Henry Ford introduced innovative mass production methods that became standard, and by 1920 Ford, General Motors and Chrysler had become the Big Three automobile companies.
Manufacturers directed their resources to the military during World War II, and subsequently, vehicle production in Europe and Japan increased sharply to meet growing demand. Once upon a time, the automotive industry began to acquire vital importance for the expansion of American urban centers. The American auto industry has given the world many technical solutions. Today, large concerns continue to introduce technologies to improve their models.
Although the car was supposed to have the greatest social and economic impact in the United States, it was originally perfected in Germany and France by the end of the nineteenth century by people like Gottlieb Daimler, Karl Benz, Nikolaus Otto and Emil Levassor.
The appearance of the first production models
The 1901 Mercedes, designed by Wilhelm Maybach for the Daimler Motoren Gesellschaft, is commendable for being the first modern car.
Its thirty-five horsepower engine weighed just 6.4 kg per horsepower, and it reached a top speed of 85 km / h. In 1909, with the creation of the most integrated automobile plant in Europe, Daimler hired about 1.7 thousand workers to produce less than a thousand cars a year. It was a breakthrough in Europe that expanded the scope of the use of new technologies. Later, the American auto industry will borrow and refine these ideas. After 30 years, it is Western companies that will become leaders.
Nothing illustrates the superiority of European design better than the sharp contrast between this first Mercedes model and the single-cylinder, curved, steering wheel of the Oldsmobile Ransom E. Olds 1901-1906, which was just a motorized wagon. Olds were sold for only $ 650, which allowed middle-class Americans to buy them, and the Olds issue in 1904, which amounted to 5,508 units, surpassed all previously produced cars.
A central issue in automotive technology during the first decade of the 20th century would be matching the improved design of the 1901 Mercedes with the reasonable price and low maintenance of Olds.
Henry Ford and William Durant
Cyclist J. Frank and Charles Durya of Springfield, Massachusetts, developed the first successful U.S. gasoline car in 1893, then won the first U.S. automobile race in 1895 and began their first sale of an U.S. gasoline car the following year.
Thirty American manufacturers produced 2,500 cars in 1899, and about 485 companies entered the business in the next decade. In 1908, Henry Ford introduced the Model T, and William Durant founded General Motors.
The American auto industry worked in the market of expensive consumer goods. With its vast land area and the interior of scattered and isolated settlements, the United States experienced a much greater need for technology than the countries of Europe. High demand was also provided by a significantly higher per capita income and a fairer distribution of income than in European countries.
Model T
Given the traditions of the American automobile industry, it was also inevitable that transport would be carried out in larger volumes at lower prices than in Europe. The lack of inter-state tariff barriers has spurred sales across a wide geographic region. Cheap raw materials and a chronic shortage of skilled labor early contributed to the mechanization of manufacturing processes in the United States.
This, in turn, required the standardization of products and led to the mass production of goods such as firearms, sewing machines, bicycles and many other items. In 1913, the United States produced about 485 of the 606 thousand cars in the world.
Ford Motor Company is far ahead of its competitors in matching modern design with reasonable price. Upon receiving orders, Ford installed improved production equipment and, after 1906, was able to deliver one hundred cars a day. New methods and principles of transport business appeared. Henry Ford's car attracted customers. This allowed us to optimize sales.
Encouraged by the success of Model T, Henry Ford was determined to create the best car for a huge number of people. A four-cylinder T model with twenty horsepower, first proposed in October 1908, was sold for $ 825.
Aiming for large-scale production of the Model T, Ford introduced state-of-the-art mass production technology at its new factory in Highland Park, Michigan, which opened in 1910. In 1912, Model T was sold for $ 575, less than the average annual salary in the United States.
By the time the Model T, as a symbol of the American auto industry, was discontinued in 1927, its price was reduced to $ 290. 15 million units were sold, and having one family of two or more vehicles became a reality. Later, the market increased several times.
Industry growth
Ford's mass production methods were quickly adopted by other American car manufacturers. European businessmen did not use them until the 1930s. The number of active car manufacturers fell from 253 in 1908 to only 44 in 1929, with Ford, General Motors and Chrysler accounting for about 80% of the industry.
Demand for basic transportation, which was met by Model T, increased in the 1920s.
Sales booth
By 1927, the need to replace new cars exceeded demand from the new owners and buyers of several cars combined. Given daily earnings, companies could no longer count on market expansion. Installment sales were initiated by the American auto industry at moderate prices in 1916 to compete with Model T, and by 1925 about 30% of all new cars were bought on credit. There were many offers from private credit organizations.
Although several types of expensive goods, such as pianos and sewing machines, were sold before 1920, it was the sale of installment cars during the twenties that determined the purchase of expensive consumer items on credit as a middle-class habit and a pillar of the American economy.
Business combination
Market saturation coincided with technological stagnation in both products and production technologies. The main differences between the models after the Second World War and the T model are: autostart, fully enclosed steel case, engine with a high compression ratio, hydraulic brakes, synchronized transmission, low pressure and balloon tires.
Other innovations - automatic transmission and design with a lowering frame appeared in the 1930s. Moreover, with a few exceptions, cars were produced in the early 1950s almost in the same way as in the 1920s.
To cope with market saturation and technological stagnation, General Motors, under the leadership of Alfred P. Sloan Jr., introduced the planned obsolescence of the product in the 1930s and placed a new emphasis on modeling. Thus, engineering was subordinate to the dictates of stylists and accountants. General Motors has become a model of a rational corporation driven by a technostructure.
The impact of war
The Big Detroit troika, including Chrysler Group LLC, General Motors and the Ford Motor Company, played a decisive role in the production of military vehicles and military equipment during the First World War. During the Second World War, in addition to producing several million military vehicles, American equipment manufacturers created about seventy-five basic military items, most of which were not related to the car. These materials had a total value of $ 29 billion, representing one fifth of national production.
Since the production of vehicles for the civilian market ceased in 1942, and tires and gasoline were strictly standardized, the number of trips by car during the war years fell sharply. After the war, models and options expanded, and every year the cars became longer and heavier, more powerful, more expensive to buy and operate. It was believed that large cars are more profitable to sell than small ones.
Rise of Japanese manufacturers
Later, quality deteriorated to such an extent that by the mid-1960s, the classics of the American automobile industry were supplied to retail customers with 20 defects per model, many of which were related to safety. Many disgruntled citizens appeared. Moreover, the high profits Detroit earned from gas-absorbing assets came at the expense of social costs associated with increased air pollution and the depletion of global oil reserves.
The era of the annual restyled road cruiser ended with the introduction of federal automotive safety standards (1966), pollutant emissions (1965 and 1970) and energy consumption (1975). The empire of US manufacturers began to crumble with rising gas prices after the oil shocks of 1973 and 1979, and especially with growing penetration into the US and world markets, first by the German Volkswagen Bug and then by the Japanese economical, functionally designed, well-assembled small cars.
After reaching a record 12.87 million units in 1978, sales of US-made cars fell to 6.95 million in 1982, as imports increased their US market share from 17.7 to 27.9%. In 1980, Japan became the world's leading automaker, and it continues to hold this position. However, concerns do not extend their influence to all market segments.
US manufacturers
The history of the American auto industry is being written today. Basically, it includes events related to innovation and competition with the East. The American automobile industry in the 1980s underwent large-scale organizational restructuring and technological revival. Revolutions in the management and reduction of production capacities and personnel of GM, Ford and Chrysler have led companies to become more flexible and rigid with lower break-even points, which allowed them to profit with lower volumes in increasingly saturated competitive markets.
Production quality and employee motivation and involvement programs were a priority. Industry in 1980 implemented a five-year program of modernization and technical re-equipment of the plant worth $ 80 billion.
US legacy
Legends of the American auto industry were a key force for change in the 20th century. During the 1920s, the industry became the foundation of a new consumer-oriented society. By the mid-1920s, it was number one in terms of product value, 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 oil industry, one of the main consumers of the steel industry and the largest consumer of many other industrial goods.
The car stimulated participation in outdoor activities and contributed to the growth of tourism and tourism-related industries such as service stations, roadside restaurants and motels. The construction of streets and motorways, which is one of the largest items of government spending, reached its peak when, in accordance with the 1956 law on interstate motorways, the largest public works program was introduced.
The car completed rural isolation and brought urban amenities - the best medical care and schools to rural America. A modern city with adjacent industrial and residential suburbs is a product of road transport.
Transport has changed the architecture of a typical American home, the concept and composition of urban neighborhoods, and freed many from the narrow boundaries of the house.
In 1980, 87.2% of American families owned one or more cars, and 95% of domestic car sales were replaced. The Americans have become truly independent.
1990s: resources and dimensions
Over the course of this decade, Sport Utility Vehicles (SUVs) have become incredibly popular. Stable gas prices since the 1980s have made consumers worry less about the use of resources for these larger four-wheel drive vehicles. While customers were not overly concerned about environmental issues, governments were perplexed by this.
The activity of states like California has made cars more environmentally friendly. This has contributed to significant technological advances, such as increased production of electric battery powered vehicles. In the late 1990s, the first hybrid cars with a small gas and electric engine were produced.
2000s: cars get smaller and more efficient
By 2005, 80 countries accounted for 80% of world production, which means expanding the playing field and significantly increasing global competition. During the first few years of the new millennium, automobile companies served consumers who were expecting powerful cars.
The SUV cost a lot, and it was easy for consumers to get a loan to buy one of these expensive cars. However, in 2008, a severe economic downturn prompted banks to tighten funding requirements. Fewer people could afford to buy an expensive car. At the same time, fuel has become more expensive. In the summer of 2008, record fuel prices drove many consumers to sell their larger vehicles and buy smaller, more efficient cars. Hybrids are now filling the roads.
Modern history and the advent of innovation
Since 2010, the automotive industry has been recovering rapidly from past losses. In 2013, the industry experienced its best year when sales and jobs increased every year. Drivers now have more options for choosing vehicle types and extra luxuries than ever before.
Economy cars are popular and the first vehicles with unmanned technology appear. One of the innovators of this idea and its development was Ilon Musk. In 2016, nearly half of people aged 25 to 34 said they would use fully autonomous vehicles because they thought it was safer than traditional.
Adapting to customer needs
Throughout history, the automotive industry has demonstrated remarkable ability to adapt to changing times. Although manufacturers have come and gone over the past century, the industry has focused on creating technology that meets customer needs. The head of Tesla, Elon Musk, who created an unmanned all-electric vehicle, is one of the engines of this development.