Low Monthly Payments Catapulted GM Ahead of Ford in the Late 1920’s!

As I have been researching GM’s past, it is amazing how much some things just haven’t changed since then. Styling, prestige and monthly payment were just as important in the 1920’s as they are today.

In 1923, Alfred P. Sloan, a graduate of the prestigious Michigan Institute of Technology with a degree in electrical engineering, became the president of General Motors. Under his reign, GM passed Ford Motor Company as the largest automobile company in the United States. Sloan is credited for this as he developed management techniques that helped him handle the complexities of what was becoming a monster of a company, manufacturing and selling just about everything you could imagine in transportation, from planes and trains to automobiles.

Sloan used consumer credit and low monthly payments to allow far more people to buy GM vehicles, while Ford was moralistically opposed to credit. Sloan paid particular attention to consumer demands. While Ford was building basic transportation, Sloan recognized that consumers no longer wanted the most basic and cheapest model. They wanted power, styling and prestige. Credit allowed people to afford more car.

Sloan is credited with developing the pricing ladder that GM still uses today. By having many brands GM could meet the needs of buyers from entry level to total luxury, and move customers up through the brands as their position in life improved. Sloan felt that Chevrolet should represent the car that everyone can afford, up through Pontiac for the sports car enthusiast, Oldsmobile for entry luxury, then Buick and ultimately Cadillac for the most discriminating buyer.

Alfred Sloan also began a plan to change the styling of cars every year. He knew that as styles changed, consumers would want the new model, and planned obsolescence was invented. It would be a while before Ford would catch on to this new marketing. It worked and it worked well for GM as sales of their brands soared.

Today people still use credit to buy more car. Styling changes happen every year, and consumers are still motivated by styling, power and prestige. Of course today we must ad fuel economy as a consideration. I think Sloan would be proud that GM has more models today that get 30 mpg highway than any other manufacturer.

The deal still can take the day. GM with its 100th anniversary is offering GM employee pricing, the same price they sell to their employees, to every customer through the end of September. This added to huge rebates, represents the best pricing GM has ever offered.

Some things have changed over time and some have not. In 1930 GM was known for the most stylish, powerful, and best built motorcars in the world. Today GM’s quality and styling are world class.

For fore information on GM vehicles, or to comment on this article go to www.gmgiant.com. Drive safely!