5/16/24, 10:23 PM Automobile History

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Automobile History
BY: HISTORY.COM EDITORS
UPDATED: AUGUST 21, 2018 | ORIGINAL: APRIL 26, 2010

Table of Contents

1. When Were Cars Invented?

2. Henry Ford and William Durant

3. Model T

4. Automotive Industry Growing Pains

5. Car Sales Stall

6. GM Introduces ‘Planned Obsolescence’

7. World War II and the Auto Industry

8. Rise of Japanese Automakers

9. U.S. Carmakers Retool

10. Legacy of the U.S. Auto Industry

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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.

Although the automobile was to have its greatest social and economic
impact in the United States, it was initially perfected in Germany and
France toward the end of the nineteenth century by such men as
Gottlieb Daimler, Karl Benz, Nicolaus Otto and Emile Levassor.

When Were Cars Invented?

The 1901 Mercedes, designed by Wilhelm Maybach for Daimler Motoren
Gesellschaft, deserves credit for being the first modern motorcar in all essentials.

Its thirty-five-horsepower engine weighed only fourteen pounds per horsepower,

and it achieved a top speed of fifty-three miles per hour. By 1909, with the most
integrated automobile factory in Europe, Daimler employed some seventeen
hundred workers to produce fewer than a thousand cars per year.

Nothing illustrates the superiority of European design better than the sharp
contrast between this first Mercedes model and Ransom E. Olds‘ 1901-1906 one-
cylinder, three-horsepower, tiller-steered, curved-dash Oldsmobile, which was
merely a motorized horse buggy. But the Olds sold for only $650, putting it within
reach of middle-class Americans, and the 1904 Olds output of 5,508 units
surpassed any car production previously accomplished.

The central problem of automotive technology over the first decade of the
twentieth century would be reconciling the advanced design of the 1901 Mercedes

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with the moderate price and low operating expenses of the Olds. This would be
overwhelmingly an American achievement.

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 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

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large numbers.” Deluged with orders, Ford installed improved production

equipment and after 1906 was able to make deliveries of a hundred cars a day.

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.

Automotive Industry Growing Pains

Ford’s mass production techniques were quickly adopted by other American
automobile manufacturers. (European automakers did not begin to use them until
the 1930s.) The heavier outlays of capital and larger volume of sales that this
necessitated ended the era of easy entry and free-wheeling competition among
many small producers in the American industry.

The number of active automobile manufacturers dropped from 253 in 1908 to only
44 in 1929, with about 80 percent of the industry’s output accounted for by Ford,
General Motors, and Chrysler, formed from Maxwell in 1925 by Walter P. Chrysler.

Most of the remaining independents were wiped out in the Great Depression, with
Nash, Hudson, Studebaker, and Packard hanging on only to collapse in the post-
World War II period.

The Model T was intended to be “a farmer’s car” that served the transportation
needs of a nation of farmers. Its popularity was bound to wane as the country

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urbanized and as rural regions got out of the mud with passage of the 1916 Federal
Aid Road Act and the 1921 Federal Highway Act.

Moreover, the Model T remained basically unchanged long after it was

technologically obsolete. Model T owners began to trade up to larger, faster,
smoother riding, more stylish cars. The demand for basic transportation the Model
T had met tended increasingly in the 1920s to be filled from the backlog of used
cars piling up in dealers’ lots as the market became saturated.

Car Sales Stall

By 1927 replacement demand for new cars was exceeding demand from first-time
owners and multiple-car purchasers combined. Given the incomes of the day,
automakers could no longer count on an expanding market. Installment sales had
been initiated by the makers of moderately priced cars in 1916 to compete with the
Model T, and by 1925 about three-quarters of all new cars were bought “on time”
through credit.

Although a few expensive items, such as pianos and sewing machines, had been
sold on time before 1920, it was installment sales of automobiles during the
twenties that established the purchasing of expensive consumer goods on credit as
a middle-class habit and a mainstay of the American economy.

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

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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.”

Thus engineering was subordinated to the dictates of stylists and cost-cutting

accountants. General Motors became the archetype of a rational corporation run
by a technostructure.

As Sloanism replaced Fordism as the predominant market strategy in the industry,

Ford lost the sales lead in the lucrative low-priced field to Chevrolet in 1927 and
1928. By 1936 GM claimed 43 percent of the U.S. market; Ford with 22 percent had
fallen to third place behind Chrysler with 25 percent.

Although automobile sales collapsed during the Great Depression, Sloan could
boast of GM that “in no year did the corporation fail to earn a profit.” (GM retained
industry leadership until 1986 when Ford surpassed it in profits.)

World War II and the Auto Industry

The automobile industry had played a critical role in producing military vehicles and
war matériel in the First World War. During World War II, in addition to turning out
several million military vehicles, American automobile manufacturers made some
seventy-five essential military items, most of them unrelated to the motor vehicle.
These materials had a total value of $29 billion, one-fifth of the nation’s war
production.

Because the manufacture of vehicles for the civilian market ceased in 1942 and
tires and gasoline were severely rationed, motor vehicle travel fell dramatically
during the war years. Cars that had been nursed through the Depression long after
they were ready to be junked were patched up further, ensuring great pent-up
demand for new cars at the war’s end.

Detroit’s Big Three carried Sloanism to its illogical conclusion in the postwar period.
Models and options proliferated, and every year cars became longer and heavier,
more powerful, more gadget-bedecked, more expensive to purchase and to
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operate, following the truism that large cars are more profitable to sell than small
ones.

Rise of Japanese Automakers

Engineering in the postwar era was subordinated to the questionable aesthetics of
nonfunctional styling at the expense of economy and safety. And quality
deteriorated to the point that by the mid-1960s American-made cars were being
delivered to retail buyers with an average of twenty-four defects a unit, many of
them safety-related. Moreover, the higher unit profits that Detroit made on gas-
guzzling “road cruisers” were made at the social costs of increased air pollution and
a drain on dwindling world oil reserves.

The era of the annually restyled road cruiser ended with the imposition of federal
standards of automotive safety (1966), emission of pollutants (1965 and 1970), and
energy consumption (1975); with escalating gasoline prices following the oil shocks
of 1973 and 1979; and especially with the mounting penetration of both the U.S.
and world markets first by the German Volkswagen “Bug” (a modern Model T) and
then by Japanese fuel-efficient, functionally designed, well-built small cars.

After peaking at a record 12.87 million units in 1978, sales of American-made cars
fell to 6.95 million in 1982, as imports increased their share of the U.S. market from
17.7 percent to 27.9 percent. In 1980 Japan became the world’s leading auto
producer, a position it continues to hold.

U.S. Carmakers Retool

In response, the American automobile industry in the 1980s underwent a massive
organizational restructuring and technological renaissance. Managerial revolutions
and cutbacks in plant capacity and personnel at GM, Ford and Chrysler resulted in
leaner, tougher firms with lower break-even points, enabling them to maintain
profits with lower volumes in increasingly saturated, competitive markets.

Manufacturing quality and programs of employee motivation and involvement

were given high priority. The industry in 1980 undertook a five-year, $80 billion
program of plant modernization and retooling. Functional aerodynamic design
replaced styling in Detroit studios, as the annual cosmetic change was abandoned.

Cars became smaller, more fuel-efficient, less polluting and much safer. Product
and production were being increasingly rationalized in a process of integrating

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computer-aided design, engineering and manufacturing.

Legacy of the U.S. Auto Industry

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 ended rural isolation and brought urban amenities—most

important, better medical care and schools—to rural America (while paradoxically
the farm tractor made the traditional family farm obsolete). The modern city with
its surrounding industrial and residential suburbs is a product of the automobile
and trucking.

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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The Reader’s Companion to American History. Eric Foner and John A. Garraty, Editors.
Copyright © 1991 by Houghton Mifflin Harcourt Publishing Company. All rights
reserved.

BY: HISTORY.COM EDITORS

HISTORY.com works with a wide range of writers and editors to create accurate and
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HISTORY.com team. Articles with the “HISTORY.com Editors” byline have been written
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Citation Information
Article Title Automobile History

Author History.com Editors

Website Name HISTORY

URL https://www.history.com/topics/inventions/automobiles

Date Accessed May 16, 2024

Publisher A&E Television Networks

Last Updated August 21, 2018

Original Published Date April 26, 2010

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