America was producing almost as many cars in the late 1920s as in the 1950s (5,358,000 in 1929, against 5,700,000 in 1953). The really big and absolutely genuine growth stock of the 1920s was General Motors: anyone who in 1921 had bought $25,000 of GM common stock was a millionaire by 1929. GM had been built up in the Twenties at the expense of Ford’s market share by a genius called Alfred P. Sloan. In 1920 Ford had 55.67 percent share of the industry, making 845,000 cars a year. Every other car sold was a Ford. GM came second, selling 193,275 a year. Ford had a mechanical strategy, making the best-value car at the lowest possible price, changing it little, except for mechanical reasons, and offering a little choice.
While Ford made the product as well as he could, then looked for people to buy it, Sloan did it the other way round. He produced the widest possible range of cars for the maximum spread of customers. He said there was nothing new in it; everyone who made shoes did the same. He had five basic brands of car – Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac – to cover the major price brackets, but each produced in numerous versions. And the whole range, from 1923, changed every year. His cars looked more and more imposing as they expanded in size, guzzled more gas and piled on the chrome. He made GM into the largest manufacturing company in the world.
GM made it easier by installment purchase. It was the first big company to established a wholly owned subsidiary for this purpose.
The 5 percent of the population with the top incomes had one-third of all personal income, and they did not buy Fords and Chevrolets.
