The Model T Once Held Half the Global Market, Then Lost It to GM After 19 Years Without a Redesign
Ford made cars affordable for ordinary people with a single model, and the Model T at one point accounted for more than half of global car sales; but precisely because it came in one variant, one color, and went 19 years without a redesign, consumers had no reason to trade up, and the market was taken by GM.
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One car once took half the global market
General Motors and the Model T were both born in 1908, but Ford chose a different path: build only one car. The Model T reached cumulative production of 15 million to 16 million units, making it the world's second best-selling model; first place is the Beetle, which had a longer life cycle, at about 21 million-plus units. What Zhang Junyi cares about more is market share — this one car at the time accounted for more than 50% of global car sales. He says there may be cars that sold more, but no car will have a higher market share. Compare with today: while some automakers are still struggling at 50,000 or 100,000 units in sales, this car had already produced more than 10 million units, equivalent to a country's annual car output.
— Zhang JunyiMaking cars affordable even for the workers who built them
The reason for building only one car was to simplify the configuration as much as possible and save costs as much as possible, so consumers could afford it: the price fell from several thousand US dollars to 800 dollars, and finally to 200 dollars. What does 200 dollars mean? At the time, some Ford workers earned a daily wage of 5 dollars, meaning the workers building the cars could afford one themselves — that was his standard for the craft. Black was not chosen at random either: black paint dried faster than any other paint, which was the technical reason, and black was also the easiest for everyone to accept. Zhang Junyi sees this obsession with cost and craft as a tradition that has run through Ford the company all along.
— Zhang JunyiMusk is not imitating Ford, he is the same kind of transformer
Ford's inspiration for reworking the assembly line is said to have come from the slaughterhouse line: start with components, then move into full-vehicle assembly-line production, solving the problem of mass production. But the more fundamental move was vertical integration — making core components, doing full-stack in-house development, even acquiring mineral resources, transforming the entire price chain. On this basis Zhang Junyi compares Henry Ford and Musk: not imitation, but the similarity of transformers. For Musk, building cars is only a vehicle; what he really wants to change is the energy management system; Ford, by contrast, wanted to make travel easy for everyone and give everyone a decent life. He also points out that leading automakers define management paradigms — Ford introduced the assembly line, GM introduced many varieties in small batches, Toyota introduced lean production.
— Zhang JunyiThe fastest promotions go to finance people
Ford places great emphasis on financial performance; this is the legacy left by the early batch of operations-research talent who came out of the military. One direct consequence: inside Ford, people who can do finance get promoted quickly, not technical people — financial performance is the first pursuit. This logic let Ford withstand the financial crisis — strong profitability, high margins on large-displacement models, tight management of the financial business — so among the three big American automakers it took a relatively smaller hit. But Zhang Junyi also points out that there was a credit reason Ford was replaced by GM: car buying shifted from cash payment to loan purchase, an industry-level change, and Ford was slow on this point; and conservatism is sometimes itself a mistake, for example failing to diversify when it should have.
— Zhang JunyiThe family's 100% control drove Iacocca out
The Ford family's control over the company is 100%; the family is the actual controller, and without family support no CEO can rise, a rule that continues to this day. The cost was driving one of its best salesmen out of the company: Iacocca developed the Mustang, still Ford's most famous model, but because of the family's management of the company he could not rise further and his power could not expand, and in the end the family pushed him out of Ford. Zhang Junyi stresses this was not his failure — with government help he revived Chrysler, the smallest of the big three. Translated into today's context: why would the best professional managers still be willing to go to a family-controlled company? Because the platform itself is part of the achievement.
— Zhang JunyiSelling cheap in China is Ford's old problem
Zhang Junyi says Ford is relatively conservative, and conservatism is sometimes a mistake: not diversifying when it should, not being aggressive on models, having no suitable model to offer in certain markets. In China, Ford's problem is that when it imported models it did not build the brand high enough, so it competed for a long time in a relatively low-price space and struggled throughout; after importing a more high-end brand things got somewhat better, but there was still no particular improvement. By contrast, GM has a research and development company like PATAC that stays close to local markets, while Ford's decision-making center and organizational structure are still mainly American, relatively far from China. The bigger backdrop: new demand is not in the US, China is the largest consumer market, and without a firm foothold in China it is quite hard to become a global leader.
— Zhang JunyiThe family provides long-termism, professional managers provide innovation
The mechanism Zhang Junyi lays out is this: the family is loyal to the company and long-termist, but it is impossible for every generation to produce a smart business manager; professional managers are innovative, but once the family loses control, managers may overreach and turn the company into their own. So you need family controlling stakes to maintain long-termism, and you also need to keep bringing in fresh blood. Ford has used professional managers rather well: after the financial crisis it brought in outside-system talent like Mulally from aviation to rescue the business; Ford has never gone bankrupt, while the other two American automakers both have. After bringing in outside talent in the third generation, Ford at one point became the Whampoa Military Academy for industry managers.
— Zhang JunyiThe current family head is rated as somewhat of a spendthrift
Ford's current family manager is the fourth generation, Bill Ford, who has served as president and is now executive chairman; he is the son of Henry Ford II. Zhang Junyi's assessment of him is ‘so-so’; some think he is a bit of a spendthrift — he bought a pile of luxury car brands and sold a pile, such as Aston Martin and Jaguar Land Rover; but he also held the company up during the financial crisis, and he is an environmentalist, so the picture is both good and bad. Zhang Junyi's summary: successful families all operate with a low profile and do not put family matters into business operations; the Ford family's descendants are simple and every generation has children, so no news is good news. Ford's approach in China is minimal-scope investment and asset-light operations.
— Zhang JunyiIn their own words · checked verbatim
I never had any particular love for the farm; what I loved was only my mother on the farm.
我对于农场从来没有特别的爱 我爱的只是在农场里的母亲
Zhang Junyi6:05
If you keep producing and the color, design and quality never change, why should I buy this car?
你一直生产下去以后 颜色设计质量都没有变化 我为什么要买这个车子呢
Zhang Junyi20:20
He believed the car did not have to be made as a complete luxury item, but rather as a product that ordinary people could all use.
他认为这个车子并不一定要说做的完完全全是个精品 而是做成一个能够使普拉众都使用的这样的一个产品
Zhang Junyi24:22
In his later years the heir he had designated died, and it was his eldest son who died; for the old gentleman it was a very heavy blow.
它晚年的时候指定的继承人去世了 也是它的大儿子去世了 对老先生来说打击非常大的
Zhang Junyi32:29
Family members are long-termist, but professional managers are innovative, so in a company's development process you have to balance the relationship between the two; only then can the company operate sustainably.
家族的人员 他是长期性的 但是职业经理人有创新性 所以在一个企业 发展过程当中 要平衡这两者的关系 这才能使得企业能够永续经营
Zhang Junyi36:32
He did not care about background, nor whether he himself was poor or not; as long as he could once again form a family with his wife, he was fearless.
他不在乎出身 也不管会自己贫穷与否 他只要能够再一次 能够跟他太太组合家庭 他就无所畏惧
Zhang Junyi44:48
Figures
| Model T global market share | more than 50% | 11:10 |
| Model T price changes | several thousand US dollars → 800 dollars → 200 dollars | 12:11 |
| Daily wage of some Ford workers | 5 dollars | 12:11 |
| Model T production years | 19 years | 20:20 |
| Age at death of Edsel Ford | 46 | 33:29 |
| Year Ford's mother died and the year he left the farm | 1876, 1878 | 6:05 |
| Year Ford Motor Company was founded | 1903 | 9:10 |
Glossary
- vertical integration
- A company developing in-house or acquiring upstream and downstream links; Ford even acquired mineral resources to push down vehicle costs
How to listen
Founders, investors and auto-industry practitioners focused on new energy vehicles, vertical integration and corporate succession, who want to find today's parallels in Ford's history.
If you have no interest in personal biography, the section from 2:51 to 20:20 on old Ford's entrepreneurship and family can be fast-forwarded.