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The American automotive industry wasn’t always run by Detroit’s Big Three and a smattering of other multinational manufacturers. Ford may have been pumping out the Model T a century ago, but plenty of independent automakers were selling cars to the public. Auburn, Chandler, Franklin, Oakland, Packard, Pierce-Arrow, Studebaker, Graham-Paige, Hupp Motor Car, and dozens of others dotted the landscape. But where did they all go?

The Great Depression

Before the stock market crashed, new cars weren’t the mass-market transportation tools they are today. Their relatively high cost meant the middle class and above could afford them. But with millions of Americans from all socioeconomic classes out of work and struggling to make ends meet, the industry experienced a 75% decline in production between 1929 and 1932, BCG asserts.

There were plenty of independent automakers that succumbed to the languishing economic conditions. For instance, Auburn shut up shop in 1937—even though E.L. Cord’s stock manipulations contributed to the demise, too. Hupp Motors Cars built their last Skylark in 1939, yet their will to innovate rather than build quickly was also a reason. In an effort to cut costs and improve efficiency, many companies began to consolidate operations. General Motors (GM) acquired several smaller automakers, such as Oakland and Cadillac, to name one.

The introduction of mass production techniques, pioneered by Ford, also helped to improve efficiency and reduce costs. Many companies, such as Ford and GM, responded by introducing new, more affordable models, such as the Ford Model A and the Chevrolet Standard Six. Many remaining independent automakers weren’t able to drop prices through the offset of mass manufacturing. The remaining that failed to acquiesce to the times and merge were gone by the time the U.S. entered WWII.

Post-war independent automakers

Packard was an American independent automaker
1951 Packard Sedans | FPG/Hulton Archive via Getty Images

The 1950s were times of rapid growth and change in America’s economy, and the automotive industry was at the forefront. In particular, the period was marked by the emergence of new independent automakers that challenged the dominance of established firms like Chrysler, Ford, and GM, which controlled 90% of the market. These companies had established themselves through a combination of technological innovation, aggressive marketing, and economies of scale that made it difficult for any new competition.

The main players in the independent automaker world were limited to just a handful by this point. Studebaker, known for its style; Nash, known for compacts; Hudson for its speed; Packard for its traditionalism; and Kaiser-Frazer for its hodgepodge of vehicles, including the Jeep.

Despite the success of these independent automakers, the industry remained highly competitive. The Big Three, however, wanted to mount an assault on the industry that left them the remaining 10% of the market. These independent firms faced many challenges, including the intense competition that arose from the infamous 1953-54 Ford-GM price war.

The 1953-54 Ford-GM price war

Nash was an independent automaker
1953 Nash Ambassador Custom | Michael Ochs Archives via Getty Images

The origins of the price war can be traced back to the early 1950s when both Ford and GM were experiencing declining sales. Both companies began offering steep discounts on their products to boost demand, which quickly turned into a full-blown price war. Over a year, both firms slashed prices and offered incentives to lure customers away from their competitors. At its height, the price war resulted in massive losses for both companies. But independent automakers also struggled to maintain market share.

With their smaller profit margins and less established brands, independent automakers were unable to compete. The deep discounts offered by Ford and GM meant most of them were forced out of business during this period.

The aftermath for independent automakers

The Ford-GM price war knocked down the remaining independent automakers: Studebaker, Packard, and Kaiser-Frazer. On the other hand, Nash—now automaker/refrigerant leviathan Nash Kelvinator—and Hudson decided to band together. They created American Motors Corporation (AMC), producing solid, dependable, compact vehicles—and a few other odd creations.

It would take a few years, but in the Eisenhower Recession of 1958, Ford and GM tried price slashing again to rebound from the sharp worldwide economic downturn. This time, the ghosts of independent automakers’ past were vindicated as the Big Three lost billions, and AMC posted a sales increase with their now-revered Rambler.


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