GERMAN CAR INDUSTRY

Press, Volume LXXXIX, Issue 27064, 12 June 1953, Page 12

GERMAN CAR INDUSTRY

SLUMP ON HOME MARKET RECORD PRODUCTION YEAR (From a Reuter Correspondent.) BONN. West car industry, which has just finished a record production year, is facing harder times and a disinterested home market in 1953, according to present signs. The New Year opened with the Ruesselsheim (Hesse) firm of Opel, the country’s second largest producer and a subsidiary of the General MotorsCorporation of America, working short time. Car manufacturers had hardly hung up new calendars in their offices when Ford’s Cologne works announced that it would have to put half its workers on short time unless the market improved quickly. The Hanover lorry-making firm of Hanomag soon followed suit. ; A dose of price-cutting seemed to produce little result. The showrooms of mrfst of the main firms are full of brand new models for sale. But the customer cannot be enticed into buying them as fast as the factories turn them out. Manufacturers first explained that the German car-buying public had spent so much on holidays abroad in 1952—the first post-war year in which the West German could get an adequate allowance of foreign currency—that they had nothing left for a car. Christmas, however, showed that the man in the car-buying class had plenty of money to buy expensive leather handbags, good clothes and shoes. According to the statisticians, there has* been no general recession since the retail standstill in the summer. In fact, things are again generally looking brighter for the shopkeeper. . The next explanation was that after the first round of price-cutting the public decided that there would have to be a second and so waited for it. This month, the Association of Motor Manufacturers in Frankfurt issued a statement that there was no point in waiting for a second cut. It would not come. The association argued that the industry had in fact already achieved a “near miracle” with its first-round cuts. In the middle of 1950, they said, the index of car prices had been within a few points of the indices for the raw materials for car making. Since then metals had soared from 217 to 335 points, and wires and sheets from 204 to 346 points. Car prices, on the other hand, had only moved from 206 to 232 points, and were now starting actually to come down. This restraint, the association said, was entirely due to rationalisation at the works. Saturation Reached Economic observers believe that the real reason is that the post-war German car market has reached a degree of saturation. After the loss of over a million cars during the war years, through requisitioning and war-time destruction, the public has now once again reached a comparatively high standard of motorisation. This rate, about one car per 40 head of the population, is not as high as in Britain or Belgium. But the roads, with the exception of Hitler’s sumptuous autobahn, are of a very low standard. Motoring is expensive in Germany and the Mahufacturers’ Association complains that the motorist has far too big a share of the nation’s tax burden to carry. Petrol costs 65 pfennigs a litre (nearly five shillings a gallon). The car tax on a 3000 c.c. car is 480 marks (£4O) a year and a third party insurance further 480 marks.

A comparatively small proportion of the cars on the road in Germany is paid for by private individuals. The majority is directly financed out of public or companies money. One of the paradoxes about this car slump is that it has touched neither the cheapest nor the deafest. The Volkswagen (people’s car) firm from Wolfsburg, near Brunswick, which, as Germany’s largest producer made 135,970 cars and vans in 1952, and is still working on a delivery delay of several weeks, so great is the demand. The delivery time is understood to have gone up since January 10, when Volkswaken reduced the inland price of its standard model by 200 marks. It now sells at 4400 marks (£366). Mercedes of Stuttgart, the third largest German producer with 56,619 units in 1952, has also so far been unaffected by the drop in orders. Mercedes specialises in solidity and conservatism in the cheaper models, 1700 c.c. and 2200 c.c., which have hardly gone over to modern lines yet. The luxury three-litre model with modern, but restrained lines, is becoming increasingly common as the limousine of officialdom and big business. During 1952, 3034 models of the Mercedes 300 were sold at prices varying around 30,000 marks (£2500). Altogether West Germany produced 428,455 vehicles (302,393 cars) during 1952 compared with 374,151 vehicles (267,376 cars) the previous year. About one third were exported.