Henry Ford - A Great Innovator

Model T – An Astounding Success Contd...

In the first three years, production of cars went up from 19,000 in 1910 to 34,500 in 1911 and to 78,440 in 1912. Ford believed in building a lot of cars and making them affordable. He sacrificed profit margins to boost sales. Profit per car dropped from $220 in 1909 to $99 in 1914 while sales catapulted to 248,000 cars per year in 1913. The increased sales due to slashed prices pushed Ford's profits up from $3 million in 1909 to $25 million in 1914. The price of Model T, fixed at $850 in 1908, was gradually reduced over the years (Refer Table I). From a market share of just 9.4% in 1908, Model T grabbed a market share of 48% in the US by 1914.

By 1921, Model T had a global market share of 56.6%. Of all Ford's cars, the Model T became the greatest and most widely recognized car in the global automobile industry. It was considered one of the greatest inventions in the automobile industry. Describing Ford's contribution in producing the Model T, writer Tedlow said, "More than any other individual, it was he who put America on wheels.

By making it possible for so many people in the world to move, he moved the world. He was the Copernicus of cars."²³ Describing the impact of the Model T in the US, John Steinbeck, Nobel Prize winner for literature (1962), wrote in his book Cannery Row, "One should write an essay brimming with erudition.

An essay on the moral, physical and aesthetic impact of the Model T Ford on the American people. Two generations of Americans knew more things about the Ford batteries, than about the human embryo. More things about the planetary system of the gears than about the sun system of planets. Most children of the period were conceived in a Model T and quite a number of them were born in a Model T."

More than 16 million Model Ts were sold during 1908-1927. In 1925, the Ford Co. was rolling out two million Model Ts per annum. Analysts attributed the secret of production in such high volumes to Ford's mass-production and assembly line manufacturing methods.

Thomas A. Stewart, Associate Editor, Fortune, said, "As Ford adapted the emerging principles of mass production to the automobile and hired tens of thousands of workers to put those principles into practice, he gave rise to an entirely new phenomenon: the blue-collar middle class."²⁴

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23] From the book Giants of Enterprise, by Richard S. Tedlow, HarperBusiness, 2001, page 141.

24] As quoted in the article, "Henry Ford Claims Business Honor," The Associated Press, November 2, 1999.

Case Details

Case Code : LDEN025
Themes: Corporate Social Responsibility, Entrepreneurship
Case Length : 13 Pages
Period : 1903
Organization : Ford Motor Corporation
Pub Date : 2003
Teaching Note : Not Available
Countries : USA
Industry : Automobile

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