Relief

OPS lifted the manufacturers' ceiling on new cars last week by an average 5% to 6%. Automakers, who had asked for 10%, will set new prices on each model according to increases in costs since the start of the Korean war. First out with proposed new prices this week was Chrysler Corp. It asked OPS to okay increases in retail prices on its four-door Plymouth by $108, Dodge $117 and Chrysler $156.

In pointing out the reason for the increases, Board Chairman K.T. Keller said that the profit on Chrysler cars and trucks in the first half of this year was "only 2.57% of sales as compared with 6.34 for the entire year of 1949 and 5.84% for the entire year of 1950." Ford Motor followed with its proposed increases: Ford, $41.35 to $65.91; Mercury, $40.45 to $52.52; Lincoln, $69.57 to $75.06; Cosmopolitan, $56.90 to $70.77. But they were computed only on the wholesale price; the retail increases will be bigger.

Packard, which got in under the wire with a new model before the price freeze, was the only auto company so far which said it intends to keep current prices. OPS also admitted that still another auto boost is on the way. Under the new Defense Production Act, automakers can base increases not only on higher costs, but dealers will be allowed to restore their traditional mark-up of 23% to 25%.

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