H.P. Recession Hits Car Dealers In U.K.

Press, Volume XCIX, Issue 29367, 21 November 1960, Page 11

H.P. Recession Hits Car Dealers In U.K.

[From the London Correspondent of “The Press")

LONDON, November 12. It is not the first time that a television programme appears to have had a direct influence on stock market prices, and last week the 8.8.C.’s impressive reporting and feature programme, “Panorama,’’ seemed to have stimulated an immediate reaction on the market price of shares in the car sales finance firms. “Panorama” reported, through interviews in Coventry, how shorttime work and dismissals in this car industry town were affecting workers’ lives and budgets. Although business in Coventry itself did not appear to have been hit very hard, a lot of families were having a hard time to make ends meet. Many had to prune their expenditure to the barest essentials and those hardest hit were people committed to hire purchase agreements. Car dealers operating hire purchase schemes said that the situation was bad and the repossession of cars on which full payment could not be maintained would only be a further embarrassment. The response was a fall in price for shares in even the bigger hire purchase firms, although it is the small businesses that face the real problems. Bowmaker and Lombard Banking shares both dropped a shilling next day and United Dominions Trust dropped Is 6d. The effect of the credit squeeze has become more pronounced in the motor trade in the last month. In October, car hire purchase business was down 18 per cent, on ; October, 1959. The number of credit contracts registered during

the month (110,909) was down 8.6 per cent, on September. This drop was conaderable, even allowing for the usual autumn fall-off. ITie finance companies have repossessed more than 30,000 cars this year in a sudden increase in bad debts. Both Lombard Banking and Mercantile Credit were quoted recently as allowing that the increase in repossessions had been sharp this year. One of the problems for car buyers seems to be that they have underestimated the running costs for a vehicle. The steepest sales fall has been in used cars, .for which prices have been dropping throughout the year. The market now seems to have reached its bottom, but there are no signs of an upswing. An improvement in this market is awaited almost as eagerly by the manufacturers as it is by the used car dealers; for, at present, with poor resale values now added to high running costs and restricted, overcrowded road conditions, new cars do not appear to be good investments. Aschman Award Mr Lance Aschman has given £ 100 to establish a prize fund in memory of his Sather, Mr C. T. Aschman, who had a long association with the Christchurch Teachers’ College. In the conditions, emphasis will ■ be given to success in principles and practices of teaching at the college. The Canterbury Education Board expressed appreciation yesterday.