Automotive industry - Business in United States of America

Automotive industry: The Beginning of the Industry

Automotive industry: Automobiles Become Mainstream

Automotive industry: After World War II

Definition: Enterprises that design, manufacture, distribute, and market motor vehicles
Significance: Since the early twentieth century, thousands of businesses, large and small, have participated in the manufacture, marketing, and sale of motor vehicles, providing employment for millions of Americans and requiring huge capital investments.

Gasoline-powered vehicles were invented primarily by Europeans during the late nineteenth century, but they were improved and made into the center of a large-scale industry in the United States. Over the years, many domestic companies have tried to manufacture automobiles, but the vast majority failed to earn a profit. In 1900, there was only one car for every ninety-five hundred Americans; ten years later, the ratio was one car per two hundred; by 1930, the ratio had shrunk to one for every five Americans. The history of the industry has always involved numerous interrelated components, including innovations in technology, marketing strategies, and adaptations to changing needs and cultural values. American manufacturers— particularly General Motors (GM), the Ford Motor Company, and Chrysler Motors— maintained global dominance from the early twentieth century until the last two decades of the century, but thereafter Japanese and Korean products grew more successful, at Detroit’s expense.

Further Reading

• Halberstam, David. The Reckoning. New York: Morrow, 1986. A well-written account of how and why the automobile industry experienced relative decline as it struggled to meet the challenge of Japanese competition. 
• Maynard, Micheline. The End of Detroit: How the Big Three Lost Their Grip on the American Car Market. New York: Doubleday, 2004. Argues that the Big Three’s decline since the 1990’s was primarily due to the failure to provide quality and fuel efficiency at reasonable cost. 
• Pelfrey, William. Billy, Alfred, and General Motors: The Story of Two Unique Men, a Legendary Company, and a Remarkable Time in American History. New York: AMACOM, 2006. Compelling and scholarly account of how William Crapo Durant founded the company and how Alfred P. Sloan developed it into one of the most successful enterprises in U.S. history. 
• Rae, John R. The American Automobile Industry. Boston: Twayne, 1984. A succinct general history with many fascinating anecdotes, providing an excellent introduction to the topic.
• Shimokawa, Koichi. The Japanese Automobile Industry: A Business History. London: Athlone Press, 1994. A relatively brief account of the dramatic growth of the Japanese industry after World War II.
• Watts, Steven. People’s Tycoon: Henry Ford and the American Century. New York: Knopf, 2006. Puts forward the thesis that Ford’s great success was shaped by the emergence of consumer capitalism, bureaucracy, mass culture, and the corporate state.

See also: American Automobile Association; Arab oil embargo of 1973; Chrysler bailout of 1979; Drive through businesses; Lee Iacocca; Rubber industry.