The History of American Technology
The Automobile Industry, 1920 - 1929
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Four-wheel hydraulic brakes introduced.
Annual U.S. production of automobiles stood at nearly 2.3 million. France, the world's second largest producer of automobiles, produced 40,000 units. The world total production stood at just under 2.4 million.
As William Durant was forced out at GM, Ford held just over 61% of the U.S. market for automobiles. GM's market share stood at just 12%. Durant, for his part, immediately raised $ 7 million to form Durant Motors Inc. by buying assets from the bankrupt Locomobile Corp. in Bridgeport, Connecticut. Durant still had his entrepreneurial magic, and he soon raised an additional $ 5.25 million to purchase the most modern manufacturing plant in America from the receivers for the now bankrupt Willys-Overland.
In this first full year under Alfred P. Sloan's operational control, General Motors sold 457,000 units and reported a profit of $61 million.
At the insistence of Edsel Ford, the Ford Motor Company acquired the new Lincoln Motor Co. from Henry Leland, who had established the mark in 1921.
GM management entrusted the Chevrolet line to a former Ford employee: William Knudsen. With assembly-line production and Du Pont's colorful paints, Knudsen set out to make the struggling Chevrolet competitive with the Ford Model T.
Durant Motors introduced its 'Star' at $348 to compete with the Ford Model T. Henry Ford simply undercut Durant's price and drove him from the market.
Introduction of balloon tires for automobiles.
In Chicago, Yellow Cab President John D. Hertz bought a small rental car company founded in 1918 and created the Hertz Drive-Ur-Self System.
For the first time in the U.S. auto industry, sales of closed cars surpassed sales of touring cars (open cars].
Well over half of the cars purchased in the U.S. were bought on credit.
U.S. auto production passed 3.7 million units.
The Ford Model T accounted for just under 52% of cars produced in the U.S.
There were 13 million cars on American roads. There were 108 firms manufacturing automobiles, but just 10 firms accounted for 90% of annual production.
GM sold 800,000 vehicles and earned a profit of $80 million.
For the second year in a row, Ford production of Model T's approached the 2 million mark. The price dropped to $290. Over half the cars in the world were Ford Model T's.
In Waltham, Mass., inventor Francis Davis developed the first effective power steering system, which he installed in a 1921 Pierce-Arrow. The first really successful applications appeared on World War II military vehicles. The innovation didn't show up on production models of automobiles until 1951.
Fuel consumption for automobiles in the U.S. averaged 473 gallons of gasoline per year.
The price of a Ford Model T Roadster dropped to $260. Ford had 10,000 U.S. dealers selling the Model T.
Reorganization or the Maxwell Motor created the Chrysler Corporation.
Armory Haskell organized the Triplex Safety Glass Co based on a 1910 patent Haskell had bought from the inventor. Safety glass cost $8,80 a square foot--$200 to replace all the glass in your Cadillac. Henry Ford took interest in the product and invested to finance expansion.
In the U.S., 43 companies were manufacturing automobiles. No new U.S. manufacturers succeeded in entering the industry after this date.
GM introduced the Pontiac mark, which was actually just a renamed Oakland.
U.S. production of automobiles reached 4 million.
Facing increasingly stiff competition from Chevrolet, a new Ford Model T with a self-starter sold for just $350.
Unheard of just a decade earlier, credit sales of automobiles had become the industry standard. Installment purchases accounted for more than 2/3 of all new car sales. With the automobile leading the way, credit purchases of expensive consumer goods (e.g., home appliances) was becoming a way of life for Americans.
Between 1927 and 1930, Chevrolet purchased and destroyed 650,000 used cars in an effort to prop up the market for new vehicles.
Last year of production for the Ford Model T. Sales dropped to 1/3 the 1926 level. Even at prices around $200 Ford couldn't maintain sales, and by this point consumers were buying 3- and 4-year old used cars rather than a T because they perceived the used cars as better value--with more features. By the time Ford shut down production of the Model T, the company had sold well over 15 million T's. In fact, the actual number produced was 15,458,781.
There were more than 20 million cars on the road in the U.S.
Closing down production of the Model T meant 100,000 workers lost their jobs. Ford closed when sales flagged, then began the design and tooling changover that produced the new Model A.
As the Model T was withdrawn from production, automobiles sales had made the industry the leading American industrial sector in value of product. Automobiles ranked 3rd on the list for value of product exported. There was one registered automobile for every 4.5 Americans, and 55% of American families owned a car.
A bad year for car manufacturers, the number of U.S. firms in the business dropped from 108 to 44 during the year. Effectively, the phenomenal market growth of the past 20 years had ended. The market had shifted to replacement of used vehicles. The trade-in and used car market had come to play an increasingly important role in automobile sales.
The American market of first-time buyers of new automobiles had reached saturation. For the first time, sales of replacement vehicles surpassed the combined total of sales to first-time purchasers and purchasers of multiple vehicles (fleets). Second-hand automobiles in excellent condition sold for about the same price as a Model T, and the much more stylish Chevrolet (the bottom of the GM line) cost just $200 more than a Model T. For the first time, the annual sales of Chevrolet surpassed those of the Ford competitor.
Chrysler advertised its 112-horsepower Chrysler Imperial "80" as America's "most powerful automobile." In response, Stutz began advertising a 113-h.p. model.
Chrysler Motors introduced the Plymouth to compete with Chevrolet and Ford in the low-end of the U.S. automobile market. The new Plymouths featured a high-compression engine and 4-wheel hydraulic brakes.
The American automakers sold 4.5 million units in the domestic market.
GM sold 1.9 million cars and trucks and netted a $248 million profit after taxes. The coming of the Great Depression ate dramatically into GM sales, which in 1932 dipped to less than 1/3 of this 1929 record. Nevertheless, GM weathered the Depression, making a profit and returning dividends to stockholders in every year through 1939 when the sales once again reached the 1929 level.
The capital requirements for automobile manufacturing based in mass production had severely weeded the industry. Three companies--General Motors, Ford, and Chrysler--accounted for at least 80% of all new car sales. In this last great year of the automobile boom, American manufacturers produced 5.3 million units, a number not surpassed until 1949.
The U.S. had 26.7 million registered vehicles, and motorists traveled an estimated 198 billion miles during the year.
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