Grey Market

In one of London's swank West End auto showrooms, the proprietor flicked a bit of fluff from his immaculate morning coat. Said he blithely: "Shocking, of course, but perfectly aboveboard."

What was shocking was the grey market in cars, which had spawned tricks to put U.S. black marketeers to shame. With British car production in low gear and demand in high, many a London dealer was openly selling 1946 models at double the Government ceiling price. The prices were legal because Government ceilings apply only to new cars, and dealers found it easy to convert a new car into a secondhand one. As a Piccadilly salesman explained: "You only have to take a new car out and let the balmy summer breezes play over it a while and there it is-- secondhand and wildly out of control."

What often does the trick is a quick sale, a quick repurchase by the dealer. But "used" 1946 models were so profitable that dealers competed ruthlessly to get them. Some dealers, ready cash in their hands, actually trail new cars through the streets of London. One day recently on Portland Street (London's auto row), a man had just pulled his new Sunbeam over to the curb to greet a friend when a dealer raced out of a nearby showroom and offered -L-200 above list price for the car. The prize was worth the chase. A 1946 Armstrong worth -L-991 new is worth -L-1,850 ($7,640) secondhand, a -L-352 Ford is worth -L-710 ($2,932) once it has been used. So Britons are paying for 1) low production, 2) their export program which sends half their cars abroad for sale.

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