MOTOR CAR PRICES

Evening Star, Issue 17484, 15 October 1920, Page 6

MOTOR CAR PRICES

A REDUCTION IMPOSSIBLE. On September 25 Xevv Zealand papers published a New York cable, dated two days earlier, stating that the Ford Company had reduced the price of their cars between 14 and 31 per cent., and that other automobile manufacturers of prominent brands had announced a reduction of between 17 and 21 per cent. NewZealand agents for such cars naturally took steps to ascertain the position, for the tendency of intending buyers of cars was to hang off for lower prices. [t is extremely unlikely that these will materialise, in the immediate future at any rate. Cable correspondence has been shown us which all points one way: American manufacturers of cars have not reduced their prices, and have no intention of doing <so. One well and favorably known Detroit firm, in response to inquiries from their chief New Zealand agent, cabled on September 30: " Never has been any excess profit in our prices, therefore none to take off. Our policy always give full value. Will be no reduction in our present price. Contrary report absolutely untrue." Another 'cable, clinching this was- received locaJlv on October 14.

In confirmation of this, Mr V. F. Cooper, direct representative in New Zealand of the General Motors Corporation. U.S.A. (in which tho Detroit firm just instanced are included), said there could be no hope of reduced prices until labor and material, which made up 90 per cent, of the cost of a car. could be obtained at a lower figure. Of that there did not. he said, appear to be much, probability, and he left New York as recently as August 24. In the _ August 21 issue of 'Automobile Topics,' a New York trade journal, an article appears which is headed 'Prices Tending Still Up, Not Down.' In thi.are incorporated the views of the managers of many car manufacturing firms. These coincide in a marked degree, and may thus be summarised : " There is no indication of lower prices. We get no advices of lowering quotations on material or labor. . . ._ There should be no reduction iu the price of fairly-priced cars until transportation, production, and taxation conditions change. There are no indications of price reductions, as material, labor, and transportation tend rather toward increased costs."

Only surmises can be made as to how the misleading news was cabled from New York. One explanation is that some of the small fry in the car trade, such as hand-to-mouth dealers and assemblers of the component parts of a car, had pressure put on them by the banks, for there appears to have been a tightening up process going on in American financial circles. Being pressed for money by their bankers, these dealers would bo forced to realise quickly on their stocks, and tho only wav to_ speed their sales 'was to cut their prices. As to the movement having ever amounted to more than this rustling of the outer fringe of the great American car industry, there is, as has been, shown, no indication whatever.