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The History of the American Automobile Industry (2)

From www.Gasgoo.com| March 19,2007

The depression had different effects on the various automobile companies. Ford had lost the low cost market to a new company, Chevrolet, in the end of the 1920’s.  Ford’s top rank in the industry fell also.  Their total sales dropped and made up twenty two percent of the total U.S. market; General Motor’s sales soared to make up forty three percent of the U.S. market.  Chrysler was in between Ford and General Motors, with sales totaling twenty five percent of the market.

The start of World War II changed the automobile industry forever.  Companies such as Chrysler stopped the production of their newer line of family cars and started to produce tanks for the war effort.  General Motors shifted their focus to making shells, fuses, bombs, navigational equipment, artillery and anti-aircraft guns.   The Ford Motor Company made a contribution by producing airplanes (Encarta, 2000).  In total the automobile industry made seventy-five essential items for use in the war.  The materials used cost an estimated $29 billion (Fink, 1988).   All of the major automobile companies also made trucks to be used over seas to transport troops and supplies; the Jeep was popularized at this time for its off-road capability.  The total output for the leaders in the automobile industry nearly doubled during this time period.

With the war over, car companies started to produce the 1946 model year automobiles. With suburbs sprouting up, the demand for cars increased greatly.  In 1949 car sales reached 4.8 million nearly one million greater than 1929.  Companies like Ford and Hudson, incorporated the fender into all of their car models.  Sealed beam headlights and automatic transmissions came soon afterwards.  By 1955 sales approached 7.2 million units. (Encarta, 2000)  While sales were booming for the major automobile manufacturers it became increasingly harder for other automobile companies to compete in the industry. 

The 1950’s rapidly changed the automotive industry.  The major automobile manufacturers flourished while the smaller companies met with disaster.  New fins, high compression V-8 engines, and more stylish frames added to some of the new look automobiles. Brighter colors and fake plastic wood became a craze in the early 1950’s in style. On the inside of the car the air conditioning system was added to the 1954 line Ponitacs. It was developed by Harrison Radiator, a division of the General Motors Company (ai-online.com, 2000). This advancement would become a standard feature in automobiles for years to come.  During the 1950’s a great deal of improvement was done in suspension.  This greatly aided the ability of the driver to steer the car and to handle more difficult terrain. 

Another significant contribution made to the history of the automotive industry in the 1950’s was the way cars were produced.  The war taught workers that making parts that ship easily can help the over all production.  Lighter parts were introduced to the automobile.  Large machines were being used on the assembly line to help workers produce more cars in a shorter period of time.

In the 1960’s the United States fell in love with a new type of car, the muscle car.  It was quite different from the family cars and sedans that had been made pervious to that.  Ford’s Mustang was a leader in this new breed.  The Mustang was introduced in 1964.  It was available in a hard top, or convertible.  The car appealed to everyone, and with an excellent job of marketing became a very popular car.  Ford sold 680,989 Mustangs, which far exceeded the projected 100,000 units, it became the most successful launch ever.  The low cost of the Mustang was a key to the launch, the hardtop sold for $2368.00 and the convertible sold for $2614.00.  Other keys to the Mustangs success were the many options given to the buyer.  The Mustang offered three different transmissions, four engines, and six different axles.  This was rare at the time. The Mustang was also the first car to offer five different option group packages (ai-online.com, 2000).

By the 1970’s the automobile lost some of its lust.  The Mustang was kept in production but regular American cars were facing new competition.  Import cars such as Volkswagen were being bought in the United States. In 1973 and 1979, OPEC (Organization of Petroleum Exporting Countries) cut the supply of oil being sent to the United States.  This crisis made foreign cars, with better gas mileage more economical.  In an effort to conserve energy the United States government strictly enforced the Clean Air act of 1970.  American car manufactures struggled to meet the demands of this act.  This opened the door for competition across seas, especially Japan.  The Japanese companies’ profits were soaring.  Honda motor company, a relatively new company helped lead the way.  In the 1970s Japanese companies averaged selling 2.5 million units in the U.S., or one in four cars (Encarta, 2000).

In the end of the 1970’s and 1980’s United States car companies were in a state of distress with the recent foreign market.  The United States automobile companies came up with inventions like electronic fuel injection, turbochargers, catalytic converters, and aerodynamic bodies, to reduce emissions and reduce operation costs (Encarta, 2000).  The foreign companies at the same time were concentrating on a new kind of car.  They were switching from the economical, to the luxury line.  Companies like Honda with its Acura division, Nissan with its Infinity line, and Toyota with its Lexus division led the industry.  These companies rivaled the American car companies and the existing foreign Luxury companies like BMW and Mercedes (Encarta, 2000).

The American car companies would rally back.  They tended to buy other companies or start their own luxury lines.  Ford for example recently purchased Volvo, in addition to owning Aston Martin, Lincoln, Mercury, Mazda, and several other automobile companies.  Chrysler also followed suit with its 1998 acquisition of Daimler-Benz-AG, in addition to its very popular Jeep line.

As the last century closes it is more evident than ever that history repeats itself.  In the first days of automobile production electric cars were some of the first ideas.  Recently a major move has been made to make environmentally safe cars.  Cars with some sort of electric component will no doubt be large part of the next trend in the automobile industry.  It is hard to tell however where the industry will go from there.  It is very possible that a future generation of cars will not use common roads like we do today, but will hover above them.  Or possible just fly like air planes.  It is clear however that throughout history cars have played an important role, and will continue to do so well into the twenty-first century.

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