Ford's Luxury Car Division

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Why did Ford establish a luxury car division? In 1919, Mr Edsel Ford succeeded his father Mr Henry Ford as president of the company, although Henry still kept a hand in management. While prices were kept low through highly efficient engineering, the company used an oldfashioned personalized management system, and neglected consumer demand for improved vehicles. So, while four-wheel brakes were invented by ArrolJohnson they did not appear on a Ford until 1927. Ford steadily lost market share to GM and Chrysler, as these and other domestic and foreign competitors began offering fresher automobiles with more innovative features and luxury options. GM had a range of models from relatively cheap to luxury, tapping all price points in the spectrum, while less wealthy people purchased used Model Ts. The competitors also opened up new markets by extending credit for purchases, so consumers could buy these expensive automobiles with monthly payments. Ford initially resisted this approach, insisting such debts would ultimately hurt the consumer and the general economy. Ford eventually relented and started offering the same terms in December 1927,when Ford unveiled the redesigned Model A, and retired the Model T after producing15 million units. During February 1922 Ford expanded its reach into the luxury auto market through its acquisition of the Lincoln Motor Company, named for Abraham Lincoln whom Henry Ford admired, but Henry M. Leland had named the company in 1917. The Mercury division was established in 1938 to serve the mid-price auto market. Ford Motor Company built the largest museum of American History in 1928, The Henry Ford.

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