HOW MANY FIRMS

Sun (Auckland), Volume 1, Issue 91, 8 July 1927, Page 21 (Supplement)

HOW MANY FIRMS

CAR MANUFACTURERS AMERICAN INVESTIGATION During the 25 years since 1902 some 182 firms have engaged in the manufacture of passenger automobiles on a commercial scale. At the beginning of this year only 50 of them remained in business. These figures are taken from two excellent articles recently published in the Harvard Business Review by Mr. Ralph C. Epstein of the University of Buffalo, and from additional data furnished by him. In arriving at these figures only firms that actually conducted manufacturing oh a considerable scale are taken into account. Separate companies operated by a single corporation, as in the ease of General Motors, are counted as individual units while companies that changed names and management but did not go out of business are considered as being continuing concerns. This brief but eventful history of the rise and fall of firms entering and leaving the industry is illustrated in the diagram. The upper, continuous line shows the total number of firms that entered the business from 1902 through 1926. Starting with only 12 companies the line continues on an irregular upward course until it reaches 182 at the end of 1926. The additions in the earlier y&ars have been only a few of them. The lower, irregular line shows the number of firms surviving each year. It has been falling rapidly since 1922. The keen competition that prevails in manufacturing industry in general is present in exceptional degree among the manufacturers of automobiles. When the records are brought up to date a few years hence they will probably show that still more firms have dropped out, that others have survived by entering mergers, and that very few new firms have come into the field. No doubt some relatively small companies will continue to succeed by skilled management and by successfully meeting special demands, but the major part of the great profits of the industry are being earned by a few large companies.

“How do, Mr. Dooley. Why not let me build a garage for that car of yours?”

“Garage! Now what would I do with a garage? I’ve only got one car, and. man alive —I’ve got six unmarried sons and daughters who like to drive!”