Historiography: Casualties of A Sales War

The USA emerged out of World War II victorious. Veterans came home with benefits that would help them start families, jobs, buy homes and automobiles. 

It is a familiar story. A story that gave birth to a generation that either had it made or struggled to get to be equal with everyone. We already knew how it ends. But, getting there wasn’t as bucolic as those who lived to tell about made it to be. 

There was a time when we became comfortable. Comfortable enough to let post-war designs to simply just be normalized. 

This is why American automobiles from 1951 to 1954 are not as memorable as one introduced in 1955 for the rest of the decade. 

Perhaps there is another reason beyond design and slow progression of technology. It was that Detroit’s three largest manufacturers were engaged in a sales war driven by prices and volume. 

Think of it as a game of knothole – the one where the hand that made it to the top of the bat wins. Except the temper of this sales war was more aggressive. We’re talking a perpetual chess match driven by the mantra of “can you top this.”

What was driving this sales war? The veterans were already settling into their postwar lives. The USA economy was strong. While smaller automakers already had postwar designs by 1947, General Motors, Ford, and Chrysler introduced their new postwar models for 1949. At the beginning of 1950, the Big Three had settled into rhythm that relied on customers trading in their automobiles every three years. Simple grille changes and some new equipment continue to entice customers to check out the new models every year.

Think about what is driving automotive sales in the early 1950s. G.I. Bills became home loans of new homes being built in suburbs across the country. With new suburban communities popping up, the necessity of automotive use turned into commutes to job centers – mainly in the center of a city. 

The increased use of the automobile also fostered the development of the Interstate Highway system. While some of these new highways help to bridge suburbs with jobs and careers, they also opened up travel to destinations near and far. 

Car culture became a part of American society. We were given the license to go to the movies and eat without getting out of our vehicles. We even started to modify some older rides.

The main focus is on new car sales. That became the measurement of success in the industry. How many will you sell this year? How will you fulfill the continued demand for new vehicles? How will you outsell your competitors?

The challenge for automakers came from the USA’s first postwar conflict on the Korean Peninsula. For the sake of keeping communism from spreading worldwide, this war caused some shortages of certain raw materials that would otherwise be utilized elsewhere. 

The dispersal of raw materials, including steel, for the Korean conflict caused the USA government to limit auto sales through the National Production Authority. In 1952, that meant annual production would yield only 4.3 million units. To make matters more interesting, GM was allotted 41 percent of that title for automobile production. 

If you think that’s not fair to give GM that large percentage of vehicle production, consider who else was affected by production limits. You had Ford and Chrysler in second and third for production allotment. They were followed by independent automakers, which include Kaiser, Studebaker, Packard, Nash-Kelvinator, Hudson, and Willys-Overland. 

Think about that figure of 4.3 million vehicles to be produced in 1952. Two years earlier, automobile production reached eight million. When you are told to reduce production by nearly half, there would be a concern about meeting the bottom line. Without abundant production, how can you still sell your allotment and still make a profit. 

What transpired was a bit of gamesmanship to sell every vehicle possible in 1952. They did so by discounts and incentives – sound familiar. Except, you had GM and Ford simply trying to outdo each other in terms of price. 

Here is where it gets interesting. Think about the cars sold in 1952. Chevrolet was on its final year of selling their 1949 cars with new grilles and trim. The same went for GM’s other brands. A new design for some of their brands were waiting in the wings for 1953. 

Chrysler Corporation also sold warmed over models that dated back to 1949. Even with the addition of the new FirePower HEMI V8 engines introduced the year before, the third of the Detroit Three ended up shoved aside during the sales war. 

All bets were on Ford. They introduced a new body design for 1952 on their 1949 chassis. Mercury and Lincoln also introduced new bodies on their respective chassis. Since GM were mostly carryover models, the train of thought was that Ford would gain a lot of sales back from GM within the constraints of production limits. 

Ford was onto something. To attract both loyal and conquest customers, you have to keep your product line fresh. That was what some of the independent automakers did. 

Hudson, Kaiser, Nash, and Willys introduced a new size class of automobile. They were smaller than the standard American car. The thought was to produce an automobile based on what the customer needed at prices below standard-sized models. 

Nash started this new size class with the 1950 Rambler. This was followed by the 1951 Henry J, and the 1952 Willys Aero. This was a way for the independents to try to match volume with the larger automakers. Yet, these smaller cars were seen as niche models that never got the sales figures equal to lower priced Chevrolets, Fords, and Plymouths. 

Hudson would introduce the 1953 Jet by the end of the year. Yet, they also ran into production limits imposed by the National Production Authority. Those limits would be lifted by mid-1953. 

The 1953 model year would yield a lot of new designs from these independent automakers. Studebaker rolled out a series of sleeker designs. The two-door models would endure throughout the decade as the Hawk – perhaps the first personal coupe in the mainstream price class. 

However, two of the Detroit major automakers came out with new designs. GM and Chrysler Corporation rolled out models that would take them into the middle of the decade. There were most evolutionary, but you started to notice that they wore flashier trim than before. It was in response to customer wants than needs. 

The thought was to add more chrome was equal to going upmarket. The truth is that the major automakers were still slashing prices and discounting to get more units sold and to “win” the marketplace. 

Because of these sales practices, change was imminent across the rest of the American automotive industry. The independents felt the fallout of the sales war between GM and Ford. By 1953, Kaiser bought Willys-Overland and would consolidate their lineups in a couple of years. Only the Jeep brand would survive under Kaiser’s management. 

Nash-Kelvinator and Hudson began talks to consolidate with plans on a merger by 1954. A parallel action was taking place over at Studebaker and Packard. At one time there was a talk of a larger merger between these four automakers. That was rejected by Nash-Kelvinator’s George Romney. Therefore, Nash-Kelvinator merged into Hudson to become the American Motors Corporation, and Studebaker folded Packard into their new corporate structure. 

Only Chrysler was resilient to industry consolidation by 1954. They tried to compete against GM and Ford with products that are relevant to customers. Yet, they managed to keep their third-place position on the sales chart. Chrysler Corporation was also planning a new design and engineering revolution that would debut for the 1955 model year. 

The ultimate result of the sales war in the automotive industry goes beyond consolidation of manufacturers. It is trusting the economy to continue to be strong in the post-WWII era. Although there were limits on manufacturing due to prioritizing raw materials for the cause of stopping communism in its tracks, you also had a labor stoppage in the steel industry during 1952 that added more stress to both the armed conflict efforts and general manufacturing. 

Consequently, signs of a recession were looming. That would eventually rear its head in 1958. Between 1954 and 1958, more signs of retraction would take place in the automotive industry that would take years to occur. By 1961, five USA automotive brands would disappear from the marketplace. 

The perfect storm of a good economy, an armed conflict on the other side of the Pacific Ocean, limits on vehicle production, quotas imposed to favor larger automakers, and the willingness to play the “divide and conquer” created some realities in the automotive industry during the sales war of the early 1950s. Realities that have resulted in industry consolidation and fewer consumer choices. 

All photos by Randy Stern