April 17, 2014

Horse 1656 - Create A New Model T? Viva La Fiesta!

http://www.forbes.com/sites/michelinemaynard/2014/04/15/why-its-time-for-the-auto-industry-to-create-a-new-model-t/
Young people are losing interest in driver’s licenses. Cars have climbed to near-record prices. Increasingly, Americans are looking at alternatives to cars, like public transportation, bike sharing and rides from Uber.
With the auto industry gathered in New York this week for the New York International Auto Show, many people are puzzled over ways to win consumers back. One idea: create a new Model T.
There’s an opportunity for some smart company to build the next car for the masses. There is certainly a precedent for doing so. The original Model T put the car within the reach of the American middle class for the first time, and as cheaper used versions became available, the demographic got pushed down even further to the working class.
- Micheline Maynard, Forbes Magazine, 15th Mar 2014.

Sometimes I read articles in magazines and newspapers where I really question what sort of world the people who wrote them live in. After reading this article, I suspect that it's a world where eithet the internet doesn't exist, where high school arithmetic was too hard and where people simple do not do the research.

https://media.ford.com/content/fordmedia/fna/us/en/news/2013/08/05/model-t-facts.html
The Model T later sold for as little as $260, because Ford passed along the savings from his production innovations.
- media.ford.com, 5th Aug 2013.

At least that's what Ford's propaganda tells you. Henry Ford was a very canny businessman and whilst it is true that he did in fact pay his workers $5 a day when the usual going rate was only $2.25, the only reason that he did it was because he could reduce worker attrition and turnover by doing so.
In paying more than double the average daily rate, Henry demanded that his employees avoided drinking and gambling and even sent round inspectors to people's houses to check in on them. In addition, he was profoundly anti-Semitic and was eventually even awarded the Grand Service Cross of the Supreme Order of the German Eagle by Adolf Hitler, a few weeks after the Anschluss. In short, Henry was more than likely not a nice man. He would have only "passed along the savings" if it meant shifting more products and generating higher profits.
That aside, the Model T was able to sell so cheaply in 1927 because by that stage, the entire production facility had already been amortised and the car itself was essentially unchanged since 1908.


Consider the specifications of the Model T, as it rolled off the production line in 1927.
- 2.9L in-line 4 cylinder engine.
- 2 speed manual gearbox.
- Power 20bhp.
- Two wheel Drum Brakes.
- Top Speed 72km/h
- Fuel Economy 11.2L/100km

The asking price of US $260 at an inflation of 5% works out to be US $18,131 today.

Also consider the specifications of the Fiesta, as it rolled off the production line in 2014.
- 1.5L in-line 4 cylinder engine.
- 6 speed manual gearbox.
- Power 110bhp. 
- Four Wheel ABS Disc Brakes
- Traction Control
- Stability Control
- Top Speed 197km/h
- Fuel Economy 5.3L/100km

The 2014 Ford Fiesta has a top speed more than two and a half times as fast, produces more than five times the power and does it whilst using less than half the same amount of petrol AND does it at a list price in the United States of $14,100. Now I love to be pedantic, so bear with me, that's almost a 23% discount for a better piece of machinery; in real terms, cars are cheaper.

There’s an opportunity for some smart company to build the next car for the masses. There is certainly a precedent for doing so. The original Model T put the car within the reach of the American middle class for the first time, and as cheaper used versions became available, the demographic got pushed down even further to the working class.

What? Has the author ever stepped outside her front door? Is she suggesting that motoring isn't for the masses in the United States? The last reliable statistic for the number of cars registered that I can find is in 2009 and there were 254,212,610 of them.
I've been stuck in a traffic jam on the I-5 in Los Angeles for 5 hours; moving at less than 10mph. Whilst anecdotal evidence is hardly empirical, I'd tend to think that that's only because the car is within the reach of the American middle class.

Yes, the Ford Model T can lay claim to being the second bestselling single design of car in history but it did so over 19 years. To sell a car in today's market which is 19 years old would be the equivalent of committing market suicide.

One idea: create a new Model T.

Why?
Considering that both the Fiesta and the Focus list for less money than the Model T ever did, don't they already fulfil that function and many times better? Maybe someone just has a book to peddle.

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