CAR PRICES MAY RISE
A shock for Britain’s motoring millions is delivered by ” Mr Motoring ” himself ,” Sir Leonard Lord, chief of the Austin -Morris combine . Today he tells his shareholders that prices of new cars may have to be increased – for the first time in three and a half years. Sir Leonard, who sells over a third of all the cars in Britain , issues his warning in the yearly report on the British Motor Corporation.
He says the price increase may be forced on him by the “present situation” of falling output in the car industry. Ever since Austin-Morris last increased car prices in May 1957 costs of both labour and materials have been rising. Until now these extra overheads, says Sir Leonard, have been absorbed by continuously increasing output. But, he says, “if output is to be reduced this formula will no longer work.We shall still endeavour to hold our costs in balance, but we may be forced to make advances in some retail prices,” Yet Sir Leonard is an optimist. His view is that short-time working by B.M.C. will not ” be of long duration.”
Against last year’s record turn-out of 669,123 cars and lorries, which boosted B.M.C.’s turnover to a high and handsome £346 million, Sir Leonard says his target is still ” to produce a million vehicles a year.” He tells his shareholders that in view of the present setback the plans “may sound extremely ambitious. But we have tried this formula before and have been rewarded with success.”
At the time of the last recession in the motor trade in 1956 – Sir Leonard told shareholders: “Never have we been wrong in pursuing a policy of expansion”.
He reminds them of this in today’s report. “That statement is just as valid today as it was then.”