USED-CAR MARKETS OF FOREIGN COUNTRIES NORTH AMERICA In only a few countries on the North American continent has the problem of marketing used cars become of major importance. In general, cars are operated longer by the original buyer in other countries of the continent than they are in the United States. In many countries dealers have not found it necessary to accept an old car as part payment on a new one, and in most markets the relatively small number now in operation has been the greatest factor in preventing used cars from becoming a problem of serious proportions. In Canada the problem is similar to that in the United States, while in Mexico too high valuation of used cars and too long credit terms on new cars have congested the market with unsalable secondhand cars. In Cuba stocks of used cars have been kept at a minimum. There is practically no used-car problem in Colombia, but Chile finds the used car an obstacle to the sale of new cars. CANADA Trade Commissioner Lynn W. Meekins, Ottawa Canadian dealers are making considerable headway in controlling the used-car market. The Toronto Automobile Trader Association has inaugurated a plan for publishing in all the local newspapers a "used-car market report," listing 26 makes and covering models from 1922 to 1926. This will be continued at regular intervals for a period of six months. The purpose is to provide data which dealers can show to customers wishing to trade in used cars and which will help to convince prospective buyers of new cars of the market value of the cars to be traded in. The so-called Windsor," or fixed-price, plan of handling used cars has helped to stabilize the market in Toronto, Montreal, and Ottawa and is now being adopted in Calgary. The fixed-price plan has not solved the problem, but progress is being made. In general, it is believed that the number of used cars on the market has increased during the past year and will tend in some cases to limit sales of new cars. In Ottawa retailers are also advertising approved used-car price lists in the newspapers to enable the public to estimate what allowances may be expected on cars to be traded in. This appears to bring fairly good results. The practice of the more progressive retail dealers in establishing separate departments for the reconditioning and sale of used cars is working satisfactorily. The steady increase in new-car sales has resulted in an increase in "trade-ins," so that the number of used cars on hand is steadily increasing. Many dealers have been compelled to take losses on used cars, since tariff reductions automatically lowered the value of all types of cars. MEXICO From reports by Assistant Trade Commissioners L. H. Brin and Warren Ullrich. Mexico City Because of the general business depression, lack of money, and high prices, used-car sales in Mexico are practically nil. Dealers report that they are able to dispose of only about 6 per cent of their stocks of secondhand low-priced cars. One dealer, with approximately 80 used cars of this type in his warehouse, reports a sale of about 5 cars monthly. With the higher-priced cars the situation is somewhat better. PORTO RICO Trade Commissioner H. P. McGowan, San Juan The supply of used cars in Porto Rico is apparently growing faster than the demand. The gradual extension of bus service to various parts of the island has greatly affected the business of public passenger-car drivers, who have always been the chief buyers of used cars. Presumably this is affecting the used-car market to a large extent. Concentrated effort in advertising and in sales work on the numerous late models of new cars has also had its effect upon the used-car market. CUBA Trade Commissioner O. R. Strachbein, Habana Despite the fact that fewer sales of new cars were made in Habana during the third quarter of 1926 than in several years past, the sales of used cars have held up very well. During the third quarter of 1926 the sales of the three leading dealers in Habana aggregated 246 used cars, as compared with 220 and 173 during the first and second quarters, respectively. Compared with these figures there was a noticeable decline in the trade of used cars during the fourth quarter, and the situation in general seems to be somewhat better than it was earlier in the year. During the first quarter of 1927 sales of the three leading dealers. aggregated 162 used cars. BAHAMA ISLANDS Vice Consul William A. Smale, Nassau There have not Leen more than 10 used cars for sale during the past year in Nassau. It is probable that this number will increase during the next few years. SOUTH AMERICA ARGENTINA Assistant Commercial Attaché H. Bentley MacKenzie, Buenos Aires The used-car problem is assuming much greater importance in Argentina than heretofore. Dealers have a large number of used cars on hand and are with difficulty finding a sale for them. Though a certain number can be sold in the rural districts, the lack of roads greatly limits the size of the market. The largest single outlet for used cars has been the Buenos Aires taxicab service, but it has enough cars for the present. BRAZIL From reports by Acting Commercial Attaché A. Ogden Pierrot, Rio de Janeiro, and Assistant Trade Commissioner Richard C. Long, Sao Paulo Liberal credit terms on the purchase of new cars has lessened the incentive of buyers to purchase used cars in Rio de Janeiro. While the used-car problem has only begun to make itself felt, it has already developed to a sufficient degree to affect sales of new cars. Dealers who are unable to invest money in used cars can not make as attractive offers to buyers of new cars as the dealers who carry a stock of used cars. Until quite recently it was not necessary for dealers to accept used cars in trade, and for that reason no market for them existed. Dealers are now posting lists of used cars and are beginning to make a real attempt to sell them. In the Sao Paulo district the used-car problem is causing considerable anxiety to dealers and banks. Prospective buyers of new cars require that their old machines be taken as part payment, though this condition is not so evident for the low-priced cars as for the high-priced cars. CHILE Commercial Attaché Ralph H. Ackerman, Santiago The large number of used cars on the Chilean market continues to be an obstacle to the sale of new cars. The rural districts furnish the best market for used cars, as the lack of roads and low purchasing power of the population greatly limits the sale of new cars. COLOMBIA Commercial Attaché William Boaz, Bogota There appears to be no used-car problem in Colombia. The tropical climate and bad roads, together with reckless driving on the part of the native drivers, do much to shorten the serviceability of automobiles in this country, and as a result the used car has no resale value. PARAGUAY Vice Consul Harvey S. Gerry, Asuncion The used car has only made itself felt in an indirect manner in the Paraguayan market. Agents are beginning to complain that the long-term credits granted in new-car sales by their competitors have put too many new cars on the market, with the likelihood, in case of failure to continue payments, of a number of used cars making their appearance, thereby weakening the sales possibilities for new cars. PERU Assistant Trade Commissioner J. D. Smith, Lima The decline in sales of new cars in Peru, resulting from decreased purchasing power, was accompanied by a relative increase in the sale of used cars. Persons who ordinarily would be regarded as prospective purchasers of new cars have been forced by hard times to buy secondhand automobiles. The dealers' attitude toward acceptance of used cars varies. Some will not accept any used cars to apply on the purchase of a new one; others will accept only certain makes; and still others accept all makes of used cars. EUROPE The used-car problem in Europe is becoming more and more comparable with that in the United States. Though conditions here are not as acute as in the United States, nevertheless many such European markets are receiving considerable attention. The large allowances given on "trade-ins" by dealers in many foreign markets greatly lessens the margin of profit on the sale of new cars. This, together with the fact that the average European owner operates his car for a greater length of time than the average car owner in the United States, has contributed greatly to the difficulties met in the European used-car markets. In Belgium a decided preference for closed cars has released so many used open cars on the market as to make disposition of the latter at a fair price very difficult. The problem in France and the Netherlands is much the same as that in the United States, while in Czechoslovakia, Poland, and Rumania the economic situation has materially aided in supplying a demand for used cars. ALBANIA American Minister Charles C. Hart, Tirana The sale of used cars does not have an important bearing on the new-car market in Albania. Most automotive vehicles are used by their owners as a means of livelihood, and as long as a car can be operated at what appears to be a profit its owner has no desire to sell. When it has depreciated until it can no longer be used by its original owner there is no market for it. AUSTRIA Assistant Trade Commissioner John A. Embry, Vienna Used cars have until recently found a ready market in Austria, but this condition is now slowly changing. There is no longer a market for high-priced used cars, and dealers are finding it increasingly difficult to sell new cars of this type, as the buyer finds that after a year or two of use he is not able to dispose of his car at a reasonable price. This is a result of the high ad valorem customs duties, placed on the high-priced used car, which make its selling price so dear that the purchaser prefers to buy a new medium-priced car. The values of used cars have dropped considerably during the last few months. This is especially true of the low-priced French car, which has a high ratio of depreciation and on which it is difficult to obtain more than 40 per cent of the original price after the car has been run for a period of one year, or approximately 10,000 miles. The increasing number of used cars offered for sale through the newspapers indicates that the used car is rapidly becoming important in the Austrian automotive market. BALTIC STATES (LATVIA, ESTONIA, AND LITHUANIA) Commercial Attaché C. J. Mayers, Riga Owing to the limited number of motor vehicles in circulation that are ready for trading in or scrapping, it is believed that the usedcar problem in the Baltic States has not developed to such an extent as to make it a very important factor in the sale of new cars. Dealers repair cars turned in and resell them at a comparatively large profit. BELGIUM From reports by Assistant Trade Commissioner Leigh W. Hunt and Commercial Attaché M. M. Mitchell, Brussels The used-car problem in Belgium, owing to currency fluctuations and to the consequent rapid changes in prices of new cars, is particularly unsettled. A sudden preference for closed cars caused the used-car market to be flooded with open models, for which a market is now practically nonexistent. At the present time it is impossible to get a fair price for a used car, even in its best condition. Priced up to 16,000 or 18,000 francs ($700 to $750), used cars will sell; but it is almost impossible to sell any above this figure, regardless of age, mechanical condition, or original price. Under such conditions, many who would get rid of their heavy, expensive car in order to buy a smaller and more economical type, after finding that they must sacrifice their present car, decide to keep it instead of buying a new one. Dealers are heavily stock with used cars and find it impossible to get a fair price for them. However, the trading in of old models for new ones has not yet reached a point where the used car seriously interferes with the sale of new cars. CZECHOSLOVAKIA Commercial Attaché James F. Hodgson, Prague The used-car market in Czechoslovakia has been very active. Dealers report that it is not difficult to sell all cars taken in trade, especially if of domestic manufacture, since these types are readily salable as taxicabs. This, of course, removes from the ordinary usedcar stocks a considerable portion of "trade-ins" and greatly facilitates sales of used cars of foreign manufacture, which according to regulations are not allowed to be used as public conveyances. There is not yet a used-car problem in this market. With a total of only 20,000 vehicles in a country which could normally maintain. |