A Quick Look at The Troubled History of the American Car Industry

The automobile industry in the U.S. began in the 1890s, and due to high demand and economic prosperity, cars quickly became an important product for not just America but the world over. However, this industry has gone through several significant shifts. Specifically, foreign entries into the U.S. market in the 1970s brought news challengers to once dominant Big Three (General Motors, Ford, and Chrysler). To remain competitive, U.S. manufacturing became less America-centric and built factories in countries where labor was less expensive.  

Going back to the 1920s and up until the 1950s, General Motors, Ford, and Chrysler produced nearly three-quarters of all the automobiles in the world by the 1950s. As Japan and Europe ramped up their own production after World War II, those numbers began to shift.

Currently, the automotive industry of the U.S. is in second place for manufacturing with between 8-10 million vehicles produced annually. In the 1970s, production reached 13-15 million annually. Its ultimate low came in 2009 during the American financial crisis that saw production sink to 5.7 million. 

General Motors, founded in the year 1908 by William Durant in Michigan was an instant success, and later acquired other iconic car companies such as Buick and Cadillac. 

Ford, founded by Henry Ford in the year 1903, was originally the first American car manufacturer in the American car industry. However, its main challenger, General Motors, offered more brands and a different approach to engineering cars.

In its early days, Ford only assembled a few cars a day, which were made by a small group of workers. After the introduction of the mass production concept and the release of the Model T in 1908, Ford could supply an efficient and reliable automotive at an affordable rate. Within a decade, nearly half of the cars in America were Model Ts. 

Chrysler was founded in the year 1925 by Walter Chrysler. It was the third-largest of Detroit’s automotive companies and was at its peak during World War II. It was known during those days for its well-engineered cars. Over the years, the company has changed hands, including ownership under Mercedes Benz for a short time, until ultimately ending up under control by Fiat’s parent company in Italy. 

Things took a turn around the 1970s when newcomers Toyota and Japan from Japan, and Volkswagen from Germany, began importing cars to the U.S. These cars came at an important time in the U.S., as gas shortages, environmental regulations, and greater focus on safety allowed foreign automakers to take advantage of their existing small, efficient, and safe cars that suddenly appealed to American consumers.

Currently, the automotive industry in the U.S., is the second biggest manufacturer in the entire world, but due to high competition in the international market and shifts towards electric vehicles, the future of the industry is uncertain.