The question “When Were Cars Made?” doesn’t have a simple answer. The story of the car is one of gradual evolution, not a sudden invention. While pinpointing an exact date is impossible, we can trace the key milestones and innovations that led to the modern automobile.
The 1901 Mercedes, crafted by Wilhelm Maybach for Daimler Motoren Gesellschaft, is often hailed as the first modern car in many respects. This vehicle was a significant leap forward. Its engine, producing thirty-five horsepower, was remarkably light for its output, weighing only fourteen pounds per horsepower. It could reach a top speed of fifty-three miles per hour, showcasing advanced engineering for its time. By 1909, Daimler’s factory, considered the most integrated in Europe, employed around seventeen hundred workers. Yet, even with this large workforce, production was still under a thousand cars annually, highlighting the early stages of automotive manufacturing.
In stark contrast to the sophisticated Mercedes was Ransom E. Olds’ 1901-1906 Oldsmobile. This car, with its single-cylinder, three-horsepower engine, tiller steering, and distinctive curved dash, was much simpler – essentially a motorized buggy. However, its affordability was a game-changer. Selling for just $650, the Oldsmobile became accessible to middle-class Americans. By 1904, Oldsmobile’s production reached 5,508 units, surpassing all previous car production figures. This demonstrated the potential for mass car ownership, even if the technology was less advanced than European models.
The early 20th century automotive industry faced a crucial challenge: bridging the gap between the advanced engineering of cars like the 1901 Mercedes and the affordability and practicality of the Oldsmobile. The drive to create cars that were both well-designed and reasonably priced became a defining characteristic of the American automotive industry.
The American Pioneers: Ford and Durant
While European innovation set the stage, America quickly became a hub of automotive development and mass production. Bicycle mechanics J. Frank and Charles Duryea from Springfield, Massachusetts, are credited with designing the first successful American gasoline automobile in 1893. They further cemented their place in automotive history by winning the first American car race in 1895. The following year, they made the first recorded sale of an American-made gasoline car.
By 1899, thirty American manufacturers were producing 2,500 motor vehicles. This number exploded in the following decade, with approximately 485 new companies entering the automotive business. 1908 marked a pivotal year with Henry Ford’s introduction of the Model T and William Durant’s creation of General Motors. These events signaled the beginning of mass car production and the rise of major automotive corporations.
The burgeoning automotive industry in America benefited from unique market conditions. The vastness of the United States, with its sprawling territories and isolated communities, created a significant need for personal transportation. This demand was further fueled by higher per capita income and a more equitable income distribution compared to Europe, making car ownership attainable for a larger segment of the population.
Mass Production and the Model T
America’s manufacturing prowess and conditions naturally led to cars being produced at larger volumes and lower prices than in Europe. The absence of trade barriers between states facilitated nationwide sales. Moreover, the availability of cheap raw materials and a persistent shortage of skilled labor encouraged the mechanization of industrial processes in the US. This drive for efficiency led to product standardization and volume production across various industries, including firearms, sewing machines, and bicycles, setting the stage for automotive mass production. By 1913, the United States was producing approximately 485,000 of the 606,124 motor vehicles manufactured globally, demonstrating its dominance in the industry.
Ford Motor Company excelled at combining advanced design with affordability. The Ford Model N (1906-1907), a four-cylinder, fifteen-horsepower car priced at $600, was lauded by the Cycle and Automobile Trade Journal as “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 large numbers.” The Model N was immensely popular, and Ford, overwhelmed with orders, implemented improved production methods, achieving a production rate of a hundred cars per day after 1906.
Building on the success of the Model N, Henry Ford aimed to create an even better and more accessible car – “a car for the great multitude.” The Model T, a four-cylinder, twenty-horsepower vehicle, was introduced in October 1908, priced at $825. It featured a user-friendly two-speed planetary transmission and was designed for easy repair with features like a detachable cylinder head. Its high chassis was ideal for navigating bumpy rural roads. The use of vanadium steel made the Model T lighter and more durable, and innovative casting methods, particularly block casting for the engine, helped keep production costs down.
Ford’s commitment to mass production of the Model T led to groundbreaking innovations in manufacturing. His new Highland Park, Michigan, plant, opened in 1910, became the birthplace of modern mass production techniques, although the moving assembly line was implemented between 1913-1914. By 1912, the Model T runabout was priced at $575, less than the average annual wage in the United States, making car ownership a reality for many.
When production of the Model T ceased in 1927, its price for the coupe model had dropped to $290. An astounding 15 million units had been sold, and personal “automobility” for the masses had become firmly established.
Consolidation and Market Shifts in the Automotive Industry
Ford’s mass production methods were quickly adopted by other American automakers. European manufacturers, however, were slower to adapt, not fully embracing these techniques until the 1930s. The increased capital investment and higher sales volumes required by mass production changed the landscape of the American automotive industry. The era of easy entry for small producers and freewheeling competition began to fade.
The number of active automobile manufacturers in the US plummeted from 253 in 1908 to just 44 by 1929. Ford, General Motors, and Chrysler (formed from Maxwell in 1925 by Walter P. Chrysler) dominated the market, accounting for approximately 80 percent of the industry’s output.
Caption: A parade celebrating General Motors’ 50 millionth car, highlighting the scale of mass production in the automotive industry.
The Great Depression further winnowed the ranks of independent automakers. Nash, Hudson, Studebaker, and Packard managed to survive but ultimately succumbed in the post-World War II era.
The Model T, initially conceived as “a farmer’s car,” was intended to meet the transportation needs of rural America. However, its popularity inevitably declined as the country urbanized and rural roads improved due to the Federal Aid Road Act of 1916 and the Federal Highway Act of 1921.
Furthermore, the Model T remained largely unchanged technologically, becoming outdated over time. Consumers began to desire larger, faster, more comfortable, and more stylish cars. The demand for basic transportation, which the Model T had effectively addressed, was increasingly met by the growing supply of used cars as the market matured.
Market Saturation and Planned Obsolescence
By 1927, the demand for new cars from replacement buyers exceeded the combined demand from first-time owners and those purchasing multiple cars. Given the income levels of the time, automakers could no longer rely on continuous market expansion. Installment sales, introduced by manufacturers of moderately priced cars in 1916 to compete with the Model T, became widespread. By 1925, approximately three-quarters of all new car purchases were financed through credit.
While installment buying had existed for some expensive items before 1920, it was the widespread adoption of credit for automobile purchases in the 1920s that established buying expensive consumer goods on credit as a common middle-class practice and a cornerstone of the American economy.
Market saturation coincided with a slowdown in technological breakthroughs. Innovation in both product design and production technology became incremental rather than revolutionary. The fundamental features that differentiate post-World War II cars from the Model T – such as the self-starter, closed all-steel body, high-compression engine, hydraulic brakes, synchromesh transmission, and low-pressure balloon tires – were already in place by the late 1920s. The automatic transmission and drop-frame construction, significant advancements, emerged in the 1930s. However, with some exceptions, car manufacturing processes remained largely consistent from the 1920s to the early 1950s.
To address market saturation and technological stagnation, General Motors, under the leadership of Alfred P. Sloan, Jr., pioneered planned obsolescence in the 1920s and 1930s. They placed a new emphasis on styling, most notably through annual model changes that were largely cosmetic, along with major restyling every three years to coincide with die life cycles, and minor face-lifts in between.
The aim of planned obsolescence was to create consumer dissatisfaction, encouraging them to trade in their existing cars for newer, more stylish, and presumably more expensive models, long before their current vehicles were worn out. Sloan’s philosophy was clear: “the primary object of the corporation … was to make money, not just to make motorcars.” He believed that GM’s cars only needed to 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.”
This strategic shift led to stylists and cost-cutting accountants gaining influence over engineering. General Motors became the epitome of a rational corporation managed by a technostructure. As Sloanism replaced Fordism as the dominant market strategy, Ford lost its sales leadership in the low-priced car segment to Chevrolet in 1927 and 1928. By 1936, GM held 43 percent of the US market, while Ford’s share had fallen to 22 percent, placing it behind Chrysler’s 25 percent.
Despite the collapse of automobile sales during the Great Depression, Sloan could proudly state that GM “in no year did the corporation fail to earn a profit.” GM maintained its industry leadership until 1986, when Ford surpassed it in profits.
World War II and Post-War Transformation
The automobile industry played a crucial role in both World War I and World War II, producing military vehicles and war materials. During World War II, in addition to manufacturing millions of military vehicles, American automakers produced approximately seventy-five essential military items, many unrelated to motor vehicles, with a total value of $29 billion – a fifth of the nation’s war production.
Civilian vehicle manufacturing ceased in 1942, and rationing of tires and gasoline significantly reduced motor vehicle travel during the war. Cars, many of which had been kept running through the Depression, were further patched up, creating a substantial pent-up demand for new cars at the war’s end.
Detroit’s Big Three automakers took Sloanism to its extreme in the postwar period. Models and options proliferated, and cars became progressively longer, heavier, more powerful, and laden with gadgets, increasing in both purchase and operating costs, driven by the principle that larger cars yielded higher profits.
The Rise of International Competition and Industry Restructuring
Post-war engineering became secondary to questionable aesthetic trends and nonfunctional styling, often at the expense of economy and safety. Quality declined, with American-made cars delivered to buyers in the mid-1960s averaging twenty-four defects per unit, many safety-related. The higher profits from gas-guzzling “road cruisers” came at a societal cost, contributing to increased air pollution and straining dwindling global oil reserves.
The era of annually restyled road cruisers ended with the introduction of federal standards for automotive safety (1966), pollutant emissions (1965 and 1970), and energy consumption (1975), coupled with rising gasoline prices following the oil shocks of 1973 and 1979. The increasing market penetration of the German Volkswagen “Bug” (a modern Model T in its simplicity and efficiency) and then Japanese fuel-efficient, well-built small cars further shifted the landscape.
After reaching a peak of 12.87 million units in 1978, sales of American-made cars fell to 6.95 million in 1982, as imports increased their US market share from 17.7 percent to 27.9 percent. In 1980, Japan surpassed the US to become the world’s leading auto producer, a position it has largely maintained.
In response to these challenges, the American automobile industry underwent a significant restructuring and technological revitalization in the 1980s. Managerial reforms and reductions in plant capacity and personnel at GM, Ford, and Chrysler resulted in leaner, more competitive companies with lower break-even points, enabling them to remain profitable in increasingly saturated and competitive markets.
Manufacturing quality and employee engagement programs became priorities. The industry embarked on an $80 billion, five-year program of plant modernization and retooling in 1980. Functional aerodynamic design replaced superficial styling in Detroit studios, and the annual cosmetic model change was abandoned.
Cars became smaller, more fuel-efficient, less polluting, and safer. Product design and production processes were increasingly rationalized through the integration of computer-aided design, engineering, and manufacturing.
The Enduring Legacy of the Automobile
The automobile has profoundly shaped 20th-century America, becoming a central force for societal change. In the 1920s, the automotive industry became the backbone of a new consumer goods-oriented society. By the mid-1920s, it ranked first in product value, and by 1982, it provided one in six jobs in the United States.
In the 1920s, the automobile became vital to the petroleum industry, a major customer of the steel industry, and the largest consumer of numerous other industrial products. The demands of the automotive industry revolutionized technologies in ancillary sectors, particularly steel and petroleum.
The car facilitated outdoor recreation and spurred the growth of tourism and related industries, such as service stations, roadside restaurants, and motels. Road and highway construction, a significant government expenditure, reached its peak with the Interstate Highway Act of 1956, the largest public works program in history.
The automobile ended rural isolation, bringing urban amenities – notably improved healthcare and education – to rural America. Conversely, the farm tractor contributed to the decline of the traditional family farm. The modern city, with its surrounding industrial and residential suburbs, is largely a product of the automobile and trucking.
The automobile transformed the architecture of the typical American home, reshaped urban neighborhoods, and liberated homemakers from the confines of domesticity. No other historical force has so dramatically revolutionized how Americans work, live, and spend their leisure time.
By 1980, 87.2 percent of American households owned at least one motor vehicle, with 51.5 percent owning more than one, and 95 percent of domestic car sales were for replacement vehicles. Americans had become truly auto-dependent.
However, while car ownership is nearly universal, the automobile is no longer the primary driver of progressive change. New technologies – electronic media, lasers, computers, and robotics – are shaping the future. The Automobile Age, a defining period in American history, is transitioning into a new Age of Electronics.
Source: 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.
