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Motor Trade

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MOTOR TRADE : Its Prospects as a Career.—This article purposes to deal with the motor trade solely from the point of view of the man who proposes to invest money in it, or contemplates going into the business as an employee or salesman.

At the commencement of the industry a very considerable sum of money was made by company promoters—largely owing to their perfectly accurate and incidentally optimistic predictions for the rosy future of motor-cars. That is to say, nearly all the present developments which have come about were foreseen and exploited when drafting the prospectus ; but actually none of these developments came into being in a practical form for some time—for many reasons. The public, for instance, had not been edu cated to the fact that a motor-car, to run successfully, had to be most carefully and accurately made ; again, the expense of producing satisfactory and efficient inahines was very great, added to which, the steels necessary for producing light yet strong machinery, such as is required for motor-cars, did not exist ; therefore one may say that in the early days the investor lost money, although the company promoter in sonic cases made considerable sums. At the begin ning it was a most unfesirable industry in which to invest money, because the manufacturers had to learn their business at the expense of the investor. 'file result of this was, of course, that a great slump took place from the point of view of the investing public. When motor-cars had proved their utility and buyers began to appear, there were not sufficient well-equipped factories, both from a mechanical and monetary point of view, to meet the demand, with the consequent result that motor-cars had to be sold for very large sums of money. Here again the public got an exaggerated idea of the profits to be made by manufacturing motor-cars, and thus added impetus was given to the investor, for he thought he saw marvellous profits before him in the motor-car business. Some few firms did make abnormal profits, and curiously enough in some instances these very large profits were made by firms who sold motor-cars very cheaply. This cheapness was arrived at in two ways—

firstly, by taking very good care not to give too much value for money ; and secondly, by turning out a very great number of cars, and thus having a vast turnover, out of all proportion to the capital employed, which turnover seemed to show very large net profits.

This again was abnormal, and in most cases, in one, or at the outside two years of this money making., these companies fell back to very small profits, and in some cases even showed large losses.

It is well to understand that the motor-car trade, unless some extra ordinary boom takes place, which no one believes possible, is really a sound engineering commercial business which will show a very proper return for money invested, and which in some years will even show an abnormal return ; when, for instance, a popular model has been evolved, of which the manufacturers can turn out an unusual quantity of replicas. The result of such a coup is to send up profits, and for a year, maybe, extra ordinary prosperity will follow. The investor under these circumstances must be pleased at this prosperity, but must not expect it to continue. There is a good field in motor-car manufacturing and selling for the investor, but nothing abnormal ; and if any abnormal factor of prosperity exists, the investor must not expect it to continue for ever.

The possibilities of the motor trade are far from exhausted—in fact, one may almost say that they are still only just beginning. So long as it is sible to go into the streets of our great towns and see the thousands of horses and carts still in use, so long may it be assumed that the motor business has not yet reached its zenith. This will not happen until every one of these horses and carts has been replaced by a motor. When this happy state of affairs finally arrives the motor-car will no doubt be infinitely cheaper than it is to-day, owing to the enormous numbers manufactured and the standardising of manufacture that will have been achieved.

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