From the Rolls-Royce experimental archive: a quarter of a million communications from Rolls-Royce, 1906 to 1960's. Documents from the Sir Henry Royce Memorial Foundation (SHRMF).
Article from an automotive industry publication discussing dealer-manufacturer relationships and business practices.
| Identifier | ExFiles\Box 50\3\ Scan048 | |
| Date | 6th January 1921 | |
| January 6, 1921 AUTOMOTIVE INDUSTRIES THE AUTOMOBILE 3 I am giving you this just as they put it to me. My opinion is that if the manufacturer does not do something soon to get his dealer organization together and regain their confidence that the different manufacturers will be bidding against each other trying to get the best representative, because he, the manufacturer, will get desperate and will do these things in order to save his factory organization. 6—There will be no shakeup in our dealers. Our factory has been running almost continually. I do know, though, of a lot of dealers who are dissatisfied with the service they receive from their factory and are willing to jump to some other make of car, but the dealers who are handling cars made by reputable manufacturers will not give up their agencies and the factories are not increasing the number of dealers, so we hardly know what will become of the dealers who want to jump. I imagine that a lot of dealers are going out of business. I know that a lot of Blank dealers are going to and have, either because they could not get the cars, the cars were no good, made bad deals, and cut prices and did not know how to conduct their business. 7—Some dealers who have good lines and are not well financed will, undoubtedly, be forced out, and the dealers with poor lines who are well financed will ease into the place vacated by the former. This is natural. I do not believe that dealers will quit their present lines unless for the purpose of securing a better one. The successful automobile man is an optimist and lives in the belief that things will change for the better to-morrow. They look forward to improved relations with the factory on the theory that “further up the creek you go, the better the fishing.” 8—I do believe there will be a general shakeup of dealer representation when cars become more plentiful, but I do not think that this will take the form of changing agencies. Rather the dealer will go out of business, because I am satisfied that there are too many dealers and too many manufacturers in this business at this time. 9—The need of education in the automobile dealer industry along merchandising principles, as laid down by other successful lines of business, when automobile dealers have to sell their cars, will bring forth many changes and shakeups because the dealer does not know how much it costs him to do business. Dealers will quit more on this account than because they have not been treated fairly. In most cases, their organizations will have become so badly disrupted they will not know who or what to blame. Furthermore, there are many dealers and distributers organizations who are handling the product of certain manufacturers whose unfairness has caused them loss of money, prestige and so forth, who will switch from their present position to take on the line of automobiles from the manufacturer who has a clearer vision of the automobile industry which the dealer or distributer occupies. 10—There is going to be quite a change in dealer representations throughout the country, as I believe that the dealer who is well organized, which includes sufficient financial backing, will be in a position to obtain the pick of agencies. There are many dealers who have not received a square deal from their factories and I believe that if this financial stringency continues that many dealers will be forced to retire, and this will leave the better dealers to command something from the factories and they will be in a position that they have never been in before. 11—I think the time is not yet here when dealers will give up standard profitable lines, no matter how they might feel. If the factories impose conditions which dealers find it hard to meet and still handle their outputs, some readjustment will have to take place. One factory, for instance, imposes a $15 national advertising charge on every car which we must pass on to the customer. I think the manufacturers of less known cars will suffer seriously under present conditions of contracts in view of coming competition and fall-off in the market. 12—This is entirely problematical in my mind. It is to be presumed that there will be several changes both from the dealer viewpoint and the factory viewpoint. Both may be justified. We are looking forward to some changes in our own distributing organization of dealers. Dead-wood is appearing; that is, those who cannot sell, but were able to take orders. We must have sellers in a buyers’ market. 13—It is natural that every factory will look for the best dealer representation it can find. If it finds its present dealer complaining against the treatment received it will either mollify him or look elsewhere. The standard lines always will be well represented. I believe the average dealer continues to do business as long as possible with the factory he is familiar with, and I believe that statistics will show that most cancellations are made by the factories. You will note in reading these answers that six men are outspoken in the opinion that there will be a big shakeup among dealers, while only three are outspoken against it and at least a part of the three give the opinion as referring only to the organizations they represent. You will also note that five of these men speak out squarely that the dealers have not had a square deal. ------------------------------------------------- Yes, there are more questions. This article and those to follow delve more deeply into the question of dealer-manufacturer relations than anything heretofore put on paper. The frankness and honesty of the replies to the questions must be their own defense. No names will be given in this treatment of the question. But we will endeavor to make plain to the manufacturer just what his dealer thinks about a number of very important topics, such as: The bad taste left after the allotments in 1919. Introduction of new models. Careless factory inspection. Poor assembly. Price changes. Dealer contract. ------------------------------------------------- ACCORDING to A. {Mr Adams} P. Young, writing in Engineering (London), if a spark gap be connected to an alternator or transformer designed to produce about the same voltage as that generated by a magneto (say 10,000) at the usual frequency of 50 per second, owing to the comparatively slow rate of application of the voltage, the spark voltage will be much less than with a magneto, in which latter the secondary voltage builds up extremely rapidly. The ratio between the spark voltage with magneto current with an ordinary alternating current of 50 cycles per second is frequently known as impulse ratio. | ||