Henry Ford: A Great Innovator

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Model T - An Astounding Success The first Model T finally rolled out in October 1908. It was affectionately called 'Tin Lizzie,' slang for an obedient and reliable servant. The Model T was priced at $850 and was simple, light, flexible, powerful, and easy to drive. The car was targeted primarily at farmers and had higher than normal ground clearance. In the very first year, Ford set new industry records by manufacturing nearly 10,660 Model Ts. In the second year, 18,257 more Model Ts were produced. With a significant increase in the demand for Model Ts, Ford decided to set up a new factory. The facility at Highland Park was inaugurated in 1910. It had four-storeys, encompassing a radius of 62 acres. Production in the factory was structured to move from top to bottom. Body panels were rolled out in the fourth floor and sent to the third floor, where tires were fitted on to the wheels and the bodies of cars were painted. Assembling took place on the second floor and was then lowered on to the ground floor, where the car was finally made ready for use. 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%.

Table I
Falling Prices of Model T (1910-27)

Year(s)	Price($)
1908	850
1910-11	780
1911-12	690
1912-13	600
1913-14	550
1914-15	360
1924-27	290

Source: www.willamette.edu & www.abilene2000.com.

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

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

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