My first car that my parents let me drive in High School and College was a 1964 Ford Galaxie 500 convertible. The vehicle was already 15 years old when I started driving -- the 8 cylinder, 289 hp engine got about 10 -15 miles per gallon of gas and burned a lot of oil as observed by the blue smoke. So how did American cars companies in the 1960’s adopt to the megatrend change of smaller more fuel efficient cars?

Recall the counterculture hippy popularity of the VW Beetle and other small cars being made in Europe and Japan? For current fuel efficient vehicles, check out this DOE publication. The Toyota Rav 4 Hybrid that we purchased 14 months ago leads the small SUV category averaging 32 mpg.

The book Business Adventures: Twelve Classic Tales from the World of Wall Street by John Brooks originally published in 1959 and updated yearly for another decade describes in one chapter “The Fate of the Edsel.” Ford Motor Company used public-opinion polls and motivational research to define what they thought American consumers wanted at the time. Ford invested over $250 million costing more than any consumer project in history (at least at that time). Brooks wrote, “…the fashion of the day…were cars that were long, wide, low, lavishly decorated with chrome, liberally supplied with gadgets, and equipped with engines of a power just barely insufficient to send them into orbit.”

The first Edsel’s came out in the fall of 1957 and just a few months later Consumer Reports published articles that were not complementary calling it “more uselessly overpowered…more gadget bedecked, more hung with expensive accessories than any car in its price class…The luxury-loaded Edsel…will certainly please anyone who confuses gadgetry with true luxury.” The 1958 Edsel E-475 V-8 contained 345 hp in a 410 cubic inch engine.

Brooks citing Consumer Reports concluded that the “car seemed to epitomize the many excesses with which Detroit manufactures were repulsing more and more potential buyers.” Many of the Edsels had serious quality control problems causing frequent breakdowns.

To break even, Brooks said Ford needed to sell 200,000 Edsel vehicles but after about 2 years sold only about half that number which was less than 1% of all passenger cars sold in the US during that period. Ford discontinued the series losing about $350 million. See Business Insider for details.

Brooks quotes Time Magazine: “The Edsel was a classic case of the wrong car for the wrong market at the wrong time.” The Wall Street Journal stated, “Large corporations are often accused of rigging markets, administering prices, and otherwise dictating to the consumer.” WSJ commented on lack of consumer support for the end of the Edsel after only two years, “When it comes to dictating, the consumer is the dictator without peer.”

Per Hennings.com, Ford made up for its losses with the frugal Falcon, a mega-hit that became the Mustang's springboard. Its sibling, the Comet, became a Mercury instead of an Edsel.