RISING COSTS

Evening Post, Volume CXXV, Issue 100, 30 April 1938, Page 28

RISING COSTS

CAUSE FOR CONCERN THE BRITISH INDUSTRY (From "The Post's" Representative.) LONDON, April 9. Rising costs are causing grave concern to the motor-car industry. The fact was emphasised by Mr. Leslie Walton,, chairman, at the annual meeting of Vauxhall Motors, Limited, which recorded a total turnover of £10,250,000 last year. The net return to shareholders was 7 per cent.

There was considerable doubt whether there was justification in anticipating an increase of sales during the coming year.^ said Mr. Walton. "If costs remain up or rise any higher we certainly shall be in danger of suffering a serious recession of business. As some of us foresaw last year, the increased costs, and consequent higher prices to the public, have had the effect of contributing to a considerable reduction in sales in our industry generally, as anyone who studies the registration figures can see for themselves. ' ■ .

"The rising cost of materials, particularly the semi-manufactured materials, reached such a degree that the whole motor-car industry was faced last autumn with a general rise in lits prices. We imposed these increases with great forebodings, although we kept them down to the minimum, feeling that it was outside the bounds of expectation to try and pass on to the whole increase we had sustained. We were only too right in our fears, for the falling off in sales in this country during the first three months of 1938 can, in my opinion, be directly traced to these increases.

"This is by no means the worst aspect of the problem. In addition to the rise in prices in the home market, we have naturally had to increase our prices in the export field. Where we were beginning to gain ground and feel some confidence in the future, we have already noticed a setback ,as a result of these higher, prices. '„

"Throughout the world, and particularly in the Dominions and colonies, there has been a marked opportunity for the English small car, with its known economy and the growing recognition of its capacity to meet the export requirements. Should we, as an industry, sell as many or even mpre cars during 1938 than we sold in 1937 in these markets, I can state most emphatically that we will have still lost a large number of sales through thess price increases.

"Our ability to advance our sales during the coming year largely depends on costs, and unless these do come down, I ami afraid we shall not see the increase in business that we hoped for and is "quite possible. I am stressing this point as strongly as I may because,' vvhile the immediate' future of trade and industry will be .assisted' by our national re-armament scheme, all these things "have finally, to be paid for, and there is a tendency in the internal activity 'of today,':to' fdrget.:the vital necessity of export trade, and the effect, of high costs upon our overseas business."