With the announcement of liberal price cuts by the majority of automobile manufacturers, there arises the rather pertinent question as to just how much truth there is in the generosity which they all modestly flaunt before the dear public. Some manufacturers frankly admit that they are selling below cost at the new prices; others are more modest.
The curious part of this situation is that some cars are actually being sold for less than the cost to the manufacturer of the labor and material in them, but philanthropy is not a business policy to satisfy the average investor and there is, as usual, an excellent reason. Motor car manufactures have considerable stocks of raw materials, and a careful study of the markets by their experts has foretold a slump in these markets. Shrewd business sense has therefore dictated the policy of unloading the present inventory of raw material quickly, and at a loss if need be, in order that a falling market may not catch the manufacturer with a very costly inventory and the prospect of having to make it up for sale at a still greater loss. He must lose something; the sooner he does it the more he can save.
This situation does not strike so severely a number of very widely advertised cars whose makers were not unwilling to take advantage of the heavy demand to inflate prices far in excess of any economic justification. Such organizations are now philanthropically paying the way to lower car costs by the simple expedient of knocking off a few hundred dollars worth of frosting, leaving for themselves a cake that would still delight any moderately conscientious business man and still allowing the dear public to pay, for the privilege of purchasing their product, an advertising cost said to run from $100 to as high as $300 per car.
Can the dear public ever realize that the things that "are" good can prove their worth, may admit it, but never need should about it?