Sam mclaughlin and his brother went for a drive in

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carriage by hand for his neighbour who admired his carpentry skills. Sam McLaughlin and his brother went for a drive in the automobile owned by their bookkeeper and liked it very much (horseless carriage). Sam continued to test automobile and by 1907 he had decided that he wanted to build the Buick in Canada. His father was on board and Sam approached his friend Bill Durant, also a former carriage maker whom he had met ten years earlier at a professional convention. Durant bought the Buick Motor Company in U.S. Sam penned with Durant and which allowed Sam to build the McLaughlin with Buick Motors. The concise document officially launched the birth of the McLaughlin Motor Car Company. The car had Canadian-designed bodies and American-built Buick engines. The Tariff of 35% of importing products to Canada remained also on Automobile. the decisions by Henry Ford and Bill Durant to Canadian manufacturers were made for a number of reasons. First, McGregor and McLaughlin possessed existing manufacturing plants to make horse-drawn buggies and carriages. Retooling these plants to make cars would be faster and cheaper than building a whole new plant into Canada. Further, capital was at a premium in the early days of the automotive industry. Banks saw the new industry as risky and would not lend, and growth in U.S. demand for cars absorbed what capital the U.S. auto makers had for domestic expansion. Thus, licensing was logical and expedient. However, 35% tariff was not the whole story, automobiles were also required parts, and U.S heavily relied on outsourcing the manufacturing of their vehicle parts. This required the gov't to do a balancing act to encourage U.S. expansion into Canada while at the same time promoting Canadian parts in industry. The Government brought the tariff down to 30%. This strategy worked since it encouraged the retooling of Canadian assembly plants from producing buggies to cars by offering some cost advantages. It also encouraged domestic sourcing of parts as it gave benefits to those who did so. Overtime, parts and materials were increasingly sourced in Canada, including iron, steel, brass, and bronze, jute, tubes, and pipe, lead, glass, lumber, and fabric. Ford Motor Company of Canada would take the greatest advantage of the benefits of sourcing locally. Its fundamental strategy was mass production of a low-cost vehicle that was affordable to the masses. McGregor took step to reduce costs as part of his company's cost leadership approach. Fords strategy followed by McGregor was to limit the number of models offered (narrow focus) compared to other automotive manufacturers in order to achieve higher volumes for parts and materials. This resulted in volume discounts and reduced transaction costs. Ford applied economies of scale in Canada in a masterful way through low prices, made the car affordable and quickly took the lead over other manufacturer. GM surpassed Ford in 1920. Automobile was viewed as 'exotic'. The Model T was cheap, reliable and standardized. Only came in one colour.
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