Of all U.S. automakers, the only one that has failed to benefit from the nation's current car-buying spree is the one that needs it most: South Bend's Studebaker Corp. With its sales for November running 13% below a year ago, harried Studebaker has seen its share of the U.S. auto market drop to a precarious 1.1%. Studebaker does not need to move a lot of autos to make a profit; in 1959, the year the Lark was introduced, the company earned $28.5 million on sales of 137,000 cars. But Studebaker is currently selling cars at an annual rate of only 86,000, and for the first nine months of 1962 alone, reported losses of $5,300,000.
Bothered by Bottlenecks. Some of Studebaker's troubles stem from the fact that the basic design of its Lark has not changed in four years while consumer tastes in cars have. But even more crippling has been a series of production snafus.
At the beginning of the 1963 model year, just as Studebaker was giving its cars a big advertising kickoff, a strike in a supplier's plant left the new Larks stranded on the production line without doors; by the time cars began to trickle through to dealers, many a would-be Lark buyer had switched to something else. Much the same fate befell the Wagonaire station wagon, which has a rear roof that slides open. Scarcely had the Wagonaire been introduced and consumer demand for it proven brisk when Studebaker discovered that the sliding roof leaked. Not until mid-November was the problem overcome well enough to allow volume production.
Biggest headache of all has been the Avanti, the hot, handsome sports car that is the pet project of Studebaker's dynamic President Sherwood Egbert, 42. Though initial orders suggest that Studebaker could well sell 15,000 1963 Avantis, production has been held to fewer than 500 a month by the difficulties of getting the various parts of the car's fiber-glass body to fit snugly together. Egbert hopes soon to open an Avanti body assembly line in South Bend so as not to have to rely solely on an outside supplier to both make and assemble the body. Meantime, Studebaker dealers are swamped with Avanti orders they cannot fill.
Supported by Diversity. Two years ago, all this would have been immediately disastrous for Studebaker. But in the past 18 months, Egbert has acquired for Studebaker five profitable new subsidiaries, ranging from a home-appliance maker to a nonscheduled airline. With 47% of its sales now outside the auto business, Egbert is counting on the new divisions to keep the company solvent until he can turn the automaking division around.