Too Many Cars?

For more than a decade, the nation's auto dealers have had one major complaint to file with Detroit: too few cars. Last week, they sang a different song. Across the U.S., dealers complained that they could not sell all the cars Detroit turned out. Texas dealers passed a resolution condemning "the production of automobiles in quantities far in excess of the number which can be orderly and efficiently sold." Kansas dealers, at their convention, called for a production cutback. Even one of the manufacturers joined the chorus. Said Studebaker's Chairman Paul G. Hoffman: "The automobile factories must limit their production to that volume of cars which . . . can be sold at a profit, by retail dealers . . . Profitless prosperity on the part of the dealers will, over the long pull, result in profitless prosperity for the manufacturers."

"No Money Down." There was no question that for many a dealer prosperity was indeed proving profitless. With the first 1954 models already coming off the assembly line, dealers' inventories at more than 550,000 new cars, were near the postwar high; the big push was on to clear 1953 stocks at cut-rate prices. "Discounts up to $500," advertised one Long Island dealer. "No money down . . . three years to pay." In Seattle, a Plymouth dealer advertised on the radio: "If your car, no matter how old, can be driven to pur office, we'll give you $450 trade-in for it." In Chicago, the'price war had become so fierce that many were selling brand-new cars at used-car prices. One Hudson dealer, in addition to his own line, was offering new Pontiacs, Buicks, Cadillacs, Oldsmobiles and Plymouths below list price.

The Big Three manufacturers were producing at so much faster a clip than the independents that the independents' share of total output had dropped from 12.5% last April to 3.8%. All manufacturers were putting the pressure on their dealers to take more cars. Many an oldtimer was not afraid to turn them down. But some of the Johnny-come-latelies who climbed aboard the gravy train after the war, and never knew competition, were loaded up too heavily and went out of business. Others resorted to razzle-dazzle gimmicks such as offering cars for "$1 over cost" (special invoices, of course, were made up to show the "cost"), or giving out free gasoline and insurance.

Blitz Selling. Most of the old hands were still in good shape; they went after customers and clinched deals with old-fashioned selling. Packard dealers were making door-to-door calls to line up prospects. The Ford Motor Co. put on a nationwide campaign of "blitz sales." In Seattle, Ford Dealer William 0. McKay advertised that he had to sell 131 cars in 48 hours. The inference was that he would make a good deal, and customers nocked to his showrooms. Without benefit of discounts or special deals, McKay easily sold the cars. In Denver, Ford Dealer Richard Whitfield ran a tongue-in-cheek ad:"Bring your old car, horse, cow, goat or chickens. We'll trade for anything." To Whitfield's surprise, some brought horses, sheep and chinchillas, and 35 cars were sold.

Is Detroit producing too many cars? Where the selling was smart, the answer seemed to be no. Last week Chrysler Corp.'s Vice President James Cope measured the auto market. Cope's statistics: 17 million American families still do not own a.car; 89% of the owners have only one; nearly 30% of the people between 30 and 40 years old do not drive. On top of that, one-fourth of the 45 million autos on the roads are a dozen or more years old, and will soon have to be replaced.

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