Winnipeg Free Press

Winnipeg Free Press (Newspaper) - October 7, 1916, Winnipeg, Manitoba Manitoba free october facts for motor the foundation and basis of All enlightened Here Are some facts concerning automobile values and prices which explain Why and How Studebaker offers Low prices and High Quality in its the automobile the automobile is the highest Type of i Oving either drawn or it is a highly developed containing three thousand Sepa late moving or frictional parts than a Railroad tiie locomotive runs Over a smooth the automobile is driven Over rough roads with Sharp turns and grades it is subject to far inure Wear and tear than the Obi it must then be necessary that Eachon of the three thousand automobile both moving and cooperate and function with the peat St possible the Quality of the Auto Mobile depends entirely n the Quality of the raw and the skill and experience with which it is designed and the locomotive at All times is operated and eared for by experienced engineers and skilled automobiles Are pirated by owners who sometimes possess Only limited mechanical therefore an automobile must lie designed and manufactured to meet every emergency of service and to withstand the abuse and us elect of unskillful who makes automobiles there arc Over one Hundred concerns making of which about ten Are while the others Are the manufacturer and operates a Complete manufacturing Plant consisting of an extensive engineering and experimental department and a Fli Finical Laboratory a Power Plant forge machine stamping body trim paint and assembling the assembler either or Plant con Sist ing usually of a ban building without Power Plant and without but equipped simply with assembling forms and Racks and Stock rooms for the finished parts which he purchases from parts manufacturers or he makes automobiles by put Ting these parts together in his assembling excessive Cost of assembled automobiles practically All manufacturers As Well As assemblers bin finished parts from such As electrical equipment and some minor and therefore the costs of both the manufacturer and assembler Are on a Par for these but these parts constitute less than of the Cost of an Auto other parts constitute about 80 of the of the the transmit steering body and top Mak ing up most of the a manufacturer manufactures these parts from raw material in his own plants roughly speaking is making 80 of his whereas the assembler who buys them from parts manufacturers is purchasing from middlemen practically 100 of his Studebaker manufactures in its own plants All of its steer ing bodies and liven some manufacturers buy axles and steering gears from Cost of manufacture assuming a car costs and deducting 20 or for the parts both manufacturer and As open cars four pour touring Bix six touring six Landau Sembler buy from the or represents the value which the manufacturer Sells at Only one but which the assembler must buy a the parts makers profit and the parts maker asks an average profit on these parts at least 25 above manufacturing1 this adds to the Cost of the Worth of parts which the assembler must and on which he must still add a Good sub Stantial profit of his the Selling Cost of any car consider the following table As the basis upon which the Selling Price of any car must be fixed items which make to Selling excess Cost assemblers of Assem Cost Cost bled car factory and Selling and general lenses say they arc same in both cases discount from list assuming 20 maximum makers totals increase this illustration shows a Selling Price of for the manufacturers car and for the assemblers the buyer must about More for the assembled car simply because it is an assembled the manufacturer gives his customer the Benefit of the saving derived from manufacturing his own whereas the assembler has to pay this excessive Cost and put the Burden on the manufacturers advantages it is Well known within the automobile Industry that Large with to invested in Complete plants and ample capital and Purchase the most modern and expensive and then in manufacturing their steering their costs Are if than parts manufacturers costs for the same manufacturers producing cars annually produce More parts of a specific Type than than any parts manufacturer As a parts manufacturers Are not specialists in the sense that they make Only one Type of body or Axle or although their total output May some time but rarely exceed the Quantity of any Large automobile they make numerous and hence do not obtain As Low manufacturing Cost As the Large automobile manufacturer the Large automobile manufacturer produces his own parts at a lower Cost than the parts manufacturer produces similar parts for an As Sembler who buys in Small and it follows that the 23 excess Cost of the assembler illustrated above is not another Point is that the buying parts Froni numerous and often the same part from several cannot obtain the same precision of machining and assembling in the finished car which the Large manufacturer still the assemblers profit per car is larger than the manufacturers because the Assem Bler usually Sells Only a few thousand cars the illustration shows that this profit is 60 More than the manufacturer and we believe this percentage is not also the dealers disc count is greater on the assembled because his list Price is As stated out of a Hundred automobile concerns about 90 Are assemblers and Only 10 manufacturers in the True sense of the this Means that Consumers Are paying 23 Premium to 90 of the automobile Over and above what they could buy the same cars and in much better from the Large Quantity production of automobiles vague statements Are frequently made concerning the effect of Quantity production in reducing manufacturing to illustrate this truth to Unin formed is necessary to state the elements that enter into costs and Selling prices of Many people will be astonished at the number of these the Basic Cost of an automobile is 1 the raw material contained in 2 the wages of the workmen who fashion the material into a finished the sum of these two items is the prime Cost and the actual car value the customer a costs and expenses beyond these Are of if value to 3 factory overhead expenses should be included providing the manufacturing methods Are direct and factory overhead expenses include supervision and factory organization expenses according to the intelligence of the person determine whether the output of the manufacturer is Large or whether the proper is purchased and at the right whether the design of the car is Correct and the manufacturing methods simple and we May say that factory overhead expenses Are a legitimate part of the actual car value received by the and if we admit these three representing manufacturing Are All the actual car value the customer in making up the Selling other items Are As follows 4 advertising and Selling and general 5 discount allowed automobile dealers who sell the customer and give him service 6 manufacturers or assemblers Quantity production distributes expense the total of these six items comprises the Selling it May be but it is True that every one of these six items must and does vary with every Small whether he is a manufacturer or an necessarily suffers an increase in every one of these six and must therefore charge More for his car than the Large illustrating we will take the cars of a manufacturer a cars per and either a Small manufacturer or the usual assembler b producing commencing with item raw it should be obvious that a can obtain much lower prices than b for the same because has buying Power and purchases Are seven and a half times in item it is obvious that a can employ skilled mechanics in specialized single operations to a greater extent than and consequently increased its output from cars in 1914 to in 1915 and from in 1915 to cars in m6 be s of the six was in to and in 1916 and each year the car was better than the preceding these significant reductions in once were made possible increase in e last fourteen months Studebaker has produced and sold More seven passenger site a Vii passenger foes than any other manufacturer in the world for a like thus Studebaker As the worlds largest manufacturer of Fine cars Canadian All Studebaker cars sold in Canada Are made in Canada obtain better work and More work from the same in item factory overhead it is obvious that owning highest most modern Labo saving can eliminate excessive labor and supervision that expenses of non productive such Asen Are much less per car than in the Case of to a machine that costs a costs thirty three and on third cents of each Auto Mobile he turns it costs b two dollars and a half on each automobile he trims the same is True of salaries the salary of a Engineer employed by a Only thirty three and on third cents to the Cost of the whereas if b employs a Man of equal ability and his Cost is per the same excess Cost for b occurs inthe Case of purchasing factory with an animal factory overhead expense for his Cost per car would be whereas a overhead b would per Quantity production reduces Quantity production reduces the Cost per car for item Selling and advertising and general in the same supposing the annual expenses of a Are the Cost is Only per which is much less than the aver age person imagines this charge to in the illustration ave have allowed b per which on a basis of cars per makes his expenses which he can get through with if he maintains no Branch offices but markets his cars thro Rygh dealers in the Case of item Quantity manufacturers a allow Deal is smaller percentages of usually running from 25 according to the size of whereas smaller makers b allow from 20 to 40 because their dealers sell fewer cars and must therefore receive a greater discount per car to make a the expenses of dealers average the same whether they handle a Quantity production car or a Small production and manifestly the dealers the former Selling seven and half times More cars than in the latter Caser can afford and actually do receive a less per the dealers at the same amounts More the list Price of the car in the illustration it is shown As on the car a against on the car using 20 percent in both so that Quan Tity production saves the buyer on this item the makers what has been said regarding dealers discount applies with equal Force to item makers which in the Case of Quantity production a rarely exceeds per but in the Case of production b usually amounts to at least 60 because of the latter makers smaller the Large profits being made by Small matter of Public record As shown by annual reports of these prove truth of this these profits often Rah from to car for cars Selling for less whereas no Quantity manufacturer a makes any such profit per any concern which buys its trans steering bodies and parts comprising 80 of the Cost of an Auto from parts is necessarily taxing buyers about 23 Premium because of this this truth explains the difference in Price of from to in different cars on the Market of apparently the same this truth is Well recognized in the automobile closed cars six touring six six commercial cars commercial half ton commercial half ton commercial half ton commercial one ton express Western Canada motor car company 263 Edmonton Street phones 94845 ;