MERGERS RUMOURED

Sun (Auckland), Volume I, Issue 296, 6 March 1928, Page 6

MERGERS RUMOURED

COMPETITION IN U.S.A. Reports and rumours of mergers and probable combinations of motor manufacturers are again current in America. Many names are mentioned as probable participants in a huge pooling of resources made necessary by competition, but the companies named always flatly deny the reports. The rumours are probably based on the proved fact that only companies with tremendous resources can survive. Since the birth of the motor industry 800 manufacturers have gone out of business, and now only 23 car manufacturers are operating.

Reasons for this are the continued improvements in cars, always effected without the increase of price, and frequently accompanied by price reductions. In order to give more for the same—or less—money, manufacturers must be financially strong. If they cannot keep up in the competitive race, they must close down for lack of buyers.

Merging of interests such as that effected by General Motors gives manufacturers a big advantage in buying, testing, designing and manufacturing, and would reduce competition among the contributing companies to some extent. Experts consider that at least one combination of several makers will be achieved bc.*fore this year ends. Dodge Brothers have now produced over 2,000,000 cars. The 2,000,000 th was ordered by a Seattle agent over eight years ago; it has been delivered to him.