During the first half of the twentieth century, the automotive industry grew rapidly in the United States and Japan. The “Big Three” auto manufacturers – Ford, General Motors, and Chrysler – dominated the industry. They employed mass production techniques that were quickly adopted by other American automobile manufacturers. This revolutionized industrial manufacturing, making automobiles affordable to middle-class families.
The introduction of the Model T by Henry Ford in 1908 marked the beginning of a new era of automotive manufacturing in the United States. The Model T was built on a moving assembly line and was the first gas-powered automobile in the world. The model was a success, gaining momentum in the market and selling millions of units. This model became the foundation of the Ford Motor Company’s success, and other automobile companies followed its lead. The Model T sold for less than the average annual wage in the U.S., and it was affordable to the majority of Americans.
After World War II, the automotive industry exploded in Japan and Europe. The demand for automobiles in the United States increased due to the economic growth and higher per capita income. During this period, the automobile industry grew to be one of the largest industries in the world.
The invention of the internal combustion engine by Dutch scientist Christiaan Huygens in the late 1600s provided the technological basis for the modern automobile. This new form of transportation, which uses gasoline, was quickly adopted by the automobile industry, and gasoline-powered automobiles swept the streets of Europe by 1920.
By the end of the twentieth century, the automobile industry had evolved to become one of the largest and most important industries in the world. Today, 70 million new passenger cars are manufactured worldwide every year. These vehicles are used by more than 1.4 billion people each year. Their designs are based on new technologies and safety legislation. They also incorporate thousands of component parts.
In the United States, the need for automotive transportation was greater than in Europe. While European auto manufacturers did not adopt mass production techniques until the 1930s, the American manufacturing tradition made automobiles affordable to middle-class families. In addition, the cheap raw materials and lack of tariff barriers encouraged sales over a large geographic area. The automobile industry grew in the United States during the late 1800s, and by the early 1900s, there were 485 companies involved in the motor vehicle business.
In 1899, there were 2,500 motor vehicles produced by thirty American automobile manufacturers. By the end of the century, the number of active automobile manufacturers in the United States had fallen to forty-four. These manufacturers had introduced new designs at a rapid pace, and they had been able to split the market into small segments.
The automobile industry rebounded in the United States after World War II. After the economic recession of the mid-1990s, the automobile industry grew again to record levels. In 1996, there were 500,000 vehicles on the road. This number was expected to increase to 915,000 in 2000, but automobile production declined 70 percent in 1998.