WHAT ABOUT YOUR NEW CAR?
Royd E. Beamish
IN OCTOBER and November, if all goes well, dealers across Canada will be receiving the first new automobiles to have gone into their display rooms since the spring of 1942. It is estimated that by Christmas there will be more than 15,000 of them available for civilian consumption.
The figure is only a drop in the bucket compared with the expected demand, hut it will signal, more convincingly than any other single industrial achievement, Canada’s return to a peacetime economy. For, despite the war and all the advances of science, the automobile industry is still the kingpin of mass production—the symbol of a way of life. It touches more lives more intimately than any other manufacturing field, and its products are both an economic and social force in at least a third of Canada’s families.
Of even greater significance, however, is the fact that those 15,000 passenger cars represent a promise of many more thousands to come. Reconversion from wartime production and tooling up for peacetime manufacture are the two biggest obstacles in the way of the automobile companies in their race for the consumer market. Both of these will have been licked when the first car rolls off the assembly line. The trickle will become a steady stream quickly once the dam is breached.
One of t he biggest automotive companies estimates that by the end of 1946 the industry will have produced at least 200,000 cars, with prospects of continued production at that rate for another two or three years. Which, in the opinion of this company, means that within the next 12 months the man who wants to buy a car should be able to go to a dealer, try out a demonstrator, and make his purchase without coming up against the bugbears of waiting lists, priorities, or even very long delays. That statement is frankly speculation, but it is speculation based on the honest opinion of men high in the automotive industry. •
For the immediate present, however, and until the end of this year at least, priorities will almost certainly govern the distribution of automobiles produced in Canada. The Government has already announced that permits to buy new cars will be issued to essential users on the same basis that tire purchase permits are now available. With only 20,000 cars or so on the market, some system of controls will be inevitable. But there are only a litt le mure than a million automobile owners in Canada, and it. is doubt ful if more than 5% of that number can qualify under the category of “essential user.” Hence the time will come-—and quickly, manufacturers believe—when the field will be thrown open to all comers.
Once this takes place the big backlogs of advance orders will get dealer preference. Tens of thousands of motorists have put their names on waiting lists all across Canada during the past few years; many have paid deposits or even gone so far as to turn in their old cars and accept credit notes on new ones. They’ll get first chance on the open market.
But after that, three things are expected to happen which will open up the new-car market to a considerable degree. Market surveys have indicated that there is a potential demand for anywhere between 700,000
and 1,000,000 new cars. But there are a lot of variable factors to limit the immediate demand and probably reduce it considerably below this figure.
MANUFACTURERS believe that it’s one thing to
say, “The first thing I want to buy after the war is a new car,” and quite another thing to make the down payment and sign the finance company’s contract for the balance. Perhaps immediate house repairs have become imperative. Or Dad’s wartime job is gone and his new one doesn’t include so much overtime, so that financing a new car becomes a more difficult proposition than it seemed a year or two earlier. Or the oldest boy is ready for college and the family budget is revised accordingly. One way or another, a lot of potential new-car buyers are going to decide to “keep the old bus running another year.” The second mitigating factor will be that most newcar sales will be made on a trade-in basis and the usedcar market will gain strength again. True, a lot of vehicles on the road today will be unfit for any kind of reliable service and will go directly to the scrap heap, but most cars have received greater care in the past five years than they ever did before the war, and gas rationing has certainly kept the mileage from piling up. It’s mileage more than years that ages a car; consequently many a 1938 and 1939 model will have plenty of Useful life left for some used-car buyer. And thousands of Canadians who would like to buy new cars will compromise by getting secondhand machines.
A third Restraining influence may very well be the new cars themselves. So much has been written in speculation about the postwar car and so many “Buck Rogers” predictions have been made concerning its design and possibilities that a good many people are bound to be openly disappointed when the 1946 models appear.
In the United States three newcomers to the automotive field are promising some rather startling innovations in the models they are planning for production, as we shall see in a moment. But the established manufacturers are sceptical. They, at any rate, are going to start out with the orthodox automobile you knew before the war. There will be about as
Here's the dope on the car situation — what's coming this year and next and your chances of becoming a buyer
much difference between the 1946 car and the 1942 model as between models in successive years before the war—no less and not much more. Bodies may be a bit more streamlined and appearance improved with chromium trim in the right places, and a number of engineering improvements will certainly be present, but that’s about all. There will be no superstreamlined cars, no cars with engines in the rear and none equipped to burn 100-octane gasoline, despite the dreams of so many.
That doesn’t mean such things are not coming eventually. The next three or four years are going to see some breath-taking developments, according to men who have been behind the locked doors of the automobile designing rooms and come out again, sworn to secrecy but able to talk in vague, general terms of what they have seen.
The catch is that when people talk about the postwar car and the 1946 car they are talking about two entirely different things. When the automobile industry was ordered to stop making passenger cars and switch its whole weight of production to war supplies, their designing and engineering branches took two steps toward assuring speedy reconversion at the end of the war.
First, they put away their 1942 dies and machinery and drafted designs of a car that could utilize the same manufacturing equipment, so that there would be as little delay as possible in getting under way once peace gave them the green light. That’s the car you’ll get in 1946. As various engineering improvements developed under the stimulus of wartime production and research, they were incorporated in the plans for this model, as long as they did not require any big changes in the vehicle’s fundamental design. Hence the 1946 car will have a number of improvements over its immediate predecessor.
AT THE same time, however, the manufacturers XTL got ready for Phase 2 of their reconversion program. Behind locked doors and soundproofed walls other designers worked, whenever they could be spared from war production, to plan what the industry called the “194X” model. This was to be a completely redesigned automobile, requiring new dies and a complete tooling-up job. Engineers were free to make more radical changes, because the car could be built new from the ground up. That’s the car you should see in the showrooms in 1947 or 1948. The actual date depends on how long it takes them to iron out the “bugs.”
Numbered among the changes predicted for these later models are such things as greater visibility, accomplished by abolishing the solid posts at either end of the windshield and casting the glass in a solid piece that will curve around to the lintels of the forward doors. Some companies are experimenting with top sections made entirely of flexible, unbreakable glass in a single piece, providing all-round visibility. Rear windows in conventional bodies will be wider and deeper Continued on page 51
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What About Your New Car?
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and may be equipped with wipers. There will be more leg room and seats may be adjustable upward and downward as well as backward and forward.
Corresponding developments are predicted in the engine and chassis of these new cars. Engineers are working on motors that can use 100-octane aviation gas and others are going to the opposite end of the scale and developing Diesel motors for passenger cars, which will burn crude oil. Smaller engines without sacrifice of power are considered just about inevitable, in any event.
But all that is still in the future, and you can depend on it that every major manufacturer has some secrets up his sleeve for the 194X model that he won’t even talk to himself about. Right now the automotive men are concerned with their 1946 models and the production headaches presented by their gigantic reconversion plans;
As one major executive put it: “This is the ‘iffiest’ period we’ve ever been through, and that’s going some. But don’t quote me—somebody might get the idea I’m confused.”
General Motors of Canada is the only manufacturer to date to venture anything like a specific prediction. Currently engaged in a reconversion program to change over from production of tank hulls to automobiles, General Motors estimate it will take them 700,000 manhours to accomplish the job. That means a thousand men working for almost six months. But they’ll have one passenger car assembly line and one civilian truck line in operation in September or October, and they are confident that the automobiles will be rolling well before the end of the latter month.
Shortly after V-E Day, Supply Minister C. D. Howe announced that the Canadian automobile industry would be permitted to manufacture
10.000 cars in 1945. Of the total, General Motors was allotted 4,100. Now that V-J Day has come along in the interim, and the restrictions have been removed, General Motors expect to exceed the original quota by a considerable figure. With “favorable” labor and supply conditions they hope to double it, and with “good” conditions they look forward to producing as many cars as were originally allotted to the whole industry.
Before the war General Motors produced about 40% of all passenger cars sold in Canada, so that, if they can produce 8,000 cars and the other companies contribute their relative proportions, Canada should get 20,000 automobiles by the end of the year. If General Motors reach 10,000 the total should jump to 25,000 for all makers in this country.
Practically every automobile manufacturer agrees that the industry could turn out the entire million cars, reputedly in demand, in two years if it wanted to. By making use of all existing capacity and running three shifts on the assembly lines, the achievement is theoretically possible. But the aftermath would be a terrible economic headache. Much more likely, they predict, is a production of about
200.000 cars a year for three years— twice the immediate pre-war level— followed by a gradual scaling down until supply and demand meet each other at a point somewhere around the
150.000 mark. Some manufacturers believe even 200,000 cars a year is too high, and all agree that a sudden shift in the economic picture could make any
prediction look ridiculous overnight. But, barring any drastic changes, the 200,000-car figure is considered by many as a .safe production level.
The Big Three of the industry— General Motors, Chrysler and Ford — produce their cars, particularly their low-priced models, almost entirely in Canada, with Canadian subcontractors supplying the bulk of their subassemblies. Hence, with restrictions on production removed, they can turn out cars at a rate governed mainly by labor and supplies.
When quotas were first announced all three companies planned to start out with their low-priced machines, producing only one make and one model. That was one of the Government’s stipulations. Now they are free to go beyond that, but, since original orders and tooling installations were made on that basis, it will be Chevrolet, Plymouth and Ford cars that reach the public first. Pontiac, Dodge, Mercury and the higher-priced cars manufactured by the Big Three will come along as the supply and production picture eases.
Studebaker, Hudson, Nash and Willys have a different problem to contend with. Their cars are assembled in Canada, but the parts must be imported from the United States, and in that country the motor industry is still on a strict quota basis. How many cars they can produce this year and next will depend upon the allocations they receive from their parent companies across the line. But they will be in there with the rest, and October is the month they have set for their initial production, too.
What About Prices?
The question of new car prices is surrounded with almost as many “ifs” as everything else in the industry. At the moment Wartime Prices and Trade Board authorities state that 1941 prices will be used as a basis for 1946 ceilings. And on the surface there seems to be no reason why this should not he the case, although manufacturers grow really emotional when the question of costs comes up.
Labor costs, they declare, have risen at least 15% during the war. If that represents the peak, they calculate they can still achieve production on 1941 levels, but if wages have to go any higher, the story, they say, will be quite different, because at least 80% of the cost of a car, they say, is represented by labor. And they point to the United States, where the United Automobile Workers of America have presented a demand for a flat 30% increase in wages. If the increase is granted there, Canadian unions will undoubtedly press for a similar boost and then ceilings will have to go up.
If wage rates remain about the same as they were on V-J Day, however, a standard coach in the ChevroletPlymouth-Ford class should cost about $1,200. That was the general level in 1941. It’s higher than pre-war costs, though, because in 1939 those three cars sold for about $1,000 each. Imposition of a 25% excise tax boosted the cost in war years, but the subsequent 15% increase in labor costs has been offset by a reduction of the tax to 10%.
Here, in theory at any rate, is the way the price structure works out.
(Incl. profit Wage
Year margin) Incr. Excise Tax Total
193Ö .. $1,000 ...... ...... $1.000
1941 .. 1,000 ...... $250 (25%) 1.250
1946 .. 1,000 $150(15%) $100(10%) 1,250
In addition to revision which might be required by any major change in the basic wage structure, there is the possi-
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bility of costs being increased as a result of price gains in the supply field. Some companies making subassemblies for automobiles have been granted relaxation in their price ceilings and their products may cost the automobile manufacturer more than they used to. If this happens WPTB will certainly have to meet strong pressure on their new-car ceilings.
While Canada can expect to see only the old, familiar automobile names in ,the showrooms during the next year, the United States industry offers all kinds of intriguing possibilities with the entry of three dark horse candidates into the car manufacturing field. They are the fabulous Henry J. Kaiser, Powel Crosley, Jr., and the darkest dark horse of all, Joseph W. Frazer, who recently bought out GrahamPaige. If they meet success in the U. S. markets their cars will undoubtedly find their way into this country too.
Kaiser, who achieved world-wide fame in wartime shipbuilding, is planning to put his mass-production genius to work in the low-price car field and is reportedly aiming at a light model of revolutionary design. He once publicly announced his intention of producing a “$400 postwar car,” and Detroitrumors say it will have its engine mounted in the rear. The only sure thing at the moment is that the car will bear his own name.
The new Frazer is equally surrounded in mystery, but Joseph W. is on record predicting use of a “squeakproof, one-piece body,” the lightest engine in history and perhaps a rearengine model. Powel Crosley has said he will concentrate on production of a new, light car, “much improved in design and manufacture over the prewar model.” Dopesters have puffed up a choice selection of predictions concerning all three, but the industry itself is just settling back to await developments. Since new-car production in the U. S. is to be based on 1942 figures, the established companies don’t expect any of these three to be a factor before 1947.
The possibility of rear-engined cars coming onto the market may intrigue
the general public, but established automobile designers so far profess nothing but scepticism on the question.
“If putting the engine in the rear would give more safety, better design or increased performance, we’d have done it long ago,” one big manufacturer declared. “There will be a few thousand people who will buy a car simply because it has something new and different like that, but most car owners want those three things— safety, style and performance. As far as we’re concerned, putting the engine in the rear is unsound engineering.” Most persistent rumor concerning the “old-line” companies centres around the possibility of a new, lowerpriced car reputedly under consideration by both Ford and General Motors. Rumors began as long ago as 1942 that Ford would produce a four-cylinder car aimed at the market he originally captured with his old Model “T.” Executives of the company in Detroit do not talk about this at all, but, significantly, they do not deny the talk. Alfred P. Sloan, president of General Motors Corp., quashed rumors of a projected $500 Chevrolet last June, but left room for some speculation when he announced that “a smaller, more economical Chevrolet will be built, but the price will not be much lower than the pre-war model.”
Car dealers, who have had to get out of their plush salesrooms and concentrate on the repair shop for their bread and butter in the past few years, are not inordinately concerned about either price or engineering developments in the new cars. Some of them have orders on hand, with deposits or tradeins already made, which will assure them of more sales than they made in any recent pre-war year. Many have at least two thirds of a normal year’s business already contracted for. On the surface this would suggest that the demand throughout 1946 will exceed supply, but if the factories hit the 200,000-car level that some are predicting, dealers will get twice as many cars as they did in 1938 or 1939, and it is on this assumption that they base their prediction of more or less “normal” marketing by the end of next year.