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Devaluation Surprises Industry

23rd September 1949
Page 33
Page 33, 23rd September 1949 — Devaluation Surprises Industry
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Which of the following most accurately describes the problem?

REACT1ONS of leading commercial

' Xvehicle manufacturers to the devaluation of the pound and its possible effects on exports to dollar areas were generally cautious. The feeling was that until it was seen how other countries responded it was too premature to forecast whether sales in hard-currency areas would rise or remain at present levels.

At least one manufacturer had forecast devaluation some months ago, but it appeared that most companies were unprepared for the change. Boards of most concerns met to discuss the new situation.

It seems likely that prices will not be reduced in the same ratio as the fall of the pound as various factors have to he considered.

The Society of Motor Manufacturers and Traders informed "The Commercial Motor" that prices of British goods in the dollar area would probably be reduced by 25-30 per cent. The Society's representative in America. Sir William Welsh, has been recalled to London for talks on sales promotion. The question of selling commercial vehicles in the U.S.A.has not been fully investigated, as sales are not large.

Whatever reduaion may be made in prices, it is generally conceded that it would give sales a fillip. In cOuetries in the hard-currency areas. prices of British products will compare more favourably with these of U.S. goods, but British exports to these countries will have to be increased considerably so that Britain can pay the prices of their materials.

An example is afforded by Argentina, where British vehicles have been selling well for the past few years. Whereas our prices will fall, in all probability the price of Argentine meat will rise.

Exports of commercial vehicles have increased tenfold in three years. The key to higher production is the output of steel. It is stated that the steel industry is not yet working to maximum capacity and until more steel is available to industry, production cannot be stepped up.

Tags

People: William Welsh
Locations: London

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