Competition in Automobiles

Report Outline
Cross Currents in Passenger Car Industry
Difficulties of Manufacturers and Dealers
Shape of Future for Passenger Automobiles
Special Focus

Cross Currents in Passenger Car Industry

A fight for supremacy between the giant automobile manufacturers, and for survival among the independent producers and sellers of passenger cars, is in full swing. It has intensified not only competition but also the trend toward monopoly in an industry that, paradoxically, is at once highly competitive and highly concentrated.

Distress in certain sectors of the business, brought on by the current struggle, has evoked concern among observers who look on the motor vehicle industry as something of a barometer for the economy as a whole. From an overall production standpoint, however, the outlook is not gloomy. Output of passenger cars so far this year has been lower than last year-much lower for certain makes-but the industry nevertheless appears to be on its way to achieving a production record that will be the third or fourth highest in history.

Total passenger-car output in the first five months of the year dropped off only 8 per cent-from 2,667,168 cars in 1953 to 2,453,579 cars in 1954. But the picture was different at the consumer level. As a result of lagging dealer sales, unsold new car inventories had mounted by June 10 to a total of 647,000 units-about 44 per cent higher than a year earlier-and used car stocks in the hands of new car dealers to more than 700,000 units. The biggest declines in both production and sales have taken place for the most part among the so-called independent producers and their dealers.