Bill Gates had said that the Tata Nano in its early version did not sell in large enough numbers due to the “Edsel effect”.

What is Edsel? Of all the car he created Edsel was Henry Ford’s favorite car… it was so good that he named in memory of his only son Edsel Ford….  who died at a relatively young age at 49, of stomach cancer. Edsel was supposed to have some truly awesome features and was to be like no other car before it. Edsel Car was long, wide, lavishly decorated with chrome, had a lot of gadgets and was equipped with engine which could really rustle up some serious power.

In fact, even before the Edsel car was launched there was a lot of hype around it. For months, Ford had been telling the industry press that it “knew” (through its market research) that there would be great demand for the vehicle. Ford also insisted that, in the Edsel, it had built exactly the “entirely new kind of car” that Ford had been leading the buying public to expect through its pre-introduction publicity campaign for the car. In reality, however, the Edsel shared its engineering and bodywork with other Ford models, and the similarities were apparent once the vehicle was viewed firsthand.

Two years, two months and fifteen days later, it had only sold 109,446 Edsels (this included cars bought by Ford executives, dealers, salesman, workers etc). The number amounted to less than 1% of the cars sold in America during that period. On November 19, 1959, Ford pulled the plug on the car. Estimates suggested that Ford lost around $350 million on the car.

So what went wrong? Lets find out…

Continue reading →