The History of the Automobile Industry

The American automobile industry is one of the most lucrative and successful in the world.  Although its history only spans some 200 years, it is rich with innovation and incredible ideas.  Without the automobile many business would be unable to compete outside of their local market, and travel would be very burdensome.

The automobile industry began in Philadelphia in 1792 when Oliver Evans received a patent for his invention, the Oruktor Amphibolos.  The Oruktor Amphibolos was a steam-land carriage that was used for the dredging of streams and ponds.  Although this was one of the first automatically powered machines, the idea for the automobile had existed since the 13th century when Roger Bacon, an English philosopher, said that, “cars can be made so that without animals they will move with unbelievable speeds.”(Automotive 101, 2000)  This idea was a great one but little did Bacon know that the automobile would become a major industry. 

Little development happened between the 1792 patent of the Oruktor Amphibolos and the late 1800’s.  In 1879 a wave of advancement in the automobile industry started that continues even today.  In 1879 George B. Seldon, an Attorney in Rochester, New York, received a patent for the “Road Machine.”  The road machine had a gasoline-powered engine, and although Seldon came up with the idea for the engine, he never actually produced it.  Seldon made money by collecting royalties from the companies that did produce the engine (Automotive 101, 2000). This advancement was followed by the patent of Henry Fords “Quadricycle.”
 
Henry Ford was born in 1863.  In 1892 he created the Quadricycle, while working as an engineer for the Edison Company.  With his invention he started his own company in 1903, the Ford Motor Company.  Ford revolutionized the industry by coming up with the idea of the assembly line.  In the assembly line each worker was responsible for putting one part, or doing a piece of work on each automobile.  This allowed workers to perfect one area of building, and greatly reduced the production time of automobiles.  He also came up with the idea of standardizing a single model of car.  First he marketed Model-N which sold for $650.00 and was discontinued in 1907.  The Model-T was invented in 1908, and changed the automobile industry forever.  This very basic model was black and had very few added features.  This standardization allowed Henry Ford to make the Model-T quickly, and keep the cost of production very low.  The Model-T became the car of the common man, and started the American bond with the automobile.  Between 1908 and 1928, the year the Model-T was discontinued, fifteen million Model-Ts were sold.  The Model-A was eventually designed to rival other car companies more luxurious models.  Henry Ford created an environment where people liked to work, not to mention that the $5.00 for and eight-hour day was well above average for the time period.  He also had a program of profit sharing, which gave employees a percentage of the total profit the company made in a given year.  Henry Ford left a mark on the automobile history that will never be forgotten (Collier and Horowitz, 1987).
 
In the time right before the Ford Motor Company started producing a great deal of automobiles, Ransom E. Olds developed a one cylinder, three-horse power, curved dash Oldsmobile. The Oldsmobile sold for $650.00, which made it very affordable for the average person in America at this time.  Olds was able to produce 5,508 units of his automobile in 1904, which at the time was a tremendous quantity (Fink, 1988).
 
Steam cars were also extremely popular during this time period; in fact it was estimated that in 1912 there were nearly 35,000 in operation.  The Stanley Steamer was at the forefront of the steam car industry.  The Stanley Steamer was capable of reaching speeds up to 127.6 miles per hour.  Electric powered cars were also available during this time period, but were unpopular because of they were unreliable and a bulky sized of the battery.  Another problem with the battery-powered cars of this time were that they were only capable of going short distances before having to be recharged (Automotive 101, 2000).
 
The hand crank was replaced in most models of cars by 1911; due to the addition of the electric start motor.  Features such as electric headlights and baggage compartments were also introduced to the industry at about the same time.
 
The idea to make a different model every year was one that changed the automobile industry forever.  Alfred Pritchard Sloan, Jr., chairman of General Motors, decided to make more than one model of car.  He thought that if a company could make several different cars that sold for different prices, GM would be able to make more money.  By creating more upscale cars, General Motors appealed to the upper class, but they could stick with Ford’s idea of also having a car for the common person, that could be produced at a low price.  This idea was put into practice in the early 1930’s and paid off for GM, for later down the line they would control the industry. 
 
The automobile industry was booming in the United States, and in 1908 there were 253 automobile manufacturers.  However during 1929 the number of companies in the industry had been reduced to forty-four.  The Ford Motor Company, General Motors, and the Chrysler Corporation accounted for about eighty percent of total sales in the automobile industry.  A great deal of the remaining independents would be wiped out by the Great Depression, leaving companies like Nash, Hudson, Packard, and Studebaker to fold after the second World War (Fink, 1988).
 
In the period between 1930 and 1937 a more luxurious line of cars were being made by almost all car companies.   Twelve and sixteen cylinder cars were being produced. “Independent front suspension, which made the big cars more comfortable, appeared in 1933. Also introduced during the 1930s were stronger, more reliable braking systems, and higher-compression engines, which developed more horsepower.”(Encarta, 2000)
 
One aspect that is constantly over looked is that the automobile industry really helped make other industries.  The automobile industry was the backbone of the petroleum industry in the 1920’s.  Without gasoline and oil which the petroleum industry produced automobile would not be able to run.  This industry would provide the driving force behind automobiles for years to come.  The automobile industry was also the chief consumer of the steel industry during that same time period.  During times of petroleum conservation people tried to find other ways to cut the use of petroleum so it would not effect their car usage. Will Rogers was quoted for saying, “Americans would be the first to go to the poor house in automobile.”  This quote showed the loyalty of Americans to their cars.
 
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 manufactures 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 we 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.