Business & Finance: January First

No. 1 automobile in volume of sales last year was Chevrolet. This year Ford, less hamstrung by Labor than was General Motors, regained the lead. This week, with the annual Automobile Show in Manhattan marking the January first of the 1938 automobile year, rival makers were girt for renewed combat on a scale far greater than ever before. Last week it was announced that for the first time since 1929 automobiles and parts rate as No. 1 U. S. export. In Detroit, employment approached the 1929 peak. In Manhattan, the Automobile Manufacturers Association announced that production of 1937 models had totaled 5,110,000 cars and trucks, 12% over 1936, despite strikes. World automobile ownership was at a new high of 41,750,000 motor vehicles, 70% in the U. S.

Coupled with the fact that car production last week was fast returning to normal after the annual slack season which this year was concentrated chiefly in September,* such figures seemed ample reason for extreme good cheer among automobile-makers. Tending their new creations in Manhattan's vast Grand Central Palace (see p. 67), makers almost unanimously anticipated their best year, pooh-poohed Wall Street talk of a major Depression. But, though this week's show in Manhattan marks completion for manufacturers of the crucial business of launching new models, to an equally important segment of the automobile industry—sales and distribution—it is only the beginning. Some 515,000 people are engaged in making automobiles and parts, probably twice that many selling and servicing them. After this week, when carmakers have finished holding their show in Manhattan, car-sellers will hold lesser shows of their own in 44 other U. S. cities.

The functionaries who transmit the finished car to the buyer consist of distributors and factory branches selling wholesale and dealers selling retail. There are 45,000 U. S. dealers and distributors, 60,000 repair shops. Ford and Chevrolet each have 10,000 dealers; Chrysler, Plymouth, De Soto and Dodge together have 8,000 distributors & dealers; Buick 3,000. Ninety-seven percent of U. S. towns cannot be worked by a dealer with profit, and 3,627 towns produce 85% of total sales. Cities, ranked by size, are the richest territoric:, A dealer usually sells two used cars for every new me, for more than half of U. S. motorists have never owned a new car. U. S. sales last year equaled 4,016,000 new cars and trucks, 6,590,000 used ones.

A sample distribution system is that of Buick, which has 18,000 men engaged in making its cars, 22,000 in selling them. Buick has 3,138 retailing dealers and seven distributors, covering big territories in the West. Buick also has 29 zones with managers and staffs paid by Buick to assist and instruct dealers in every way possible. For dealers are private capitalists, not employes. The average Buick dealer is an 85-car-a-year man. Starting out as such, a prospective dealer would have to show Buick, before he could get a contract, that he has $12,325, or $145 per car, in cash, a building owned or rented, a sales force, a service staff and a lot for used cars. Employes would total between twelve and 20. The used car lot is vital because when he has sold 85 new cars he will have received some 160 used cars as trade-ins.