In the second part of our historical series looking at the development of Canada’s automotive retail industry, we look at the Roaring Twenties
In 1929, the Art Deco-designed Automotive Building opened at Toronto’s Canadian National Exhibition for auto shows
If the 1910s were the auto industry’s infancy, the 1920s were when it came of age.
Innovations from the previous decade, such as Henry Ford’s moving assembly line and Cadillac’s self-starter, brought down prices and made cars easier to drive. They were now truly cars, not horseless carriages.
Ford was still the sales leader moving into the 1920s. After introducing his Model T in 1908, Henry Ford discontinued all of his other models to concentrate on it.
By 1924, he’d made 10 million of these models, en route to a final tally of just over 15 million by 1927. At the T’s height, more than half the cars in the world were Fords.
But mass production brought new issues. No longer were cars being slowly cobbled together one at a time. There were hundreds of thousands of them, and the major automakers were hammering on their dealers to take them as inventory. The problem was that many dealers, used to buying just a few cars and almost immediately turning them over, didn’t have the cash to stock their lots.
General Motors was one of the first to address the issue, forming GMAC in New York City in 1919 and opening a Toronto branch that same year.
Walter Chrysler with his first Chrysler car in 1924
According to Louis Hyman, author of Debtor Nation: The History of American Red Ink, GMAC initially lent money only to its dealers.
Most consumers didn’t have the cash either, and with many banks unwilling to take the risk, a new industry of consumer financing companies sprang up to fill the gap.
It didn’t take long for the automakers’ financial arms to realize the opportunity and reach out to customers as well. By 1924, GMAC was bringing in about 5 per cent of GM’s overall profits.
Hyman also reports that, “Dealers who refused autos were in danger of losing their contract with the manufacturer,” and dealer turnover in the early days could be high.
The majority of cars sold in North America were domestic, but there were a lot of manufacturers and new ones were opening all the time.
Canada was the second-largest producer of cars worldwide, although many of them were either American cars made under license, or built using U.S. components. Some of the more successful during the decade were Gray-Dort, London Six, and Brooks Steamer, alongside such also-rans as the Winnipeg, Lavoie, Gilson, and Glen.
Ford and GM’s Canadian subsidiaries were still steaming along, and in 1922, Henry Ford bought Lincoln from its founder, Henry M. Leland, who had previously started Cadillac and then sold it to General Motors. Then two years later, the last member of the “Big Three” put out its shingle.
Walter P. Chrysler was both a machinist and a financial genius who had worked for Buick and then Willys-Overland. His specialty was bringing troubled companies back to profitability, which he did for a struggling Detroit automaker called Maxwell.
By 1924, Maxwell was his, and he turned over its facilities to production of a new car he named for himself. In 1928, he bought Dodge, and developed two new brands he named DeSoto and Plymouth.
Henry Ford posed with his first and his 10 millionth car in 1924
The Big Three operated alongside smaller companies such as Studebaker, Packard, Pierce-Arrow, Nash, and Hudson. Even Rolls-Royce got into the action, opening a plant in 1921 in Springfield, Mass. to avoid import tariffs, although it only built 2,944 cars over ten years before the Great Depression killed luxury-car sales and the plant closed.
All of the North American independents would eventually fold by the 1960s, but the 1920s essentially set the domestic automotive stage that would continue until the rise of the Japanese imports half a century later.
That also included fuel. The 1924 New York Auto Show was the first to display only gasoline-powered vehicles, with no steam or electricity in sight. Gas stations were changing, too, as municipalities forced them to move their curbside pumps away from traffic. To pay for the land they had to buy, they started offering repairs, tires, batteries, and car washes.
Not all Canadians drove on the right side of the road, and from 1920 to 1924, British Columbia, New Brunswick, Nova Scotia, and P.E.I. all moved from the left. (Newfoundland didn’t switch until 1947, but it wasn’t yet part of Canada.) Even so, a complete network of roads was still well into the future.
Car selling was changing, too. The influence of women was growing, and automakers knew they had to make at least a token effort to appeal to them — which also allowed them to convince households that they needed a second car.
And while most buyers had gone directly from horses to cars in the automobile’s earliest days, they were now trading in those “first” vehicles. Dealers and automakers had to learn how to price, market, and finance used cars so they would complement and not cannibalize new-car sales.
The earliest ads were pages of dry technical information with plain drawings of the car. But when Cleveland-based advertising agent Ned Jordan started a car company, he created colourful ads where the car was secondary.
His most famous was for the 1923 Jordan Playboy, which showed it racing alongside a rider on horseback, with fanciful prose of how “Somewhere west of Laramie” there was a cowgirl who wanted that car. This new “image” advertising, selling sizzle rather than steak, would eventually become the norm.
The Model T had changed relatively little over its lifespan, and Ford was losing its edge as many buyers turned to cars whose styling was regularly being updated.
The company ended production abruptly in May of 1927, laying off employees and ultimately causing a few dealerships to close. That December, Ford introduced its popular Model A, sending it out into a robust marketplace where buyers wanted the latest and greatest.
But those good times didn’t last. The stock market crashed on October 29, 1929, bringing the end of the Roaring Twenties, and creating a Great Depression that would rock the auto industry to its core.
