Beetle Envy

The 1963 Ford Cardinal—too radical for America at the time

Here's what happened when Ford tried to react to the Volkswagen Beetle.

Larry Printz – Sep 26, 2024 2:25 pm | 99

This was supposed to be Ford's answer to the VW Beetle, a small, light, efficient, front-wheel drive car called Cardinal. Credit: Ford

Between 100 percent tariffs and now an impending ban on software, it's clear that America's auto industry is more than a little worried about having its lunch eaten by heavily subsidized Chinese car makers. But it's far from the first time that the suits in Detroit have seen storm clouds arriving from far-off lands.

In 1957, Detroit automakers' dominance of the US market seemed unbeatable. Smaller, independent American automakers Studebaker, Packard, Nash, Hudson, Kaiser, and Willys-Overland underwent various mergers to match the might of General Motors, Ford, and Chrysler to little avail.

Yet America's Big Three faced a small but growing problem: foreign automakers.

The fastest-growing? Volkswagen. Inordinately popular worldwide, the automaker sold its millionth car in 1957, of which 36,000 were sold in the United States, making it the automaker's largest export market. Ironically, the problem was of Detroit's making. The Big Three had been offered the bombed-out remnants of Volkswagen for free seven years earlier. Their attitude was summarized by Ernie Breech, Ford's newly appointed chairman of the board, who told Henry Ford II in 1948, "I don't think what we're being offered here is worth a dime."

The automaker Ford spurned was among a flood of increasingly popular imported small cars. While Ford held 31 percent of the US market, it had nothing to counter the Volkswagen Beetle or other Lilliputian imports like the Renault Dauphine. An internal Ford report cited the surprising trend.

Surprising? Yes.

Independent American automakers had tried selling smaller cars. And while the 1950 Nash Rambler and 1953 Nash Metropolitan proved popular, other attempts, like the 1951 Kaiser Henry J and the 1953 Hudson Jet, flopped disastrously. So, it seemed that Americans didn't like small cars.

More accurately, they didn't like the small cars American automakers offered. They did like the ones being imported from Europe. New foreign car registrations in the US ballooned from 12,000 units in 1949 to 207,000 by 1957 and were projected to reach 625,000 by 1961 before falling to 495,000 in 1963. By 1959, even Studebaker noticed and launched the compact Lark. Its sales proved popular enough to reverse its slow slide to oblivion momentarily.

The Big Three responded with new compacts in 1960 with the Chevrolet Corvair, Chrysler Valiant, and Ford Falcon, as well as the upscale Pontiac Tempest, Oldsmobile F-85, Buick Skylark, Dodge Dart, and Mercury Comet—the latter planned as an Edsel until the marque folded in 1959. Of the compacts, the Falcon proved to be the most popular despite being plainly styled, spartan in trim, and unabashedly utilitarian. It was the vision of Ford Motor Company President Robert McNamara.

"McNamara believed in basic transportation without gimmicks, and with the Falcon, he put his ideas into practice," said Lee Iacocca, then a rising star at Ford. "I had to admire its success. Here was a car priced to compete with the small imports, which were starting to come on strong and had already reached nearly 10 percent of the American market. But unlike the imports, the Falcon carried six passengers, which made it large enough for most American families."

The Ford Falcon sold 417,174 units in its first year, a record broken by the 1965 Ford Mustang's 418,812 units and later by the 1978 Ford Fairmont's 422,690 units.

It was a remarkable feat for a company fresh off the humbling failure of the mid-market Edsel. Promoted as something revolutionary, the Edsel was anything but. In contrast, the growing consumer acceptance of smaller cars proved that consumers demanded something fresh. And Ford President Robert McNamara believed he had the answer.

Small, but not small enough

Even before the compact Falcon went on sale, McNamara thought it was too large to be a direct competitor to the Beetle and the Renault Dauphine. By October 1958, the Product Planning Committee, having studied the growth prospects for foreign automakers, began envisioning a car smaller than the Falcon, a "Segment 1" that used interchangeable parts between its US and European operations to keep costs down.

The committee examined the cost of producing a conventional water-cooled, four-cylinder Renault Dauphine engine. Displacing 0.85 liters and using a cast-iron block and aluminum heads, it was considered similar to something Ford might have produced.

With a predicted annual volume of 150,000 units, the cost of Ford building the Dauphine engine in England was 25 percent less than if it were built in the US and 22 percent cheaper than if it were built in Germany. The additional US expense was due to labor rates, which were two-and-a-half times those in England and three times those in Germany. Parts also cost less overseas—$7 cheaper in England and $5 cheaper in Germany. However, the committee was worried that long transit routes, scheduling problems, political conflicts, and union objections might have decreased any foreign cost advantage. Despite that, they decided to build the Segment 1's engine in Europe.

A new bird was hatched

By June 1959, engineering development and testing of a Segment 1 car was underway. Now known as the Ford Cardinal, it was 160 inches (4,064 mm) long and 61.9 inches (1,572 mm) wide and rode on a 97.5-inch (2,476.5 mm) wheelbase, nearly identical to that of the Beetle and larger than the Dauphine. And with its 18.5-cubic foot (524 L) cargo area, the Ford bested Volkswagen's 6.3 cubic feet (178 L) and Renault's 9.3 cubic feet (263 L).

Slated to be built in America and sold in America as well as in Europe, the Cardinal was nearly identical to the German Ford C-Class car, although the Cardinal's engine displacement, transmission, powertrain components, body trim, and electrical items could differ. By May 1960, it was decided that a 1.5-liter, 60-degree V4, produced by Ford of Germany, would power the front wheels and would require $43.4 million to build.

Like the Renault, the Ford sported a three-speed manual transmission, although the Volkswagen had a four-speed. Unlike the imports, which used swing-axle rear suspension, the Cardinal used leaf-spring suspension and 13-inch rubber, rather than the Europeans' 15s. The Ford was the most powerful of the trio, with 71 hp (53 kW) and 89 lb-ft (120 Nm) of torque, versus 41 hp and 66 lb-ft (31 kW and 90 Nm) for the Beetle and 32 hp and 49 lb-ft (24 kW and 66 Nm) for the Dauphine. However, the Ford's 1,672-lb (758 kg) curb weight made it heavier than the 1,623-lb (736 kg) Volkswagen and 1,502-lb (681 kg) Renault. Ford expected the Cardinal to return 27 mpg (8.7 L/100 km), similar to that of the Volkswagen's 26.6 mpg (8.8 L/100 km) and a 25 percent improvement over the Falcon, although it trailed the Dauphine's 30 mpg (7.8 L/100 km).

Costs proved daunting

While the Cardinal's engineering advances, engine, transaxle, and sheet metal tooling were to be imported to keep costs down, at $1,306, the Cardinal was estimated wholesale for $8 more than the Volkswagen Beetle, $64 less than the Renault Dauphine, and $272 less than the Ford Falcon Tudor. With plans to produce 150,000 units annually, Ford expected an annual profit of $23 million, a 13.4 percent return.

And it was needed. European imported car sales volume had hit 110,000 units, which was greater than the company predicted for 1959. What was more concerning for Ford, though, was that a Beetle wholesaled for $465 less than the Ford Fairlane and $280 less than the Falcon. That was large enough for Volkswagen to grab more market share. And the Fords all cost more to own. A Ford Fairlane cost $1,434 to drive 10,000 miles annually, while a Volkswagen Beetle required $812. By comparison, a Falcon ran $1,247, while a Cardinal was expected to cost $1,072.

Nevertheless, Ford believed the Cardinal would be the first real competition that VW faced in the American market, a segment estimated to now be some 700,000 units strong.

The car’s takeoff was grounded

In November 1960, McNamara promoted Lee Iacocca to general manager of the Ford Division. The Cardinal was fait accompli as the year wound down, and McNamara joined President-elect Kennedy's administration as secretary of defense. Iacocca then replaced him as president of Ford.

Under Iacocca, the Cardinal underwent changes that most likely were ordered by Iacocca to make it more sellable. Its wheelbase grew 2 inches (51 mm) while its length expanded 7 inches (178 mm), which increased its weight, cost, and proposed wholesale price, now $1,414, or $100 more than the Beetle.

Then in March 1962, word leaked of Ford's new small car.

"Hottest news was Ford's decision to introduce the US's first ‘compact compact,' a 99-in. wheelbase car called the Cardinal," Time Magazine wrote. "Designed to capture a chunk of the market now held by the Rambler American and such utility imports as the Volkswagen, the Cardinal will be produced, starting in July, at the same Louisville plant that made the ill-fated Edsel. To cut labor costs, Ford will have some Cardinal parts—including the engine, transmission, and differential—machined in Germany and shipped to Louisville for assembly. Ford's German and British subsidiaries will manufacture local variants of the Cardinal."

Pricing was then $1,700, and at that price, Iacocca was not satisfied.

"When I finally saw the Cardinal, I was underwhelmed. It was a fine car for the European market, with its V4 engine and front-wheel drive. But in the United States, there was no way it could have sold. Among other problems, the Cardinal was too small," Iacocca later wrote. "And while its fuel economy was great, that wasn't yet a selling point for the American consumer. In addition, the styling was lousy."

Despite Ford's $35 million investment in the Cardinal, Iacocca told Henry Ford II that the Cardinal was a loser.

"To bring out another lemon so soon after the Edsel would bring this company to its knees," he told Ford. "We simply can't afford a new model that won't appeal to younger buyers."

Within a month, a press release relayed the news: The Cardinal is dead.

"We were considering the introduction of a new, smaller, lighter car late in 1962." We pointed out, however, that "changes in market conditions, or other factors, may cause these plans to be altered," Henry Ford II said. "After long and serious consideration of market conditions and other factors, it was decided to defer indefinitely the production of the car in the United States."

Iacocca never liked McNamara's spartan Falcon, and he certainly didn't like the Cardinal. He had his own ideas.

"I was becoming increasingly aware of the economic power of the younger generation, a power that had not yet been recognized in our industry," Iacocca said.

A Ford Taunus 12M, reproduced from the brochure — The Cardinal never went on sale in the US, but its German doppelgänger, the Taunus 12 M, sold well in Europe. Credit: Ford

It was that thinking that would lead to the creation of the Ford Mustang, a vehicle based on McNamara's Falcon, with the first prototype derived from the Cardinal prototype. Nevertheless, the Cardinal did see the light of day as the German Ford Taunus 12M, selling some 2.5 million units between 1962 and 1970.

Yet Iacocca gave McNamara credit.

"McNamara was ahead of his time—10 years, to be exact. A decade later, after the OPEC crisis, the Cardinal would have been a world-beater."

Listing image: Ford

99 Comments

Small, but not small enough

A new bird was hatched

Costs proved daunting

The car’s takeoff was grounded

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