be bovery bevery bevery very poor for some companIes TIne The law of survival of ot the fittest Inthe Is operating with a vengeance In the automobile Indu industry tr Probably the prospects of three or four companies out of ot move mOle mor than 60 are really goo good 1 for this year ear WHY If- If IE Frankly I cannot understand why so many people at present want to speculate In motor stocks It seems as If It this particular had been worked over-worked Of course the present decline In motor motoi pro pro- pro d production prod to a large largo extent Is sea sea- seasonal sea seasonal and temporary automobile December production for Decem Decem- ber her wa was 46 4 per ler er cent less than In December 1925 and was w a the th lowest figure since February 1922 1912 1 22 when business was as emerging from the tho depths of depression Moreover this is the third month that pro ro- ro production lal lia ha been Leen running under that of a year year- ago Certainly It would seem wise to watch this trend with the th utmost care eAre Any serious curtailment In the demand for fOl new cars will force mergers much more than has hIlS been the case Probably no one on can give five a real good 1001 e cc- es estimate of the motor outlook for tor this year car until about the of next May fay Certainly various companies if ro wi in the tir policy 07 01 sir ct aa nr retrench retrenchment ment that the they are arc now carryIng out The Tir Industry Itself Is sj ns solid soUd as any In country The question ques- ques r ras tion Is to know which are going to control It I HI m un TI I I All this hii hs h a very Important bearing upon llon tIne the trend of the S1 11 0 of general business which at present Stands tand ands about 9 per cent above aboe I normal Tile The automobile Industry Is one ot of the tho most Important supporters of or United Any slack clack Is 18 felt In a other TL a multitude Of or Oth- Oth or er lines This Is of one of the r rca a sons why I 1 foci 1 that a pOlle pOlicy both II as related to th the stock market t and nd general busine should te allowed Moreover It LI I 7 h 1 bout everyone everone rout should now b be r out i out ot Ut debt |