History of the American Car Industry

Practically synonymous with America’s rise and fall as the world’s greatest industrial
powerhouse, the American car industry is a significant facet of the country’s culture and history.
A country reliant on automobiles, the United States dominated the early years of car
manufacturing in terms of production. Indeed, from the turn of the 20th century until well into
the 1980’s, America was comfortably the world’s largest producer of automobiles.
Three important companies, all based in the Detroit area, emerged as major powerhouses,
utterly dominating the industry by the end of the 1920’s. These companies were General Motors,
Chrysler and Ford.
General Motors was founded in 1908 in Flint, Michigan by William Durant and its
instant success allowed the company to acquire a number of smaller yet iconic car companies,
most notably Buick and Cadillac. Under the leadership of Alfred P. Sloan, the company became
the biggest car manufacturer in the world. GM was known for its innovation in catering to
different social classes with varying price structures.
The Ford Motor Company, founded in 1903 by Henry Ford, had a contrasting
approach to General Motors. Known as the first major American car company, Ford was known
for their mass-production innovations, which complimented the company’s philosophy. The
company valued producing a simple vehicle for public mass consumption.

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 Chrysler was founded in 1920 by Walter Chrysler, a former GM executive. His
experience within the company allowed him to gain valuable insights into the industry, and his
quick acquisition of Dodge allowed the Chrysler to expand his operations significantly,
following a similar business model to GM.
These three titans dominated the industry for decades, outliving any remaining rivals
and surviving a number of obstacles as the century progressed. The American auto industry
boomed in the mid-20th century and the Big Three remained attuned to the stylistic innovations
of the time.
By the 1970’s, more pressing issues emerged from a number of different areas. Foreign
imports were becoming increasingly common, with the Japanese Toyota and the German
Volkswagen offering different alternatives to American-style cars and cutting into their
dominance of the American market. The companies’ attempts to adapt and compete with foreign
designs initially ended in failure.
The end of the 1980’s saw a brief renaissance of the American car industry, due in part to
falling oil prices. All of the Big Three, particularly GM, adapted well to the vast technological
innovations in the industry at the time such as fuel injection and disc brakes. Additionally, the
Big Three had began to invest in foreign car companies as a means of limiting competition.
The economic recession of 2008 however proved to be a devastating blow, triggering the
Automotive Industry Crisis of 2008-10. While Ford emerged comparatively unscathed, GM and
Chrysler were left devastated. All requested financial aid, with Chrysler declaring bankruptcy,
causing partner Fiat to assume greater control.
While The Big Three have, relatively speaking, stabilised since their all-time low, they remain in
a vulnerable position and certainly do not exert the same dominance of the American market as
they once did. While the American car industry still survives, it remains a shadow of its former
glories.
Automotive industry in the United States

A Ford Model T, built in 1927. Originally released in 1908, it was the first affordable
automobile and dominated sales for years.

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 The automotive industry in the United States began in the 1890s and, as a result of the
size of the domestic market and the use of mass production, rapidly evolved into the largest in
the world. The United States was the first country in the world to have a mass market for vehicle
production and sales and is a pioneer of the automotive industry and mass market production
process. 
American manufacturers produce approximately 10 million units annually. While
production peaked during the 1970s and early 2000s at levels of 13–15 million units. Starting
with Duryea in 1895, at least 1900 different companies were formed, producing over 3,000
makes of American automobiles. World War I (1917–1918) and the Great Depression in the
United States (1929–1939) combined to drastically reduce the number of both major and minor
producers.
However, by the end of the next decade the remaining smaller producers disappeared or
merged into amalgamated corporations. The industry was dominated by three large
companies: General Motors, Ford, and Chrysler, all based in Metro Detroit. Those "Big Three"
continued to prosper, and the U.S. produced three quarters of all automobiles in the world by
1950 (8.0 million out of 10.6 million). In 1908, 1 percent of U.S. households owned at least one
automobile, while 50 percent did by 1948 and 75 percent did by 1960. Imports from abroad were
a minor factor before the 1960s.

The Ford Model T (foreground) and Volkswagen Beetle (background) are among the most mass-
produced car models in history.

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 How The U.S. Automobile Industry Has Changed

For decades, through the boom and bust years of the 20th century, the American

automotive industry had an immense impact on the domestic economy. The number of new cars
sold annually was a reliable indicator of the nation's economic strength. But when
the recession hit in 2007-2008, new car sales declined precipitously, reflecting the overall
decrease in consumer spending.

Help
Although Ford had a cash reserve of billions as a hedge against hard times, other
automakers like General Motors (GM) and Chrysler faced bankruptcy. In early February 2012,
however, news reports showed the multi-billion dollar U.S. automotive industry was enjoying a
brisk recovery, and both GM and Chrysler have paid back the government bailout loans. Big
profits were posted again. GM, Ford and Chrysler, Detroit's so-called "Big Three," the
classic OEM manufacturers, were flourishing. American auto making companies reigned
worldwide in 2012 as the biggest and most profitable.

Growth

With the invention of the automobile and the mass production techniques of Henry Ford,
the American economy has been transformed by this key element in its prosperity. Tens of

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thousands of jobs were created as the industry grew. Workers were required for the assembly
lines on which they were constructed. Part by part, Ford's model Ts became the first most
popular, affordable, mass produced cars.
The steel industry and machine tool makers also flourished as the automotive industry
required ever-increasing supplies and components for the engines, chassis and other metal
fixtures of the cars. Entirely new businesses, or subsidiaries of existing business, were created
to meet the needs of the automobile industry as it grew incrementally year after year.
Other unexpected economic effects rippled outward into numerous additional industries as more
people bought and operated automobiles and eventually became an essential mode of
transportation and commerce.
Creation

Cars required insurance coverage, which accounted for hundreds of millions

in revenue for insurance companies. Nationwide advertising campaigns for cars added millions
to ad agencies and print and broadcast media. The maintenance and repair of cars became a
major business. One of the biggest winners of all was the petroleum industry which sold
gasoline for the ever-expanding numbers of cars on the road.
In the immediate years after World War II, pent up demand for new cars gave the
industry a boost in profits. Under the Eisenhower administration in the early 1950s, a national
network of interstate highways was built. When the system was completed, a driver could cross
the country on the four-lane roads from New York to Los Angeles without encountering a
single red light.

The Early Years

In 1895 there were only four cars officially registered in the U.S. Little more than 20
years later in 1916, 3,376,889 were registered. Numerous entrepreneurs and inventors went into
the auto-making business to meet an ever-growing demand for the vehicle.
The names of these early automakers – some of which survived for many decades, and a
few are still operating today – are near-legendary: GM, Ford, Olds Motor Company, Cadillac,
Chevrolet, Pierce Arrow, Oakland Motor Car and the Stanley Steamer, to cite just a few. Many
of these firms were located in the Detroit area, and there the Big Three remain to this day.
Among the more notable early automakers was The Ford Motor Company, which is still
in business and flourishing again in 2012 after the difficult recession of 2007-
2008. Although Henry Ford is often mistakenly thought to be the inventor of the automobile --
he was not - he was nevertheless a great innovator. His goal, as he was quoted as saying, was to
"...build a motor car for the great multitude." To achieve this end, he deliberately reduced his
company's profit margins to achieve greater unit sales.

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 In 1909, a Ford cost $825 and the company sold 10,000 of them that first year. Soon, the
automobile became a necessity rather than a luxury item, as it was first positioned in industry
marketing and advertising. In less than 20 years, from 1909 to 1927, Ford built more than 15
million cars.

The Depression Years

Although a record number of cars were sold in 1929 - the year of the stock market crash
in October which ushered in the Great Depression - car sales decreased substantially during
those years. The U.S. economy, suffering in general, was especially hard hit by the decline in
the automobile industry. Jobs were lost in the industry itself, and in many of the ancillary
businesses associated with automotive manufacturing.
Nevertheless, the automotive industry continued to offer innovative features and
designs. Chrysler and DeSoto made cars with new, aerodynamic streamlining. By 1934, despite
hard economic times, some 40% of American families owned cars. In 1938, GM launched a line
of cars with Hydra-Matic, a partially automatic gear shifting feature.

Post World War II

The major automakers converted their production facilities to war-time vehicles – Jeeps,
tanks, trucks and armored cars. During the war, only 139 passenger vehicles for civilian use
were made in the U.S. When the war ended in 1945, pent-up consumer demand for new cars
created a new boom in the industry and profits hit new highs. By 1948, the American auto

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industry rolled out its 100 millionth car, and Buick introduced its Dynaflow automatic
transmission. More innovations followed, including power steering, disk breaking and power
windows.
Foreign-made, fuel-efficient cars gained a stronger foothold in the American market
during and after the 1973 oil embargo and corresponding rise in gas prices in the wake of the
Arab-Israeli war. American firms Ford, GM and Chrysler responded by manufacturing new
lines of smaller, more fuel-efficient cars.
In the ensuing years, Honda opened a U.S. factory, Toyota introduced the luxury Lexus
and GM launched the Saturn, a new brand, and some American firms bought stakes in foreign
companies to exploit the growing overseas markets.
By the turn of the century, the U.S. was still the world's top automaker, but in less than a
decade it would suffer a major decline as a devastating recession set in.
Although Ford celebrated the 100th anniversary of its Model T in 2008, there was no
cause for GM to celebrate. Chrysler was also hit with losses, and along with GM, both of which
declared bankruptcy.
In early 2012, the U.S. economy showed signs of a modest recovery. Miraculously, also
in 2012, like a phoenix rising from its own ashes, the U.S. automobile industry seemed to be
recovering from its financial woes. GM posted a net profit of $7.6 billion.

The Bottom Line

There were almost 250 million cars, trucks and SUVs on American roads in 2012. About
25 years would be required to replace all of them, given the current rate of yearly automobile
sales. So, even though the American auto industry is the world's most profitable in 2012,
some analysts were still only moderately optimistic about its future.
If the U.S. economy continues it's apparent, although slow and as yet not too vigorous
recovery, auto sales are likely to improve as well. Americans love and need their motor vehicles
- for work, business and pleasure - and the American auto-making industry will prosper as the
nation prospers. But it may take a while.

Automotive industry

The history of the automobile industry, though brief compared with that of many other
industries, has exceptional interest because of its effects on history from the 20th century.
Although the automobile originated in Europe in the late 19th century, the United
States completely dominated the world industry for the first half of the 20th century through the
invention of mass production techniques. In the second half of the century the situation altered
sharply as western European countries and Japan became major producers and exporters.

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 Mass production

The outstanding contribution of the automotive industry to technological advance was the
introduction of full-scale mass production, a process combining precision, standardization,
interchangeability, synchronization, and continuity. Mass production was an
American innovation. The United States, with its large population, high standard of living, and
long distances, was the natural birthplace of the technique, which had been partly explored in the
19th century.

Ford and the assembly line

Ford Model Ts Henry Ford

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 The mass-produced automobile is generally and correctly attributed to Henry Ford, but he
was not alone in seeing the possibilities in a mass market. Ransom E. Olds made the first major
bid for the mass market with a famous curved-dash Oldsmobile buggy in 1901. Although the
first Oldsmobile was a popular car, it was too lightly built to withstand rough usage. The same
defect applied to Olds’s imitators. Ford, more successful in realizing his dream of “a car for the
great multitude,” designed his car first and then considered the problem of producing it cheaply.
The car was the so-called Model T, the best-known motor vehicle in history. It was built to be
durable for service on the rough American country roads of that period, economical to operate,
and easy to maintain and repair. It was first put on the market in 1908, and more than 15 million
were built before it was discontinued in 1927.
When the design of the Model T proved successful, Ford and his associates turned to the
problem of producing the car in large volume and at a low unit cost. The solution was found in
the moving assembly line, a method first tested in assembling magnetos. After more
experimentation, in 1913 the Ford Motor Company displayed to the world the complete
assembly-line mass production of motor vehicles. The technique consisted of two basic
elements: a conveyor system and the limitation of each worker to a single repetitive task. Despite
its deceptive simplicity, the technique required elaborate planning and synchronization.
The first Ford assembly line permitted only very minor variations in the basic model, a
limitation that was compensated for by the low cost. The price of the Model T touring car
dropped from $950 in 1909 to $360 in 1916 and still lower to an incredible $290 in 1926. By that
time Ford was producing half of all the motor vehicles in the world.

Spread of mass production

Ford’s success inspired imitation and competition, but his primacy remained
unchallenged until he lost it in the mid-1920s by refusing to recognize that the Model T had
become outmoded. More luxurious and better-styled cars appeared at prices not much higher
than that of the Model T, and these were increasingly available to low-income purchasers
through a growing used-car market. In Britain, William R. Morris (later Lord Nuffield)
undertook to emulate Ford as early as 1912, but he found British engineering firms reluctant to
commit themselves to the large-scale manufacture of automotive parts. Morris in fact turned to
the United States for his parts, but these early efforts were cut short by World War I. In the
1920s Morris resumed the production of low-priced cars, along with his British
competitor Herbert Austin and André-Gustave Citroën and Louis Renault in France.

Large-scale organization

Although the appearance of mass production in the automotive industry coincided with

the emergence of large-scale business organization, the two had originated independently. They
were related, however, and influenced each other as the industry expanded. Only a large firm
could make the heavy investment in plant and tooling that the assembly line required, and Ford
was already the largest single American producer when it introduced the technique. The mass
producer in turn enjoyed a cost advantage that tended to make it increasingly difficult for smaller
competitors to survive. There have been exceptions, but the trend has been consistent.

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 General Motors

William C. Durant

General Motors Corporation (GM), which ultimately became the world’s largest
automotive firm and the largest privately owned manufacturing enterprise in the world, was
founded in 1908 by William C. Durant, a carriage manufacturer of Flint, Michigan. In 1904 he
assumed control of the ailing Buick Motor Company and made it one of the principal American
producers. Durant developed the idea for a combination that would produce a variety of models
and control its own parts producers.

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 As initially formed, General Motors included four major vehicle manufacturers—Buick,
Cadillac, Oldsmobile, and Oakland—and an assortment of smaller firms. The combine ran into
financial trouble in 1910 and was reorganized by a financial syndicate. A similar combination,
the United States Motor Corporation, was formed in 1910, collapsed in 1912, and was
reorganized as the Maxwell Motor Company. General Motors survived. A new reorganization
took place after Durant, with backing by E.I. du Pont de Nemours and Company, regained
control in 1916. Durant, who had previously established the Chevrolet Motor Company, brought
Chevrolet into GM in 1918.

Rise of the Big Three

At the end of World War I, Ford was the colossus, dominating the automotive scene with
the Model T not only in the United States but also through branch plants throughout the world.
British Ford was the largest single producer in the United Kingdom. GM was emerging as a
potential major competitor in the United States. No other automotive firms of comparable size
existed.
During the next decade there was a striking transformation. The depression of 1921 had
far-reaching effects on the American automotive industry. GM was plunged into another
financial crisis. Alfred P. Sloan became president of the corporation in 1923 and raised it to its
unchallenged first place in the industry. Among other steps, he gave GM a staff-and-line
organization with autonomous manufacturing divisions, which facilitated management of a large
corporate structure and became the model for other major automotive combinations. Henry Ford
also went through a crisis because the 1921 crash caught him involved in the construction of a
large new plant (River Rouge) and in the process of buying out his stockholders. Ford weathered
the storm (though many of his dealers, unable to sell cars and not permitted to return them, went
out of business), but the Ford Motor Company had reached its crest.

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 Walter P. Chrysler

The third member of the “Big Three” automotive manufacturers in the United States was
created at this same time. When the Maxwell Motor Company failed in the 1921
depression, Walter P. Chrysler, formerly of General Motors, was called in to reorganize it. It
became the Chrysler Corporation in 1925 and grew to major proportions with the acquisition of
the Dodge Brothers company in 1928. When Ford went out of production in 1927 to switch from
the Model T to the Model A (a process that took 18 months), Chrysler was able to break into the
low-priced-car market with the Plymouth.

The independents

By 1929 the Big Three supplied three-fourths of the American market for motor vehicles;
most of the remainder was divided among the five largest independents—Hudson, Nash,
Packard, Studebaker, and Willys-Overland. In less than 10 years the number of automobile
manufacturers in the United States dropped from 108 to 44. Some of the minor carmakers had
technological or personal interests, including Nordyke and Marmon, makers of Marmon luxury
cars, and E.L. Cord, who marketed front-wheel-drive cars between 1929 and 1937. The
depression years of the 1930s eliminated all but the largest independent manufacturers and
increased still further the domination of the Big Three. Motor vehicle production declined from a
peak of more than five million in 1929 to a low of just over one million in 1932. It rose again
slowly but had not returned to the 1929 figure when World War II broke out.

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 While these years were difficult economically, they saw some significant developments
within the industry. Greater emphasis was placed on style in passenger-car design, with the
general trend in the direction of incorporating the body, bumpers, and mudguards into a single
pattern of smoothly flowing lines. A number of technical features came into general use: the V-
8 engine, introduced by Ford in 1932; three-point engine suspension; freewheeling (permitting
the car to coast freely when the accelerator was released); overdrive (a fourth forward speed);
and, on a limited scale, automatic transmission.

The automotive industry after 1945

After World War II there was a striking expansion of motor vehicle production. During a
35-year period the total world output increased almost 10-fold. The most significant feature of
this increase was that most of it occurred outside the United States. Although American
production continued to grow, its share of world automotive production fell from about 80
percent of the total to 20 percent. Among individual countries the United States was the leading
producer until the recession of the early 1980s. The United States regained the lead in vehicle
production in 1994, since by that time Japanese manufacturers were building more of their
products in factories in their major overseas markets, such as the United States, in response to
economic and political pressures in those markets.

The industry in the United States

At the end of World War II the American automobile industry had intact facilities,

somewhat enlarged by construction for military needs. There was also a great demand for
automobiles. This situation invited several attempts by newcomers to enter the industry, but all
proved unsuccessful. The most promising, Kaiser-Frazer Corporation, lasted some 10 years but
lacked the financial, technical, and sales resources to compete when the automobile market
returned to normal. By the mid 1950s Kaiser-Frazer had stopped producing everything but
Willys Jeeps, an operation that it had acquired by buying Willys-Overland. The manufacture of
Jeeps continued as a subsidiary of Kaiser Industries until 1970, when the division was sold
to American Motors Corporation (AMC) in a transaction that gave Kaiser financial interest in
AMC.

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 American Motors Corporation: Rambler
By the early 1980s the automotive industry in the United States was concentrated in four
major firms—GM, Ford, Chrysler, and AMC—and one important manufacturer of commercial
vehicles, International Harvester Company. A few producers of specialized vehicles remained,
along with an assortment of companies that made automotive parts and components.

The modern industry

The modern automotive industry is huge. In the United States it is the largest

single manufacturing enterprise in terms of total value of products, value added by manufacture,
and number of wage earners employed. One of every six American businesses is dependent on
the manufacture, distribution, servicing, or use of motor vehicles; sales and receipts of
automotive firms represent more than one-fifth of the country’s wholesale business and more
than one-fourth of its retail trade.

Consolidation

The trend toward consolidation in the industry has already been traced. In each of the
major producing countries the output of motor vehicles is in the hands of a few very large firms,
and small independent producers have virtually disappeared. The fundamental cause of this trend
is mass production, which requires a heavy investment in equipment and tooling and is
therefore feasible only for a large organization. Once the technique is instituted, the resulting
economies of scale give the large firm a commanding advantage, provided of course that the
market can absorb the number of vehicles that must be built to justify the investment. Although
the precise numbers required are difficult to determine, the best calculations, considering both
the assembly operation and the stamping of body panels, place the optimum output at between
200,000 and 400,000 cars per year for a single plant.
The Ford Motor Company was consciously reorganized on the GM pattern after World
War II; other American automotive firms have similar structures. In addition, the largest
producers decentralize their manufacturing operations by means of regional assembly plants.
These permit the central factory to ship frames and components rather than complete
automobiles to the areas served by the assembly plants, effecting substantial savings
in transportation costs. This system was developed for the Ford company in 1911.

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 Henry Ford

It’s important to know how the American automotive industry has lived until now and
how it will continue. You will be surprised to learn that thanks to Henry Ford the automobile
industry has taken a new turn in the United States and then worldwide but it has also influenced
another area that is related.
When Henry Ford was born on July 30th 1863, the North American continent was
covered with railroad tracks. A few decades later, a change occurred : the United-States rolled
out thousands of kilometers of motorways. It was the civilization of motels, drive-ins, outdoor
cinemas that young people enjoyed to going to, comfortably installed, milk shake in hand, in
their first car. But he also made the facts disappear in the 50s, with the appearance of new
governmental rules in the United States. These new rules applied mainly for fast food chains
which were developing and gradually replaced the user-friendly roadside places. Henry Ford
succeeded not only in breaking production costs, but also, by extension, in making available to
all the freedom that a car offers. He invented a major concept called Fordism.

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 Thanks to the assembly line, Ford reduced the manufacturing time of the Ford Model T
from 12 ½ hours to 93 minutes. In addition, Henry Ford offered generous salaries of $ 5 a day.
Indeed, to sell more cars, it was first necessary that employees could buy them. « If you lower
wages, you reduce the number of your customers by the same amount » Henry Ford said. This
method shocked the industry, driving costs down and bringing our world into an era of mass
production and consumption.
But, a few years later, the American auto industry suffered a decline. The three major car
manufacturers: Ford, General Motor and Chrysler, saw their market share decrease in favor of
Japanese brands. But American companies still did not think they were totally lost until the
Japanese established companies on the American continent. The Americans had to react with
vigor and common sense.
Hence, significant progress has been made on American products : international technical
standards, greater reliability, more attractive style. In addition, mergings (for example : General
Motors / Toyota, Chrysler / Mitsubishi) also made it possible to understand Japanese methods.

The American auto industry is like a person coming out from a long illness. It lost a few
pounds, but for it own good, and, above all, it took advantage of her convalescence to think

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about the future. « To fail is to have the opportunity to start again in a smarter way » as Ford
once said.
Today, companies diversify their ranges as much as possible to meet the needs of a maximum
number of customers. Added to this is the need for technological development. Indeed, with
sustainable development, industries seek to create vehicles that consume as little fossil fuels as
possible. For this, hybrid and electric cars are created. In addition, sales of these cars are
expected to increase by 3% per year or to reach half of sales by 2023, since these electric cars
meet the majority of Americans who travel an average of less than 40 km per day. But, contrary
to what one might think electric vehicles do not date from yesterday. As early as the 19th
century, this were just another electric trolley built by the Irish inventor Robert Anderson.
Electricity then became the preferred method of the moment for the propulsion of engines.

So it can be said that Henry Ford, hoping to build a profitable automotive company and
finding solutions to gain even more profit, has succeeded in shaking up the economy and
the business around the world, in a large number of fields. Should we thank him for this new
economic turning point? It’s up to you to judge for yourself and to make your own opinion!

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 Food for thought: « An immense amount of knowledge can be acquired simply by
tinkering with things. The way everything is made can not only be learned from books », as
Henry Ford once said.

When Were Cars Invented?

The automobile was first invented and perfected in Germany and France in the late
1800s, though Americans quickly came to dominate the automotive industry in the first half of
the twentieth century. Henry Ford innovated mass-production techniques that became standard,
and Ford, General Motors and Chrysler emerged as the “Big Three” auto companies by the
1920s. Manufacturers funneled their resources to the military during World War II, and
afterward automobile production in Europe and Japan soared to meet growing demand. Once
vital to the expansion of American urban centers, the industry had become a shared global
enterprise with the rise of Japan as the leading automaker by 1980.

Henry Ford and William Durant

Bicycle mechanics J. Frank and Charles Duryea of Springfield, Massachusetts, had

designed the first successful American gasoline automobile in 1893, then won the first American
car race in 1895, and went on to make the first sale of an American-made gasoline car the next
year. Thirty American manufacturers produced 2,500 motor vehicles in 1899, and some 485

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companies entered the business in the next decade. In 1908 Henry Ford introduced the Model
T and William Durant founded General Motors.
The new firms operated in an unprecedented seller’s market for an expensive consumer
goods item. With its vast land area and a hinterland of scattered and isolated settlements, the
United States had a far greater need for automotive transportation than the nations of Europe.
Great demand was ensured, too, by a significantly higher per capita income and more equitable
income distribution than European countries.

Model T

Given the American manufacturing tradition, it was also inevitable that cars would be
produced in larger volume at lower prices than in Europe. The absence of tariff barriers between
the states encouraged sales over a wide geographic area. Cheap raw materials and a chronic
shortage of skilled labor early encouraged the mechanization of industrial processes in the
United States.

This in turn required the standardization of products and resulted in the volume
production of such commodities as firearms, sewing machines, bicycles, and many other items.
In 1913, the United States produced some 485,000 of the world total of 606,124 motor vehicles.
The Ford Motor Company greatly outpaced its competitors in reconciling state-of-the-art
design with moderate price. Cycle and Automobile Trade Journal called the four-cylinder,
fifteen-horsepower, $600 Ford Model N (1906-1907) “the very first instance of a low-cost
motorcar driven by a gas engine having cylinders enough to give the shaft a turning impulse in
each shaft turn which is well built and offered in large numbers.” Deluged with orders, Ford
installed improved production equipment and after 1906 was able to make deliveries of a
hundred cars a day.

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 Encouraged by the success of the Model N, Henry Ford was determined to build an even
better “car for the great multitude.” The four-cylinder, twenty-horsepower Model T, first offered
in October 1908, sold for $825. Its two-speed planetary transmission made it easy to drive, and
features such as its detachable cylinder head made it easy to repair. Its high chassis was designed
to clear the bumps in rural roads. Vanadium steel made the Model T a lighter and tougher car,
and new methods of casting parts (especially block casting of the engine) helped keep the price
down.
Committed to large-volume production of the Model T, Ford innovated modern mass
production techniques at his new Highland Park, Michigan, plant, which opened in 1910
(although he did not introduce the moving assembly line until 1913-1914). The Model T
runabout sold for $575 in 1912, less than the average annual wage in the United States.
By the time the Model T was withdrawn from production in 1927, its price had been
reduced to $290 for the coupe, 15 million units had been sold, and mass personal “automobility”
had become a reality.

GM Introduces ‘Planned Obsolescence’

Market saturation coincided with technological stagnation: In both product and

production technology, innovation was becoming incremental rather than dramatic. The basic
differences that distinguish post-World War II models from the Model T were in place by the
late 1920s—the self-starter, the closed all-steel body, the high-compression engine, hydraulic
brakes, syncromesh transmission and low-pressure balloon tires.
The remaining innovations—the automatic transmission and drop-frame construction—
came in the 1930s. Moreover, with some exceptions, cars were made much the same way in the
early 1950s as they had been in the 1920s.
To meet the challenges of market saturation and technological stagnation, General
Motors under the leadership of Alfred P. Sloan, Jr., in the 1920s and 1930s innovated planned
obsolescence of product and put a new emphasis on styling, exemplified in the largely cosmetic
annual model change—a planned triennial major restyling to coincide with the economics of die
life and with annual minor face-liftings in between.
The goal was to make consumers dissatisfied enough to trade in and presumably up to a
more expensive new model long before the useful life of their present cars had ended. Sloan’s
philosophy was that “the primary object of the corporation … was to make money, not just to
make motorcars.” He believed that it was necessary only that GM’s cars be “equal in design to
the best of our competitors … it was not necessary to lead in design or to run the risk of untried
experiments.”

Legacy of the U.S. Auto Industry

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 The automobile has been a key force for change in twentieth-century America. During
the 1920s the industry became the backbone of a new consumer goods-oriented society. By the
mid-1920s it ranked first in value of product, and in 1982 it provided one out of every six jobs in
the United States.
In the 1920s the automobile became the lifeblood of the petroleum industry, one of the
chief customers of the steel industry, and the biggest consumer of many other industrial products.
The technologies of these ancillary industries, particularly steel and petroleum, were
revolutionized by its demands.
The automobile stimulated participation in outdoor recreation and spurred the growth of
tourism and tourism-related industries, such as service stations, roadside restaurants and motels.
The construction of streets and highways, one of the largest items of government expenditure,
peaked when the Interstate Highway Act of 1956 inaugurated the largest public works program
in history.
The automobile changed the architecture of the typical American dwelling, altered the
conception and composition of the urban neighborhood, and freed homemakers from the narrow
confines of the home. No other historical force has so revolutionized the way Americans work,
live, and play.
In 1980, 87.2 percent of American households owned one or more motor vehicles, 51.5
percent owned more than one, and fully 95 percent of domestic car sales were for replacement.
Americans have become truly auto-dependent.
But though automobile ownership is virtually universal, the motor vehicle no longer acts
as a progressive force for change. New forces—the electronic media, the laser, the computer, and
the robot probably foremost among them—are charting the future. A period of American history
that can appropriately be called the Automobile Age is melding into a new Age of Electronics.

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 References
1. ^ Eckermann, Erik (2001).  World History of the Automobile. SAE Press.
p.  14. ISBN 9780768008005.
2. ^ Setright, L. J. K. (2004).  Drive On!: A Social History of the Motor Car. Granta
Books. ISBN 9781862076983.
3. ^ Wakefield, Ernest H. (1994).  History of the Electric Automobile. Society of Automotive
Engineers. pp. 2–3. ISBN 1-56091-299-5.
4. ^ Greenleaf, William (1951).  Monopoly on Wheels: Henry Ford and the Selden Automobile
Patent. US: Wayne State University Press. ISBN 9780814335123.
5. ^ "American Motorsports Timeline". crucean.com. Retrieved  30 January 2014.
6. ^ "America on the Move; Autocar automobile". Smithsonian Institution – National Museum of
American History. Retrieved  2 January 2016.
7. ^ Flory, J. Kelly Jr. (2008). American Cars, 1946–1959: Every Model, Year by Year.
McFarland. p. 250. ISBN 9780786432295. Retrieved 2 January 2016.
8. The Reader’s Companion to American History. Eric Foner and John A. Garraty, Editors. Copyright ©
1991 by Houghton Mifflin Harcourt Publishing Company.

Further reading
 Berger, Michael L. (2001). The automobile in American history and culture: a reference guide.
Greenwood Publishing Group. ISBN 9780313245589.


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 External links
 History of the automobile on About.com:Inventors site
 Automotive History – An ongoing photographic history of the automobile.
 Taking the Wheel, Manufacturers' catalogs from the first decade of American automobiles
 HISTORY.com
 nvestopedia.com/articles/pf/12/auto-industry
 https://blog.japanesecartrade.com/253-american-automobile-industry/
 https://www.pilotguides.com/articles/american-car-industry/
 https://en.wikipedia.org/wiki/Automotive_industry_in_the_United_States
 https://www.investopedia.com/articles/pf/12/auto-industry.asp
 https://www.theonet.fr/american-car-industry/
 https://www.thehenryford.org/
 https://www.history.com/topics/inventions/automobiles

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