Ford Edsel
From Invertopedia, the encyclopedia of how things fail
Edsel was a Ford Motor Company car brand, planned for nearly a decade and introduced in 1957 at a development cost of $250 million[1]. It went on sale on September 4, 1957[2][3], weeks before a recession, as buyers moved toward economy cars[2]. Ford ended it on November 19, 1959, after about 110,000 had been built[1][3], and the loss has been put at about $350 million[3][4].
Contents
The bet
Ford executive vice president Ernest Breech convinced top management, on the strength of early-1950s market research and a booming economy, that a new upscale mid-size line would sell[2]. The Edsel would slot between Ford and Mercury as its own brand, with its own division and 1,187 dealers of its own[2].
Ford set a first-year sales goal of 200,000 cars[3]. It kept the cars under wraps until launch day to build the surprise[2].
What happened
| Early 1950s | Ernest Breech argues, from market research and a strong economy, that upscale mid-size cars will succeed.[2] |
|---|---|
| Before launch | Henry Ford II is uneasy about risking his father Edsel's name on the car, but the name is approved while he is away.[2][5] |
| Sep 4, 1957 | "E-Day": Americans get their first look at the Edsel line. A promotional TV show follows about five weeks later.[2][4] |
| Late 1957 | A recession begins a few weeks after the launch, alongside a steel shortage.[1][2] |
| Early 1958 | More than 32,500 are sold in the first five months, the most of any vehicle brand to that point, according to a Ford advertisement.[1] |
| Jan 14, 1958 | Ford folds the separate Edsel Division into its Lincoln-Mercury Division.[3] |
| 1958 model year | Demand runs at less than a third of what Ford's executives expected.[2] |
| 1959 model year | Sales fall another 29 percent.[2] |
| Nov 19, 1959 | Weeks after the 1960 model comes out, Ford ends the Edsel, calling 1960 retail sales "particularly disappointing."[1][3] |
The kill shot
Ford built the Edsel for the market its research described years earlier. By launch day that market was gone: a recession had started and buyers wanted cheap, small cars.
The plan came from early-1950s research and a thriving economy[2]. By the time the car arrived, the US was weeks from a recession, and buyers were shifting to economy cars such as the Volkswagen Beetle; other upscale brands, including DeSoto, Hudson, Nash, Packard and Studebaker, would also go under[2]. Ford said the Edsel launched at the start of a recession and during a steel shortage[1].
The research behind it was not tested against real buyers. Hagerty notes Ford did virtually no test marketing with consumers[2], and Plastics Engineering describes a "slavish adherence" to opinion polls and motivational research[3]. The car also had a narrow place to live: the gap between the most expensive Ford and the cheapest Mercury was only $136[2].
Red flags ignored
- Research from a different economy. The case for the car rested on early-1950s research and a booming economy.[2]
- No test with real buyers. Ford did virtually no test marketing with consumers before launch.[2]
- Squeezed between its own siblings. Only $136 separated the top Ford from the cheapest Mercury, so the Edsel competed mostly with Ford's own cars.[2]
- A surprise instead of a test. Cars were shipped to dealers under wraps to heighten the reveal, so the first real verdict came on launch day.[2]
- Quality problems early. Owners reported faulty welds, leaky trunks and power steering failures, and dealers received unfinished cars with parts in the trunk.[2]
The cost
$250 million in development[1][2], with the total loss reported at about $350 million[3][4]. Ford built about 110,000 Edsels[1]; Hagerty puts it at about 116,000 built and sold across the 1958 to 1960 model years[2], and Plastics Engineering counts 109,466 US sales from 1957 to 1959 against a first-year goal of 200,000[3].
After the end was announced, used values fell so fast that owners were given rebate vouchers worth $300 to $400[2].
The inversion
Research tells you what people said last year. Before you commit, test the product with real buyers in the market you are launching into, and make sure it has a place that your own products don't already fill.
What survived
The factories. Ford put the manufacturing capacity freed up by the Edsel toward the Falcon and, later, the Mustang, which has sold more than 10 million cars[1]. Several Edsel model names, Citation, Ranger, Pacer and Villager, were later reused, and rare Edsels now draw collectors[2].
References
- ^ “TBT: How the Unsuccessful Edsel Led Ford to Create the Mustang”. Ford Motor Company (Paul Kampe), November 21, 2024. Nearly a decade of planning, $250 million development cost, recession and steel shortage at launch, 32,500 sold in five months, about 110,000 built, the November 19, 1959 announcement and quote, capacity moved to the Falcon and Mustang.
- ^ “10 reasons why Ford's Edsel floundered”. Hagerty Media (Don Sherman), August 30, 2017. September 4, 1957 reveal, recession weeks later, shift to economy cars, virtually no test marketing, $250 million, the $136 Ford-Mercury gap, 1,187 dealers, Breech and Henry Ford II, quality problems, demand under a third of plan, 29 percent drop, about 116,000 built, rebate vouchers, reused names.
- ^ “Can I Get a Witness: Edsel's Flop and Its Lessons”. Plastics Engineering, June 27, 2022. September 4, 1957 on-sale date, 200,000 first-year goal, 109,466 US sales, $350 million net loss, "slavish adherence" to polls, January 14, 1958 division merger, November 19, 1959 end.
- ^ “Daily Quiz for November 4, 2014”. HistoryNet, November 4, 2014. E-Day on September 4, 1957 and a loss of about $350 million.
- ^ “Edsel”. Wikipedia. The brand named for Edsel Ford, Henry Ford II's father (cross-check).