At the time, Studebaker was faced with strong competition from the Ford Motor Company. Ford was not only producing more vehicles but actually dropping prices as
more cars were built. Henry Ford had proven his ideas on the mass production of automobiles and, in fact, pioneered technologies that became the backbone of the industry.
Studebaker built more factories to offset the costs of rail transportation in delivering the models to the dealers. In addition, it was war time and sales dropped in 1916
because military sales went down after the initial 1915 procurement of vehicles needed for the war. The company also had a new president, Albert Erskine, who was very dynamic
and brought in lower prices which helped stimulate sales. Erskine, however, gave out generous dividends to share holders which cut into funds that could have been better used
in the development of the company.
Sales again dropped in 1917 and left Studebaker with many cars which had to be stored through bank loans cutting into the company profits. As it was, over 60,000 of the
1916 Studebaker Touring cars were produced.