It’s always dangerous to take on economics as a writer. You run the risk that everybody’s eyes will glaze over in the esoterica that is economic theory. But economics is at the heart of today’s tale. I’ve often been asked why the first movers in the compact car field failed so miserably in their earliest iterations. Of the new offerings in the early 1950’s from the independent automakers, only one survived to field a second generation. The rest vanished almost without a trace.
The natural question for car historians (and we car buffs) is why? What caused good ideas to fail so completely when subjected to the judgment of the marketplace? What factors turned good concepts into sales disasters? Was it quality? Price? Let’s peek behind the dry sales numbers and try to reach an understanding of the factors both large and small that killed the first generation of sensible sized cars that came and went all too suddenly.
For the purposes of our discussion, let’s name the first wave. The players: Kaiser-Frazer’s Henry J, Willys’ Aero, Hudson’s Jet and Nash’s Rambler.
All were conventional front engine/rear wheel drive cars and all but the Henry J made a small (by standards of the day) straight six their standard engine. Only the Kaiser entry came factory-equipped with a four cylinder mill, which was later joined by a six that was available in other Kaisers.
Nash started the compact boomlet on April 13, 1950 with its single model Rambler line. The name dated back to the earliest days of the Thomas B. Jeffrey company and gave the car a sporting moniker that was well respected and right in tune with the times. At first, the Rambler was only available in fixed pillar convertible form, but the line was expanded the next season to three models.
Nash’s 173 cubic inch six delivered 82 HP, but the cars’ sturdy assembly and unit body meant that it was heavy and slow. Zero to sixty took 21 seconds. But the little Rambler delivered on economy. Testers of the day reported miles-per-gallon in the low 30s in an era when conventional family cars returned figures in the low 20s. Styling was (and is) always a subjective thing, but the junior Nash looked like a 7/8ths scale model of the full size cars on offer, which was not a bad place to be. Nash scored a solid success with the Rambler, with sales high enough to expand the line for 1951.
It was too bad for Hudson that their stylists didn’t get the message about keeping the dowdy Jet in the mainstream. Despite some real strengths that recommended the car to potential buyers, styling was a deal breaker for a lot of Jet shoppers.
The Jet was well built. In common with its big brothers, the superstructure was welded and braced for a long life. A high profile and elevated seating position made the car seem bigger than its size would suggest, and testers of the day praised its handling and overall road manners.
Unfortunately, its bolt-upright, slab sided profile combined with a rather narrow track (in relation to height) made the proportions ghastly, and buyers rejected the Jet almost out of hand. The Jet made use of the Wasp’s 202 cubic inch straight six, which in the lighter car with tall final gearing returned over 30 miles per gallon. But the Jet faced a mountain that was too tall to climb when shoppers compared its almost $1900 MSRP (stripped down) to an equally de-contented Chevy One-Fifty for $200 less. That sounds like pocket change after 60 years of inflation, but in 1952, this was the difference between a successful car and an abject failure.
Hudson tried everything to move Jets off of dealers lots. The stripped down base Jet was followed in quick succession by the upmarket Jet Liner, but that high price didn’t look any better on a tarted up small car.
The Jet had exhausted the company’s treasury with its development outlay (much of which was borrowed, further driving ups costs with dead weight interest expense) and when the car failed, Hudson had no plan B. In just two model years, Hudson only built a little over 35,000 Jets and when the company merged with Nash, the Jet was sent packing. Newly formed American Motors didn’t have the money to tool and develop two competing compacts, so the Jet became the odd man out and ended as a sad footnote to the history of Hudson.
Meanwhile, over at Willys, by the fall of 1951 the builder of Jeeps was preparing to introduce its first conventional passenger car since early 1942. In theory, the Aero line of cars (CC here) would put Willys back in the mainstream of the industry and better utilize its factories to spread costs over a larger base of sales. With the expansion of the Jeep model lineup after the war, Willys had abandoned traditional passenger cars (where the competition was fierce) and focused on its easy to build all terrain vehicles that had no direct competition in the domestic market. But by introducing the Aero into an as yet unproven market niche, Willys was taking a massive gamble. To hedge its bet, Willys would bracket the market with Ace, Lark, Wing and Eagle models, each in its own carefully focused price point.
Photo from the CC Cohort by canadiancatgreen.
But those price points were still too high. The cheapest Aero still cost buyers almost $150 more than the base Chevy. This made it a tough sell when Chevrolet could spread costs over a production run of millions of cars and use a new marketing tool (network TV) to hammer home its value message over and over.
Willys managed to sell just over 35,000 of all series in the first model year. That turned out to be the best the Aero line would do, as production and sales soon began a decline from which the little Aero would never recover domestically. By 1955, Willys Motors (now part of the failing Kaiser passenger car portfolio) packed up the dies and moved Aero production to Brazil, where the car became the iconic car of a generation (much like the ’55 Chevy in the U.S.)
The Henry J, unlike the other domestic compacts, was a cheap car that aimed at the same buyer who might consider a used car or a Volkswagen Beetle (the kind of people who wanted a new car that could seat 5 and return good fuel economy.) The base Henry J (named after the company’s chairman Henry J. Kaiser) came with a 134 cubic inch four cylinder engine that reinforced its image as a penalty box for cheapskates. Kaiser began production of the Henry J in July of 1950 (right behind the Rambler) but was never able to derive any first mover advantage by jumping into the market early.
Part of the problem was the product itself: The Henry J came to market with no deck lid, fixed rear windows, no glove box and an all-around feeling of cheapness. Along with other penny wise but pound foolish shortcuts, the J was shipped with a then unusual 4 cylinder power plant that was purchased from Willys. Desperate, Kaiser even tried selling the car at Sears, where it was known as the Allstate.
Later, a straight six was installed, which gave the car good performance, and first year sales were very respectable. But the “early adopters” couldn’t sustain the Henry J for long. As unsold cars began piling up around Kaiser facilities, the company began to drown in the debt taken on to keep the ship afloat. The company tried to stanch the bleeding by finally dropping the Henry J in 1953. Kaiser shacked up with Willys later that year and began to withdraw from the passenger car business.
By the fall of 1955, the first wave of compact cars was off the market and many of their makers were defunct or merged out of recognition. The Rambler name would be affixed to a new AMC model for 1956-57, but the first generation, 100 inch wheelbase car was gone. It would, however, be revived when recession rocked the economy in 1957. The “new” Rambler American would debut that fall and have another successful run through the late 60’s.
What went wrong? Why did the pioneers of the compact car market fail so completely? What really killed the first wave of sensible cars in the U.S.? Here is one analysis that ought to stir thought and no small amount of disagreement.
In many autopsies of these cars failures, I have noticed that many critics opine that there was no real market for cars of less than full size in these years. I disagree. If you add up the total sales of compact cars in 1950-54, the number is rather impressive. Just over 126,000 Henry J’s, 35,000 Jets, 91,000 Aeros of all types and a further 140,000 Ramblers meant that the total average annual demand was right around 77,000 units. This would have made any one model a solid success. But spread over four makers, the economics were impossible. The high capital demands of the auto industry made it a herculean task to make money with a niche product.
First, there were no real savings for the makers of small cars in the areas of engineering, labor, marketing or finance. All of those elements cost about the same whether a car was large or small. Print and TV ads actually cost more money when bought in smaller quantities from their vendors. Auto workers made union scale wages whether the car was full size or otherwise. Ditto for engineers and other “back office” input costs.
Only in transportation (more small cars fit on transporters) and materials (less steel, rubber and glass were used by volume) did the compacts have any cost advantage. The development costs for these compacts went a long way toward wrecking their makers’ finances.
For buyers, the calculus was, if anything, even worse. This is not unlike in our own time with snazzy new hybrid drivetrains that add many thousands of dollars to the selling price of a basic, four seat commuter car. The higher initial MSRP was hard to recoup when the car’s biggest selling point was exclusively fuel economy. Gasoline averaged just over 27 cents per gallon from 1950-1955. Repair and upkeep costs were a wash, with oil changes and other routine maintenance nearly the same as full size cars.
A big hidden expense for small car owners in those years was depreciation, as small cars tended to drop in value faster than their full size linemates. The second car market was not nearly as developed in the early 50’s and when the initial owners wanted to trade, many dealers were reluctant to take a slow seller as a down payment on a new car.
The irony of the failure of the first wave of compacts in America was that within a half decade, Ford, GM, Chrysler and Studebaker would bring compact models to market that would sell more cars in a year than the other independents did in five. The Falcon, Corvair, Valiant and Lark all found ready acceptance when they hit the market in 1959-60.
Other than the Lark, the second wave compacts were clean sheet efforts that actually made money by selling in sufficient volume to spread their cost over a long production run. But even at that, profit per unit was pretty lean. Thus GM, Ford and Chrysler had cracked the code on how to make money with small cars. The secret turned out to be this: Have very deep pockets and sell a car through a very large dealer network. This practical difference (that was the difference between a small profit and a large loss) is what eluded the pioneers of compact cars that tried to go there first.
Note: a rerun, with updated images, of an older post.
I always thought the Jet was a good design. Criticized by many for its slab sides, which too me looked very clean and modern and looks good even today.
Of course, I can see the fact it had to sell for a too high a price compared to a Chevy which would be an insurmountable obstacle to success.
We were allows told bigger is better. When GM downsized their cars people were told they had to pay more for less. Except for VWs and Toyotas that were small when they came out small cars have always been considered starter cars. If auto makers had pushed smaller is better, we might have had different results. I’m somewhat of a rebel as I drive a small car and reap the rewards at the gas pump.
I remember in the 1960’s being told to never, _EVER_ get suckered into buying a used Hudson Jet .
Fast forward to the 1990’s and one of the retired guys at the huge shop I worked in had an unrestored spiffy clean Hudson jet two door, original everything and it was his daily driver, no problems .
Americans are a funny bunch of buyers ~ they want it all ut at a low price point .
The first VW Beetles had almost no sound deadening s they were like riding inside a drum of nails .
This changed dramatically with the 1951 DeLuxe “Export” model, the car was essentially the same but for hydraulic brakes, some aluminum trim and a vastly better interior, each year after that they addressed the interior sound issue better and better, the ’53 ~ 1960’s were actually very quiet when new and it’s not difficult to make any old stock VW nearly silent inside .
Henry J was like Crosley before WWII ~ a straight penaty box with zero redeeming features whatso ever .
-Nate
In 1950 the standard Ford, Chevy and Plymouth were cars. By 1959 they were parade floats.
That plus the conventional wisdom that a post-Korean War Ford-Chevy price war destroyed the independent compacts’ value proposition, and only Nash having survived was a result of their early upmarket positioning having launched as a convertible, a fashionable station wagon and a hardtop having warded off the dreaded “cheapskate” image, for the time being at least.
Good rundown of the numbers. Another difference is that Mason marketed Rambler as a second car for middle-class families, not a cheap car for Everyman. Nash was already in the middle range, so its loyalists welcomed a smaller and more economical town runabout. The Jet didn’t look like a Hudson and didn’t appeal to loyalists.
Everyman’s car was a used car or a bus, not a new car.
When I look at the convertible 1950 Rambler, I half expect to see Phyllis Coates to drive up. While the next point is a bit afield, in the 2nd and 3rd seasons of “The Adventures of Superman, you see Clark Kent drive up in a Nash Healy. Gotta wonder how he affords that on a reporter’s salary? Filing for travel expense on stories, where he had to “fly’? The money he made for selling one of his stories for a feature film could not have lasted THAT long.
The Willys did get a second generation – or at least a heavy facelift – but not until after it was built in Brazil. Weird thing is there was a five-year gap between when they were last built in the US and first built in Brazil. That’s a long time to keep unused tooling around, though I guess everyone did that for almost as long during WW2.
Part of the reason the ’59-60 compacts were a hit but the early-’50s small cars weren’t is that “full size” American cars were still reasonably sized and shaped in the early ’50s. By 1960 they had become land yachts with low roofs that kept them from being as roomy as the exterior dimensions suggested, and some buyers wanted a more manageable car.
I think the basic problem with the early ’50s compacts is that they misread the nature of the demand. A lot of consumers in the late ’40s had expressed interest in compacts, which in retrospect seems to have been a reaction to postwar inflation: Buyers saw that cars had gotten bigger, and that they had gotten more expensive, and assumed the one followed the other, which wasn’t ultimately true. Once it became clear that even a strippo Henry J was going to sell for 1939 prices, a lot of the original interest dried up.
Interesting that the price of gasoline was $0.27/gal in 1950. In today’s money, that’s $3.59 a gallon, or pretty much exactly what drivers in the USA pay today.
In 1950, incomes were not as high as today, so $0.27 a gallon was not cheap, hence people looking for a smaller car.
Since Chevy had a $1700 base model Ford and Plymouth must had them too. If you bought one of those no one would look at you funny and criticize you for doing something “weird”. Back in the 1950s the pressure to conform was strong. Reaction to that pressure is what brought about the 1960s culture.
One thing not ever thought of nowadays is that back when these cars were being built, in addition to all of the marketing obstacles that they faced, these cars were a little bit weird. Not mainstream. Sort of foreign. Exactly the kind of car one Senator Joseph McCarthy might accuse someone of driving to advance his cause. It was so much easier to be mainstream back then.
The secret turned out to be this: Have very deep pockets and sell a car through a very large dealer network. This practical difference (that was the difference between a small profit and a large loss) is what eluded the pioneers of compact cars that tried to go there first.
Regarding this theory, I wonder how the 1947 Chevy Cadet would have sold if it had been built. Moreover, how the potential success of what would have been the first compact car would have affected these later independent efforts. Would they have found wider acceptance or would they even have tried, given GM’s overwhelming marketing advantage?
https://www.curbsideclassic.com/blog/the-radically-advanced-but-aborted-1947-chevy-cadet-gms-first-deadly-sin/
The challenge with the Cadet was that GM was selling every Chevrolet it could push out the factory doors – at full sticker.
That type of market doesn’t encourage manufacturers to spend development dollars on new products with lots of new, expensive technology – particularly since the new product may swipe sales from the more profitable products.
The 1954 Nash Metropolitan was an even smaller car and got good reviews for its handling, but as a 2-seater, putting the seats side-by-side in such a narrow package was imposing a needless penalty on the driver. Maybe the larger compacts discussed above would have had a better chance had the engine been truly powerful. The Jet with optional second carb was getting there. Too bad its engine had been as techie as its body.
There was prosperity in the early 1950s. There was a major recession in 1958. People started rethinking their spending habits. The market was ripe for compacts in 1960.
Just after WWII, the public would buy anything that had 4 wheels due to pent up demand. The above were a reaction to this, but their timing was off by 5+ years. By the mid 50’s, GM, Ford, and Mopar were in a sales war during a strong economy. The above were caught in a pinch. Why penny pinch when for a few extra dollar each month, someone could afford a car with all the extras and tons of chrome.
The recession of ’58 caught all off guard while the imports (VW, Renault, Fiat) were making a beach head into the US market squeezing out the above.
In the car business, timing is everything.
Very interesting and informative article. My parents first compact car, which was also their first 2nd car was a 1960 Plymouth Valiant. Like other Chrysler models it had a pushbutton automatic transmission. If I recall correctly, a sliding lever for Park.
I believe it had the 170 cid slant 6. My 2nd car was a 1971 Chevy Nova. That had the 250 cid 6 and Powerglide. I believe the fuel economy wasn’t much better than my first car, a ’67 Chevy Caprice with the 283 V8 and Powerglide.
There might have been an American compact play in these years, but not as a minimalist economy car, the Bug excepted. Mason seemed to have initially gotten the formula right… captivating design, modest sales and strong pricing.
One wonders what the Jet could have become had Barit approved Spring’s original lower height. The image below shows 3-inches removed at the beltline, but he might have intended more. Up-level models could have included Spring’s bucket seats adapted from the Italia. And modest overseas sales would have helped round out the financials (IIRC, knockdown Jets were made in England}. But the Jet needed a modern small Six, preferably with OHCs, in addition to a four-on-the-floor. Surely Hudson’s powertrain engineers were up to the task.
CC effect 5×5, I saw a Hudson Jet at a recent car show not a common car here at any time and a wander around Horopito motors wrecking yard last week while I waited for a Superminx rear drum to be harvested revealed a Willys aero broken by rust into 3 pieces, amazingly its a complete car it may have arrived there with serious rust. but yet another rarely seen car.
OK. Now we know that every manufacturer was aware that the buyer’s market would end by ’51. Ford was gone if the ’49 flopped. Packard wasted money not building Senior Packards, and never recovered. Gov contracts went to the Big Three, and pulled from the others, except Willis. Ike chose a GM president to make this happen. Korea limited steel. Families were making babies. Family cars were needed for the next 20 years. Suburbs were booming. New development was miles from the nearest rail commuting station.
It took from ’45-’55 to get Americans a car, then be ready for a second car. Until then, moms stayed home, or dropped dads off at work or train stations, and shopped at new supermarket plazas. By the ’57-’58 recession, the time was ripe.
So until 1958, domestic compact cars were unsuccessful. The Independents zigged, instead of zagged. They needed new family cars with V8s. Even “successful” AMC Rambler was on vapors until 1958. The Jet, Crosley, Metropolitan, Aero, and Henry J really didn’t have a chance.
Interesting story, however, it’s a pity you didn’t publish actual prices of these vehicle prices for that time. Only once was a price shown as a reference for another brand.