AUTOMOBILE PROGRESS AND PRICES

Wanganui Chronicle, Volume LXXXII, Issue 19437, 24 October 1925, Page 19 (Supplement)

AUTOMOBILE PROGRESS AND PRICES

FIXTURE OR FLUCTUATION? (By H. Massac Buist) On the threshold of another motor show season the question of car prices arises naturally. Before the war costs were relatively stable. Since the campaign they have not remained the same lor six months together. Of course, it was obvious that the artificial conditions under which the first series, of post-war cars began to issue from the factories involved costs which could not obtain indefinitely. But we passed through the period of bringing costs down to normal to an alarming stage at which many cars were marketed at costs manifestly below those of production. That is always no less unwholesome for the industry than it is for the buyer. To get a car for less than it costs to build is to be without a real guarantee such as should be assured, if one is to enjoy satisfactory motoring. The low-cost-car is a not-to-be-repeated-proposition, and though it may appear very attractive to the buyer of drapery goods, for instance, the situation is the exact reverse in the case of the buyer of the car. The not-to-be-repeatqjl-.ear is one for which a manufacturer will not trouble to produce quantities of spare parts to be kept available for a score of years, if need be. On the contrary the given proposition has been no good to him, therefore, the sooner he is quit of it the better, because the freer he will then he to get on with something more satisfactory to his legitimate purpose. Of course, there will always be a large section of buyers who can never get cars too cheap, but the same individuals will not constitute this section from one year to another; each one in turn will learn that ho has made a mistake. If anyone wishes to know how to have satisfactory motoring with a ear of no matter what country of origin he must take it for granted that, like any other satisfactory product of industry or trade, the car must also be a proposition satisfactory to the men who build and market it. Lower Prices or Better Cars—Which? Let us, therefore, assume normal, otherwise healthy industrial and commercial enterprise and consider the question of motor car costs. Since production was resumed after the Armistice, the prices of cars of all powers have been falling not year by year merely, but sometimes several stages in one se&son. You will be able to buy a new car and parts for £llO or so in six weeks. Indeed, so much attention has necessarily had to be devoted to the question of reducing costs that the point now arises as whether we have not reached a stage at which other considerations become more important to the majority of buyers than the actual further reduction in the cost of a car of a given quality and accommodation. For one thing, even where an intending buyer may not have enough ready money to buy the car that will fulfil his requirements, nevertheless he will have not the slightest difficulty in being accommodated by the vendor in a way which will enable him to pay any balance at his convenience. The question is, do wo want lower prices, or better cars in given categories? This opens a fascinating vista. In the earliest days of the movement var betterment always took precedence of cost. Those manufacturers who have through a given period led tho industry—to whom, therefore, mankind owes the evolution of the motor car since, without pioneers, there could have been no evolution—have never experienced difficulty in disposing of their outputs at whatever prices it has been neces.sary to ask. Often it has been to ask prices of a pre-war public which are quite impracticable for any appreciable proportion of the post-war public. Now, however, we have reached a stage in regard to even the cheapest classes of ch.rs, whereat it is a very nice question whether you can do bigger business by improving your product and leaving the price stationary, or by cutting the price and either leaving the product stationary, or “peeling it.” Seeing the Problem in the Bound While it is true that the majority of buyers have been inclined to go on the penny wise, pound foolish plan, nevertheless a minority of very considerable proportions, which is being recruited rapidly, appreciate fully thftt the cost of motoring must be regarded as including alike the purchase price of the vehicle; its running, maintenance and taxation, housing and renewal costs, and its wearing life. Presently this

public will constitute the majority of the buyers of the world’s motor cars. Therefore, it is the one for which the wise manufacturer will especially cater. What is tho good of buying a cheap car that is all “eye-wash” and “dolled up” with accessories, the very coachwork of which looks shabby within a couple of months of being taken into use. You can fool some of the public. all the time, but you cannot fool all the public all the time. Buyers tire beginning to ask; what is this car going to look like and run like after I have had it in use for four, • six, eight or ten years? The cheaper your car category the more serious the used car problem, not merely because, obviously, a vastly greater supply of used cars of low priced makes is available to the purchaser of a secondhand car, but also because the original purchaser regards the loss of a £5 note as a matter of very serious importance! whereas, the buyer of a very expensive fashionable car costing thousands of guineas would think nothing of dropping anything from £5OO to £1,200 xuu p. disposing of his vehicle at second hand after having had twelve months’ use of it. The Crux of The Problem Tn other words, the industry must now concentrate on the man who buys a car to wear it out, because he cannot afford to lose money in the way of disposing of it secondhand. I know of one small 4-cyli'nder engined car sold secondhand, for 10s in running condition. Here you have the crux of tho manufacturer’s problem. There is all the difference in the motoring world between producing a‘ car that is attractive to the eye at the time of purchase, and one which will retain its

attraction after years of service. Yet his problem is simplified by the fact that there are now clearly defined price classes among the purchasing public. Provided he has the right product, a manufacturer can almost bank on so many thousands of buyers of a car at such and such a price; on so many more thousands for cars at a price so much lower; and so-on down the scale. It is for him to decide whether to aim at the biggest public by process of cutting his prices digitfately by increasing output all the time, or at building up a permanent and profitable business by supplying the public which is prepared to pay a reasonable price for a still better article. It would be disastrous if every manufacturer to put on the market the cheapest car. There is a saying that there is always room on top. Be that as may be, assuredly there is never room for more than very good ctar builders in the bottom price category. There are plenty of other markets to cater for apart from- that one which is possibly the most’ overcatered for in the world, if not to-day, then it will bo to-morrow, because one after another foreign countries are coming into the cheap small car market. Thus Italy is going to make fen extraordinary bid in the 8-h.p. category; and it is <1 matter of time only before America turns her colossal in dustry to tho production of the light, small engined runabout which is beginning to be a practicable proposition for her home market, because she is building roads at tan unprecedented rate. Hitherto the absence of them has precluded her developing this branch of the automobile business, even as it accounts for the quite negligible proportions of her motor-bicycle

industry. That will never amount to anything now because the scale of her car production has become so vast that she can give much better vtilue for money in cars than she can possibly attempt in motor-cycles. We may reach that stage in this country too. But it will not be for many years. The Unchanged Price Policy There will start a tendency among certain of the world's car manufacturers to adopt the fixed price policy and to build better cars year by year to each price limit. This will prove the way to building up that goodwill which is essential to secure the widest scale and most regular demand whereby economical menufacturing is made possible. The public does not gain by cutting down the price of a £225 car to 200 guineas, then to £2OO, £l9O and to £175, for instance, in the course of years, if the quality of the upholstery is changed for tho worse, and so forth, whereby in the issue the buyer is offered a car inferior to that marketed originally at £225. Instead, it is better to take, say, £2oo_as a fixed price and to make the very best and most distinctive dar at that price, improving it year by year as it becomes possible to reduce cost, not by sacrificing quality, but by getting bigger output, and standardising to a greater extent, so that, presently, there are incorporated in the design and production every point which cumulative experience has revealed to be desirable. That is something much more widely to be appreciated than is the more cutting of price to bring a car which was within the purse-range of the £225 public within that of tho £175 public —two utterly different publics to which to appeal. Both are well worth catering for; but neither can be catered for in tho best fashion possible by constantly shifting the aim had in view by the manufacturer. With few exceptions, each should regard the selection of ft price as his target, and should remain utterly unaffected by whatever his rivals may do in the matter of shifting their prices. If they cut, then it for him to compote by so improving his product that it becomes, not more like theirs but unmistakably vastly superior to theirs. That is the only way for the majority of builders to evolve cars of character. The whole history of automobilism shows that any business worth doing in a permanent sense, and in regard to scale, can bo done only by giving each car a distinctive combination of desirable charted eristics. If any manufacturer lacks courage, let him take heart of grace from pondering the fact that when price-cutting has been at its worst those who have had cars of distinctive design, such as has constituted them the best of their kind, have been able to dispose of the whole of their output without cutting the price one pound per vehicle. Tn other words, the car is the thing, and will be always.