The answer to financing continued car manufacturing came with the concept of independent auto dealers. Dealers were the framework for economic support so car companies had money to continue assembling cars. Selling cars was not difficult in the early years. In fact if you could afford it you wanted a car, it was that simple. Through 1920 demand was higher than supply and people were willing to give large deposits for the opportunity to buy a car. Car companies loved dealers as they were continually sending in orders with cash deposits. This kept the industry flush and moving forward. Manufacturers loved dealers, and left them alone, not requiring any detailed reports or sales forecasts. The dealer was the answer to getting money to build more cars and keeping the manufacturer cash infused.
The Maurice W. Fox authorized Ford Dealership in 1917 offered sales and service to Ford owners. It had an inventory of $5000 worth of cars and featured a gas pump at it’s’ “pull up” front entrance. That year Ford demanded dealerships had to carry an inventory of $20,000.
For dealers it was a good deal too, as it didn’t cost anything to get your franchise. It was given to a person who was considered a good representative of the company. Friends, relatives and seasoned business people were the main contenders. Contracts were simple, being two pages at the most, with little “legalese”. Rules for early dealers were simple – agree to sell cars and a territory would-be assigned. But, it was not an exclusive territory. This didn’t seem to bother the dealers as the demand for cars was so high. The dealer needed to have a supply of parts on hand for repairs, a showroom and a repair area. In 1917 a new Ford dealer had to maintain a $20,000 inventory in parts at all times receiving a 1/3 discount on all parts purchased from Ford. Plus, the dealer had to offer repairs to its customers and any other Ford owner. For car stock one new model had to be in the showroom.
The creation of the Factory Store in the early 1920’s was a direct competitor to dealerships. It was run by the manufacturer with all employees paid directly. That’s right, car manufacturers began their own independent network of selling cars. As you can imagine this was a sore point for dealership owners who had invested life saving to sell cars as a factory store had unlimited funding. Eventually, this hot topic had to be resolved by the factory stores disappearance. Car manufacturers saw the success of the dealership system and tried to recreate it from their point of view.
1937 Pontiac Dealership’s created large showcase front windows and prominent signage in prime locations. Significant service areas and parts selling was part of the setup
In 1913, under the direction of James Couzens, Ford Motor Company had 7,000 dealers selling the Model T. Ford’s large size gave them the ability to manufacturer cars efficiently and with less expense, and they could afford a larger sales staff enabling them to reach more customers. Now smaller companies were feeling the pinch and closing their doors. The efficient use of dealers, consistent car sales and new production churned the business machine.
Answorth Ford Dealership in 1939 featured an Art Deco dramatic front with shiny black granite and curved showcase windows. The “Servicenter” was located predominately at the front of the building.
World War II necessitated the conversion of the auto plants to the production of defense goods which resulted in many dealerships closing their doors. Vehicle production was halted in 1942 and there were no new cars to sell. When automobiles came back into the market in 1946 they were warmed over 1942 models. In 1949 the auto industry had new styles to showcase and a booming demand was on for cars. Dealerships who had hung on by selling used cars were revitalized. This boom created the economic action for successful dealership groups for the future across the USA.
A major innovation for dealers and the public was the invention of the “monroney label” in 1958. Classically a price list attached to the window of each new car it itemizes the specifics of the vehicle removing the “smoke and mirrors” effect to a sale. This helped restore customer confidence to the exploding auto dealer’s expansion. On the sticker would be the suggested retail price, cost of equipment, handling, delivery charges and taxes.
From 1946 to the early 1970’s dealerships hosted a major annual event each fall when fans flocked to showrooms to view new car introductions. This time could be compared to the World Series in anticipation and buzz. This phenomenon created the hype and show biz quality of dealerships. Each dealer needed to capitalize on this once a year opportunity when showrooms were filled with anxious buyers. To miss this chance meant feeling the negative effects all year. Many dealers created carnival atmospheres, raffled door prizes, and gave gift certificates for free oil changes.
A Detroit Cadillac Dealership showroom floor in 1950. An opening event to showoff the new Cadillac models was a major happening bringing out car fans to see the new styles, kick the tires, and get behind the wheel.
The dealership was now an institution in the buying cycle of the automobile. It was established and created a personal accessibility to the public. Car manufacturers began to see the dealership experience from sales to serve was now part of car culture.
By: Margery Krevsky
Margery Krevsky is the author of Sirens of Chrome: the enduring allure of auto show models www.sirensofchrome.com published by Momentum publishing
For more information on other auto heritage sites, visit www.motorcities.org.
