The American automobile industry is arguably the most significant achievement of the twentieth century. This achievement has shaped American industry, as well as the country’s landscape and culture. Many of the people responsible for the automobile industry came from America’s farms, machine shops, and bicycle and carriage shops.
The Beginning (1890s–1930). The first gasoline-powered automobile was built in 1893 by two brothers who were bicycle mechanics. Their automobile was actually a converted horse carriage with a one-cylinder engine. By 1899, some 30 manufacturers had produced 2,500 automobiles, with this number soaring to 8,000 by year’s end. Fewer than one-third of these automobiles were gasoline powered; most ran on steam or electricity.
In 1901 the first automobile factory opened in Detroit with mass-production techniques. Soon afterward, Henry Ford founded the Ford Motor Company. It wasn’t until 5 years later that the assembly line was created. The United States had 240 automobile manufacturers by 1908 and became the world’s largest producer, with an annual output of 43,000 automobiles, a dominance that would stand for 80 years.
In 1908 Ford introduced the Model T and sold more than 6,000 cars. That number increased to 10,000 the next year. Due to Ford’s solid reputation and the Model T’s low price, the car is considered the first true car for all classes of Americans. By 1912, three-quarters of all cars on the road were Model Ts, and production capacity increased to 300,000 per year.
During the 1920s, Ford’s dominance in sales forced other car companies to start selling cars on credit to stay competitive. By the end of the decade, two-thirds of all automobiles sold were on credit, thus spurring the purchase of other expensive consumer goods on credit. The Model T stopped production in 1927 and the Great Depression started soon afterward. The number of manufacturers dropped from 108 to 44, and production was cut by more than half.
American Domination (1930s–1950).Despite the downturn in the industry, American domination of automobile production continued, with the Japanese industry reporting an annual production of 500 cars. Three car companies emerged as leaders and accounted for 90 percent of all cars produced in the United States. General Motors led with almost half of all production, followed by Chrysler. Ford had fallen to third.
Automotive innovations introduced during the 1930s and 1940s included the first automatic transmission, overdrive, tubeless tires, and disc brakes. The Jeep was also introduced and quickly became the workhorse of the military throughout World War II. The automotive industry virtually stopped with the beginning of a World War. The advances and innovations made through the years were now being directed toward America’s war effort. The car companies used their production capacity and engineering skills to build guns, tanks, airplanes, and a wide assortment of other military equipment needed to help win the war. With the end of the war and the public supply of cars aged and depleted, car companies focused on making cars again, and large-scale production began in the early 1950s.
Increased Competition (1950s–1970).During the early 1950s, American car production surged and accounted for two-thirds of the world’s total. America produced some 8 million cars in contrast to the struggling Japanese industry, which produced 32,000.
Americans’ love affair with the car continued, with one out of every three people owning a car and 15 percent of families having more than one. Bold designs emerged, with design features borrowed from aircraft and ships. Cars began to have large chrome bumpers, distinctive ornaments, tailfins, and portholes. New features included air conditioning, electric windows, adjustable seats, a switch from a 6-volt to the modern 12-volt electrical system, and the first-ever fiberglass body on the 1953 Corvette. Cars had grown in size and weight. Sales increased to an extraordinary 7.2 million nationally, with fewer than 52,000 being imports.
However, by 1960 the bold designs had changed to a boxier shape, and the overwhelming U.S. domination of the world market had ended. American cars accounted for fewer than half of all cars sold. To generate sales, American cars became smaller and lighter, similar to their European counterparts. Cars such as the Mustang and Camaro were introduced. The end of the 1960s saw production rebound to over 11 million, while Japanese production continued to progress.
World Market Realignment (1970s–1980). The 1970s saw world market realignment, with the United States losing ground steadily and global demand for cars increasing. The Clean Air Act was enacted, tightening regulations on auto emissions. The United States faced an oil embargo when prices more than tripled in a short time. American auto companies struggled to produce less-polluting cars with increased fuel efficiency. The slump continued into the late 1970s.
Modern Automobiles (1980s–2000). Japan emerged as the world leader in production and held a 30-percent share of the U.S. market. American production fell to second place for the first time in history.
During the early 1980s, Ford’s annual losses topped 1 billion dollars. American car companies invested in modernizing their plants and redesigning their cars. Investment totaled more than $69 billion in the early 1980s, and cars became aerodynamic and efficient. Computers began to appear in cars, and the dramatically shaped Ford Taurus became America’s best-selling car. The American auto industry stopped its global slide and remained second to the Japanese.
The 21st Century. With an eye toward the future, the American auto industry is focused on alternative fuel technology and clean-burning fuel sources. Ford, GM, and Chrysler are getting a foothold on hybrid technology. In 2004, Ford issued the world’s first SUV hybrid.