WardsAuto Flashback – October 2014

85 Years Ago (October 1929): Record U.S. Output Forecast; Canada Production Peak; Luxury Demand Strong

Despite a late-September seasonal decline that is expected to continue into October, Cram’s Automotive Reports forecasts car and truck output of a record 5.5 million units in the U.S. and Canada for the year. The outlook is based on a strong output increase in January-August to 4,443,450 units from 3,236,364 in like-1928. The gain is due in large part to the ramp-up of Ford Model A production following a lengthy changeover from the Model T a year ago.  The publication points out Ford that accounts for all but 187,733 units of the year-over-year gain. Despite softening sales, CAR calls fourth-quarter output of the 1,075,000 vehicles needed to reach 5.5 million for the year “easily attainable.”

Demand for high-price cars like this ’30 Duesenberg remains strong.

At the same time, vehicle production in Canada alone is forecast at a record 242,000-plus units in 1929. Truck output is seen as particularly strong with output through July of 40,609 units, equal to 89% of the 45,641 trucks built in entire-1928. Production of 165,213 cars in the first seven months equals 84% of the 196,741 units turned out in all of 1928.

As October closes, the production downturn is being felt most acutely in the low-price field, according to Cram’s, although the full repercussions of the Oct. 29 stock market crash is yet to be appreciated.

Peerless reports robust demand its cars, such as this ’30 model.

Production of medium- and high-price cars remains strong, the newsletter says, pointing out that shipments of some 11,000 Auburn and Cord cars in October are 60% ahead of like-1928. Output at Auburn subsidiary Duesenberg is scheduled at an all-time high of 35 cars daily. Oct. 12 recorded the largest single-day sale of Duesenbergs ever, totaling some $300,000. At the same time, luxury marques, Packard, Peerless and Pierce-Arrow say strong demand will keep their facilities operating at a fast pace through November.

Meanwhile, Auburn has begun construction of a new 68,000-sq.-ft. (6,317 sq.-m.)  administration building in Auburn, IN, that encompasses an 11,100-sq.-ft. (1,031 sq.-m) showroom.

75 Years Ago (October 1939): Sales Strong; Reo Comeback Seen; Ford Hikes Prices; Tire Suits Ended; Finance Terms Set

According to a Ward’s Automotive Reports analysis, U.S. new-car sales in the first eight months of 1939 reach 1,821,043 units, up more than 500,000, or 45.6%, from 1,250,873 in like-1938. At 424,657 units, Chevrolet is in first place with a 35.6% increase over like-1938. Combined sales of Ford and Mercury brands rank second at 380,795 cars, a gain of 45.1%. In third place, with 254,651 deliveries, is Plymouth, sporting a 46.4% year-over-year gain. A U.S. federal court has cleared the way for Reo to resume truck production under a plan being submitted to stockholders.

The proposal, ending two years of financial difficulties, calls for the creation of a trusteeship to run the company until a $2.0 million loan from the federal-government-backed Reconstruction Finance Corp. is repaid. The loan is contingent on stockholder approval of the rescue plan. Court testimony indicated a reorganized Reo will break even on production of 5,000 trucks annually – less than were built in 1938 – and make a “good” profit on output of 6,000 units.

According to WAR, Ford is the first automaker to raise prices on its ’40 models with other makes so-far holding the line or reducing prices slightly. Ford, Mercury and Lincoln-Zephyr price tags are going up between $20 and $40. The newsletter says Ford “apparently” foresees increased materials costs that may force other brands to hike prices as the ’40 model year progresses. However, actual retail transaction prices for all makes are expected to be lower on ’40 models, due to manufacturers’ more liberal dealer-price allowances.

Supreme Court kills FTC Goodyear-Sears price-fixing move.

The Supreme Court effectively ends the 5-year-old Goodyear Tire-Sears Roebuck price-fixing case by declining to review an appellate court ruling setting aside a Federal Trade Commission finding that Goodyear violated the Clayton Act by selling tires to Sears for less than it charged other customers. However, the tire maker already has terminated its Sears contract and the retailer now obtains tires from other manufacturers, including Armstrong Tire & Rubber. The High Court also refuses to interfere with an appeals court ruling that General Tire & Rubber infringed patents held by Fisk Rubber.

The National Association of Sales Finance Cos. has set auto finance terms for the coming year for its members operating east of the Rocky Mountains. Contracts on new cars, and those not more than two years old, require a down payment of one-third of the delivered price, including accessories, with the remainder payable over a term of not more than 18 months. For older models, the down payment remains the same, but the balance must be repaid within 12 months.

70 Years Ago (October 1944):  Labor Shortage Critical; Light-Trucks Quota Announced; Ford’s $500 Car

It appears unlikely the auto industry will meet even the War Production Board’s revised order for 850,000 medium and heavy trucks, truck-tractors and trailers this year, down from an original order for 1.0 million units. The problem is an acute shortage of workers, especially in in foundry, forge and tire-making operations. Through August the industry has only been able to meet an estimated 70% of the revised plan, despite robust recruitment efforts by the War Manpower Commission. In addition, it is reported that casting and forging operations are being hampered by a high rejection rate resulting from an increasingly inexperienced workforce. Any production shortfall is expected to be rolled over into 1945 requisitions.

1944 military truck output likely to fall short of plan.

Although war material production will remain a top priority, the WPB has authorized production of 20,000 light-duty trucks in first-half 1945. The move is the result of a War Food Admin. request for at least 150,000 light-duty units, mostly delivery trucks, as early as possible. Although output is expected to be allotted at the rate of 10,000 units in each of the first two quarters, Ward’s says some higher volume manufacturers may be allowed to build their entire quota at one time. Chevrolet, with an allocation of 6,719 units, has been allotted the highest volume. Ford, at 6,287 units, is second, while Dodge, with 3,259 vehicles, is third. International is fourth, with an order for 2,457 units, with the remaining volume split among GM Truck & Coach, Willys-Overland and Diamond T.

Ford’s $500 post-war car an updated Model T?

Much speculation has arisen from a statement from a high-ranking Ford official that the automaker is readying a low-cost post-war car to sell for about $500. It would be marketed in addition to Ford’s standard range of V-8 and 6-cyl. models. The new car reportedly would be a 6-passenger model powered by a 4- or 5-cyl. engine. Ward’s says the “announcement” may have been made to generate publicity for the company, as its Dearborn offices have been inundated with requests for more information from dealers and potential customers. Although analysts have speculated that the car would be a “glorified” Model T, Ward’s says the “$500 price tag would be an achievement difficult even for this extraordinary manufacturer to realize.”

60 Years Ago (October 1954):  Hudson Drops Step-Down; GM’s Sporty Wagons; Brighter Headlamps; Engineers Predict Future

Confirming earlier rumors, the Chairman of newly formed American Motors tells reporters that Hudson will abandon its unique “Step-Down” platform design for ’55, instead adopting Nash’s unit-body structure. Thus, the upcoming models will be based on the Nash body, but feature Hudson-specific styling cues. It will be built in AMC’s Kenosha, WI, plant rather than Hudson’s Detroit facility, where component and military-vehicle output will continue.  

’54 Hudson last to use famed step down platform.

The AMC executive also tells WAR  it is investigating the possibility of using the smaller of Packard’s two all-new V-8 engines for upscale Hudson and Nash models, along with Packard’s Ultramatic automatic transmission. At the same time, AMC says its Kelvinator home-appliance division will introduce an improved lineup for 1955 and will continue supplying components for appliances manufactured by GM’s Frigidaire Div.

In a series of October “Bulletins,” Ward’s says: (1) GM is leading the way in developing a more secure auto door latch that will resist body flex to a greater degree than most current latches. “Body weaving all too often causes poorly engaged rotary door latches to open suddenly. If a passenger is leaning on the door, he is unexpectedly hurtled out of the moving vehicle;” (2) Chevrolet and Pontiac will feature sporty 2-door station wagons for ’55 based on the Chevy Nomad concept car. “This futuristic design could be the sports car styling sensation of the year;” (3) Chevrolet’s chief engineer says he believes problems involved with designing a V-6 engine are not insurmountable; (4) A Spring 1956 intro now appears likely for the all-new Lincoln Continental 2-door luxury car. It is being handled by the new Continental Div. “headed by the youngest of the three Ford brothers.”    

Sporty Pontiac Safari wagon, cousin of Chevy Nomad.

A new sealed beam headlamp design is expected to be standard equipment across all car lines by mid-1955. The lamp, designed in collaboration with automakers, headlamp manufacturers, U.S. state and Canadian provincial governments, produces more light, reduces glare and increases vision in rain and fog. The new design, marking the first “serious improvement in lighting since seal beam lamps were adopted on ’40 models,” will be available for 6- and 12-volt electrical systems.

At an Oct. 27-29 meeting of the American Society of Body Engineers in Detroit, attendees say that by 1970 some domestic cars will have rear-mounted engines, others will sport front-wheel drive and an increasing number of them will feature unitized body construction. They also say the development of super highways with higher sustained speeds may lead to a preference for “fastback” styling. In addition, automotive suppliers display some of their newest products, ranging from an all-nylon pneumatic windshield wiper motor for trucks, to a 3-way rearview mirror for cars that cuts nighttime light reflection and glare by 97%. Also on display are curved plate-glass roof sections for greater visibility.

50 Years Ago (October 1964):  GM Strike Drags; New Indy Car Rules; Truck Buyers Like “Six”; Mustang Output Lags

The national contract strike by the UAW against General Motors that began on Sept. 25 is resolved with a tentative agreement on Oct. 5, but most GM plants stay idle through Oct. 19 as 130 union locals stay out pending resolution of local issues. Some estimates indicate GM lost production in excess of 200,000 vehicles during the walkout and analysts question whether or not the automaker can recoup all or most of those losses through the end of the year. Also in October, the UAW stages a 3-day walkout at American Motors. AMC is said to have lost production of 4,000-6,000 cars during the shutdown. In addition to benefits similar to those in the Big Three contracts, AMC’s pioneering profit sharing agreement, negotiated in 1961, will be continued.

The United States Auto Club votes to cut engine displacement for cars competing in the Indianapolis 500 race to 183 cid (3.0L) from the 254 cid (4.2L), effective in 1967. A minimum weight of 1,250 lbs. (567 kg) has been set, and additional safety equipment mandated. Meanwhile, Ford calls for creation of a strong central governing body to oversee and sanction all professional auto racing in the U.S.

Popular ’65 Chevy Impala hit by lengthy UAW-GM strike.

Buyers of ’64-model Chevy light, medium and heavy trucks favored the 6-cyl. engine by a wide margin, with only 23% opting for a V-8. That compares with a V-8 installation rate of 19% in ’63. At the same time, an automatic transmission was installed in just 6% of ’64 models, virtually the same as in ’63. The column-shift 3-speed manual gearbox was installed in 56% of ’64 trucks in all weight classes, while the floor-shift 4-speed went into 33%. Five- and 8-speed manual transmissions, available only in medium- and heavy-duty models, accounted for the remaining 5%.

Despite a mid-September increase to 1,700 units daily, Ford plants in Dearborn and San Jose, CA, are having difficulty paring the backlog of orders for the hot new Mustang. As of Sept. 30, U.S. dealers held a mere 17 days’ supply. Ward’s says Ford plans to build 325,000 of the cars in calendar 1964, and forecasts production of more than 400,000 units in 1965. According to a WAR survey, 49% of the 200,000-plus Mustangs built through September left the plants with an automatic transmission, 31% had optional power steering, 51% an optional center console and 88% extra-cost whitewall tires. Mustang buyers have a median age of 31 years and median income of $9,100. Ford reports 62% of them are under 35 years old and 37% are women.

25 Years Ago (October 1989):  European Ventures Abound; Ford Drops Merkur; Plant Closings Loom

A host of joint ventures and automaker buy-ins are in the news, starting with the announcement that Ford has increased its ownership in Jaguar, for the second time in less than a month, to 12%. Ford and says it will acquire 100% of the British carmaker if foreign ownership restrictions are lifted. Ford’s Jaguar stake comes at the same time it ends talks to acquire a 50% interest in Saab-Scania’s automotive operations.

Ford eyes ownership of Jaguar in 1989.

Meanwhile, from France comes word that state-owned Regie Renault is exploring a possible merger with AB Volvo that would create the world’s fourth-largest auto company and its largest truck manufacturer. At the same time, Fiat and Daimler-Benz are exploring possible linking of their medium- and heavy-truck operations. On the other hand, Honda says it has no plans to acquire Britain’s Rover Group, but will take a 20% stake in the automaker with whom it has been collaborating for a decade. Several current Rover cars are based on Honda models and Rover builds some Hondas for sale in the U.K.

After a disappointing 4-year run, Ford is dissolving the Merkur franchise held by a number of Lincoln-Mercury dealers and ending importation of the slow-selling Scorpio sedan, first introduced in ’87. A year ago, Ford stopped selling the sporty Merkur XR4Ti 2-door hatchback after that car also failed to reach sales targets. Reportedly, Ford now will focus exclusively on Jaguar to compete with imported luxury brands in North America.

WAR says a number of plant closures loom on the horizon in the early 1990s, starting with GM’s Lordstown, OH, truck and Scarborough, ON, Canada, van plants. Those facilities are set to close after G-body van production is consolidated at the Flint truck plant early in 1992. Van Nuys, CA, likely will close when next-generation Chevrolet Camaro and Pontiac Firebird models move to the Ste. Therese, QE, Canada, plant in late-1992 or early 1993. In addition, there is no new product slated for the Pontiac, MI, Fiero plant. Meanwhile, Chrysler says it is ending L-body Dodge Omni/Plymouth Horizon production due to poor sales of the 10-year-old cars and closing its ancient Jefferson Ave plant in Detroit.

New Infiniti Q45 first Japanese car hit with gas guzzler tax.

Nissan’s new Infiniti Q45 luxury car is the first Japanese-brand car subject to the U.S. gas guzzler tax that ranges from $500 for a car getting less than 22.5 mpg (10.5 L/100 km) combined city/highway fuel economy to $3,850 for one getting less than 12.5 mpg (18.8 L/100 km). Vehicles with a GVW greater than 6,000 lbs. (2,722 kg) are exempt. That the car is being hit with a $500 levy is surprising, the newsletter says, given that Nissan went to “great lengths to avoid the guzzler tax on its 300ZX sports car.” Besides low-volume specialty nameplates like Porsche, Ferrari and Maserati, cars subject to the tax include Cadillac’s Allante and the rear-drive Brougham equipped with the optional 5.7L V-8 and towing package.