automobile industry


Also found in: Dictionary, Thesaurus, Financial.

automobile industry,

the business of producing and selling self-powered vehicles, including passenger cars, trucks, farm equipment, and other commercial vehicles. By allowing consumers to commute long distances for work, shopping, and entertainment, the auto industry has encouraged the development of an extensive road system, made possible the growth of suburbs and shopping centers around major cities, and played a key role in the growth of ancillary industries, such as the oil and travel businesses. The auto industry has become one of the largest purchasers of many key industrial products, such as steel. The large number of people the industry employs has made it a key determinant of economic growth.

Industry History

Although ancient Chinese writers described steam-powered vehicles, and both steam- and electric-powered cars competed with gas-powered vehicles in the late 19th cent. Frenchman Jean Joseph Étienne developed the first practical internal-combustion engine (1860), and later in the decade several inventors, most notably Karl Benz and Gottlieb Daimler, produced gas-powered vehicles that ultimately dominated the industry because they were lighter and less expensive to build. French companies set the design of the modern auto by placing the engine over the front axle in the 1890s and U.S. manufacturers made important advances in the mass production of the auto by introducing cars with interchangeable machine-produced parts (one such car was created by Ransom E. Olds in 1901).

In 1914 Henry FordFord, Henry,
1863–1947, American industrialist, pioneer automobile manufacturer, b. Dearborn, Mich. The Inception of the Ford Motor Company

Ford showed mechanical aptitude at an early age and left (1879) his father's farm to work as an apprentice in a Detroit
..... Click the link for more information.
 began to mass produce cars using assembly lines. In addition, his practice of providing loans to consumers to buy cars (1915) made the Model T affordable to the middle class. In the 1920s, General Motors further changed the industry by emphasizing car design. The company introduced new models each year, marketed different lines of cars to different income brackets (the Cadillac for the rich; the Chevrolet for the masses), and created a modern decentralized system of management. U.S. auto sales grew from 4,100 in 1900 to 895,900 in 1915, to 3.7 million in 1925. Sales dropped to only 1.1 million in 1932 and during World War II, the auto factories were converted to wartime production.

The Modern Industry

After 1945, sales once again took off, reaching 6.7 million in 1950 and 9.3 million in 1965. The U.S. auto industry dominated the global market with 83% of all sales, but as Europe and Japan rebuilt their economies, their auto industries grew and the U.S. share dropped to about 25%. Following the OPEC oil embargo in 1973, smaller, fuel-efficient imports increased their share of the U.S. market to 26% by 1980. In the early 1980s, U.S. auto makers cut costs with massive layoffs. Throughout the 1990s, imports—particularly from Japan—took an increasing share of the U.S. market.

Beginning in the early 1980s, Japanese and, later, German companies set up factories in the United States; by 1999, these were capable of producing about 3 million vehicles per year. That year, 8.7 million vehicles were sold in the Untied States. Since then, domestic production by U.S. companies has continued to decline, so that they now produce somewhat more than half of all light motor vehicles sold in America (and many of their vehicles contain a significant percentage of foreign parts as determined by dollar value). In 2007, over $440 billion worth of motor vehicles and parts were produced in the United States by U.S. and foreign companies employing more than 902,000 workers. The credit crisis that began in 2008 and the associated recession resulted in significant losses for most automobile manufacturers. The U.S. industry was especially hard hit, losing sales as well from late 2007 to mid-2008 as customers sought more energy-efficient cars as gasoline prices skyrocketed, and in late 2008 U.S. automotive companies sought government financial aid. Subsequently, the government forced Chrysler and General Motors to declare bankruptcy (2009) and reorganize in an attempt to create viable companies. The U.S. and Canadian governments, Italy's Fiat (which purchased a majority stake in Chrysler), and the United Auto Workers owned much of the new companies. By 2013 and 2015 the U.S. and Canadians government respectively had sold all of their shares in General Motors, and the UAW has reduced its ownership share. In 2014, Fiat purchased all of Chrysler and incorporated in the Netherlands as Fiat Chrysler Automobiles NV.

Complaints about auto pollution, traffic congestion, and auto safety led to the passage of government regulations beginning in the 1970s, forcing auto manufacturers to improve fuel efficiency and safety. Auto companies are now experimenting with cars powered by such alternative energy sources as natural gas, electricity, hydrogen fuel cells, and solar power.

Bibliography

See R. Sobel, The Car Wars (1984); J. Fink, The Automobile Age (1988); J. A. C. Conybeare, Merging Traffic: The Consolidation of the International Automobile Industry (2004); B. Vlasic, Once Upon a Car: The Fall and Resurrection of America's Big Three Automakers (2011).

References in periodicals archive ?
Second, the automobile industry gathered together an industrial work-force of incredible social and cultural diversity in the first half of the 20th century.
Morris outlines well the broad forces reshaping the Latin American automobile industry. The authors emphasize the common origins of this process in the debt crisis of the 1980s and the resulting decline in domestic vehicle sales, intensified competition in the global automobile industry, and transnational automobile companies' shift to export manufacturing and their search for increased flexibility in the organization of production.
The best parts of Eastman's book are the final four chapters, in which he discusses the reaction of the automobile industry to the mounting evidence that automobile design was a significant contributor to the safety problem.
According to the report, the automobile industry in Vietnam is still underdeveloped in manufacturing and assembly compared to other Asean countries, but the accumulation of industrial land for the industry is increasing.
'It (automobile industry) is essentially marred by a lack of competition.
Also, the source disclosed the value of yearly sales of the automobile industry would experience a major fall of Rs100.80 billion.
The Union of automobile industry enterprises of Kazakhstan also indicated that Kazakh administrative police has registered 501 652 vehicles in the reporting period.
GAC Motor, a subsidiary of GAC Group, has launched a range of new cars at the 2017 Shanghai International Automobile Industry Exhibition.
Addressing the gathering Toichi Ishiyama, President and CEO Honda Atlas Cars (Pakistan) Limited talked about the legacy of Honda and its contribution in the automobile industry.
A worldwide leader in anti-corrosion protection of metallic parts based on zinc flake chemical compounds in aqueous phase, the NOFMetal Coatings Group is a partner of choice in the automobile industry, the company reported.
MINISTER of heavy industries and public enterprises Praful Patel will take a delegation of the automobile industry to Prime Minister Manmohan Singh and Union finance minister P.

Full browser ?