The Automobile
invented in Europe
1769 - ...

Automobile is the most important means of personal transportation for many millions of people around the globe. People depend on their cars and trucks to travel to and from work, to run errands, to visit friends and relatives, and to take vacations.

The United States, Canada, Japan, Western European countries, and other developed nations have the most automobiles. But even in developing nations, more and more people own cars, and bumper-to-bumper traffic clogs the streets of big cities in many of those countries.

The origin of the automobile can be traced to Europe. But it became a major form of transportation first in the United States. In the early 1900's, Ransom E. Olds, Henry Ford, and other pioneer automakers began mass-producing cars. Although some people disliked the "horseless carriage," many welcomed the introduction of the new machine because it would replace horse-drawn carriages. Unsightly horse droppings would no longer litter the streets, creating a terrible stench and attracting disease-bearing flies. No longer would people be burdened by the need to keep horses or be limited to traveling short distances.

The giant auto industry developed over the years as an increasing number of people bought cars. Americans were said to have a love affair with the automobile, and the United States became a nation on wheels. The automobile revolutionized the American way of life and would change living patterns in much the same way when it spread to other countries. The automobile helped give people the freedom to live, work, and travel wherever they wanted. It ended the lonely lives of farm families by placing neighbors, cities, and towns within easy reach. The automobile led to the growth of suburbs, motels, shopping centers, superhighways, theme parks, drive-in restaurants, and drive-through banks.

But along with all the glories of the automobile culture came serious problems. Car accidents killed and injured at an alarming rate, exhaust fumes fouled the air, and the roar of city traffic became nerve-racking. Some people yearned for the old days before the automobile, when life seemed simpler, slower, and gentler. But there could be no going back. The automobile had become woven into the fabric of modern life. And the auto industry itself had become basic to the economic well-being of developed countries. Today, many developing nations also seek to set up an automotive industry because it generates and supports a wide range of businesses and so can stimulate economic growth.

History of the automobile

During the late 1700's, the development of steam-powered engines progressed rapidly in Europe. Inventors dreamed of a "horseless carriage" -- and steam seemed the obvious power source.

Nicolas-Joseph Cugnot, a French military engineer, built the first self-propelled road vehicles in 1769 and 1770. One was designed to carry passengers, while the other was a three-wheeled steam tractor for hauling artillery. In 1801 and 1803, Richard Trevithick of England demonstrated four-wheeled steam-propelled road vehicles to carry passengers. But he lacked the money to continue his work.

Numerous attempts in England to promote the use and development of steam cars failed because of competition from railroad and stagecoach companies. Early steam cars damaged roads and sometimes blew up. They also made a terrible racket, dirtied the air with smoke, and frightened horses. In 1865, the "Red Flag Law" ended further development of automobiles in England for about 30 years. Under the law, a steam car could go no faster than 4 miles per hour in the country and 2 miles per hour in town. To warn of its approach, a signalman had to walk ahead of the vehicle, swinging a red flag by day and a red lantern by night.

In 1805 in the United States, an inventor named Oliver Evans demonstrated a steam-operated dredge mounted on a boat. He built the dredge to deepen and clean the Philadelphia waterfront. Evans put wheels on the boat and drove the gigantic machine, which weighed about 20 short tons, through the streets to the harbor and into the water. During the 1860's, another American inventor, Sylvester H. Roper, developed a much smaller steam vehicle. It looked more like a present-day automobile. Roper's vehicle received much public attention and was even exhibited in a circus.

Many other Americans experimented with steam cars during the late 1800's. They included J. N. Carhart, Richard Dudgeon, and Ransom E. Olds. The number of U.S. companies that made steam cars grew rapidly. One of the most successful firms was founded by identical twin brothers, Francis E. and Freelan O. Stanley. They built the famous Stanley steamer.

At first, it took too long for the fire to heat the boiler. Inventors solved that problem, but others remained. The steam engines had to be small to be practical for cars, and so they had to be high-pressure engines to produce the required power. However, such engines cost much to build and maintain, and the steam-powered car gradually disappeared. In 1924, the Stanley brothers' company--one of the last steam car manufacturers -- went bankrupt.

About 1891, William Morrison built the first successful American electric car, a six-passenger vehicle powered by batteries under the seats. Electric cars quickly became popular because they were quiet, easy to operate, and free of smelly fumes. In 1900, they accounted for 38 per cent of all U.S. car sales. But the batteries limited how far or fast electric cars could go. Few electrics could travel faster than 20 miles per hour, and the batteries had to be recharged at least every 50 miles. By 1905, only about 7 per cent of all cars sold in the United States were electrics.

The automobile as we know it today resulted from the development of the internal-combustion engine. Jean Joseph etienne Lenoir, a Belgian living in France, patented the first commercially successful internal-combustion engine in 1860. It burned coke oven gas and was noisy and inefficient. But Lenoir sold several hundred engines, which powered printing presses, lathes, and water pumps. He also installed one in a crude motorcar.

In 1885, Gottlieb Daimler and Karl Benz, two Germans working separately, developed the first successful four-stroke gasoline engines. Their engines led to the development of those used in most cars today. Many early European manufacturers turned out cars based on Daimler's and Benz's work and patents. In 1891, a French company, Panhard et Levassor, created the basic design for the automobile that remained largely unchanged for nearly 100 years. The firm placed a Daimler engine in the front of the car and used a revolving chain to transfer power to the rear wheels. Most cars had a front engine and rear-wheel drive until the mid-1980's, when front-wheel drive began to predominate.

A French rubber-making firm, Michelin, introduced the first tires filled with compressed air for use on cars in 1895. Michelin developed such pneumatic tires under license from an English maker of bicycle tires. Many people believe that the automobile became a practical means of transportation because of, first, the invention of the internal-combustion engine and, second, the development of the pneumatic tire.

The birth of the automobile industry occurred in 1885, the year Daimler and Benz built their successful gasoline engines. Until 1900, Europe led the world in automobile development and production. Many present-day European car companies began in the late 1800's. For example, Peugeot, a French firm, started making automobiles in 1890. Another French company, Renault, began producing cars in 1898. Fiat of Italy dates from 1899. France and Germany became the first large production centers.

The Duryea brothers, Charles E. and J. Frank, built the first successful gasoline car in the United States. They drove their car on the streets of Springfield, Mass., in 1893 and 1894. The brothers founded the Duryea Motor Wagon Company, the first U.S. firm to make gasoline cars, in 1895. Many other automaking firms were started in the United States during the industry's early years. Some quickly failed, but others still produce vehicles. The center of the auto industry shifted from Europe to the United States after 1900. Production of American cars increased from fewer than 5,000 in 1900 to more than 1˝ million in 1916.

From the beginning, the auto industry had an enormous impact on the U.S. economy. As car production increased, the demand for steel, rubber, glass, machine tools, and other goods grew and grew. At the same time, the industry began to develop its own supporting divisions for sales, service, and repairs. The nation's employment and tax revenues soared.

The United States took the lead in carmaking from Europe because it had a larger potential market. In 1910, the United States had about 92 million people, compared with about 65 million in Germany, 41 million in Britain, and 39 million in France. Americans also enjoyed a higher average income, and so more of them could afford to buy cars.

Two other factors had much to do with the rapid growth of the U.S. automobile industry. One was a sharp drop in the price of gasoline following the discovery of huge oil fields in eastern Texas in 1901. Plentiful, cheap gasoline made cars relatively inexpensive to operate.

The second factor aiding the U.S. industry was the application of mass-production techniques to the manufacture of automobiles. Prior to 1900, carmakers had used skilled craftsmen to assemble each automobile. But American manufacturers had been using mass-production techniques since the mid-1800's to make such products as firearms and farm equipment, and it was inevitable that they would apply this process to carmaking. Once established, mass production brought the price of U.S. cars down to a level that many people could afford. By the early 1900's, a buyer in the United States could choose among a variety of cars costing less than $1,000, while elegant European models, most of which were still handcrafted, sold for over $2,000.

Many historians credit the 1901 Oldsmobile with being the first mass-produced car. More than any car before, this automobile was built of parts made by outside suppliers and shipped to the assembly plant. Mass production took a giant step forward in 1904, when Henry M. Leland took charge of the Cadillac Automobile Company and began building cars using interchangeable parts. Interchangeable parts could be used to assemble or repair any car of the same model. Previously, most parts were made to fit only one particular car.

But more than anyone else, Henry Ford perfected the mass production of automobiles. In 1913, Ford installed a moving assembly line in his car factory. The frame of the car was pulled through the plant by a chain. Workers on each side assembled the car by adding parts that had been brought to them by conveyor belts. This process resulted in a huge cut in production time and costs.

As the U.S. industry developed, the Northern industrial cities of Cleveland, Chicago, and Detroit made the most cars. But Detroit and its surrounding area soon became the Automobile Capital of the World for several reasons. Detroit already had many foundries and machine shops and was a center for making cast-iron stoves and marine engines. Nearby Flint was a major producer of horse-drawn wagons and carriages. Detroit also lay on the Detroit River and served as a gateway to ports on the Great Lakes. But Detroit's chief advantage over other early production centers was that the area had a large number of successful pioneer automakers.

Ransom E. Olds began tinkering with steam and electric engines as a teen-ager. While in his 20's, he built his first vehicle--a three-wheeled steam-powered car. He helped found the Olds Motor Works in Detroit in 1899. In 1901, the firm began to mass-produce its famous curved-dash Oldsmobile, a low-cost gasoline car. The floorboards curved up in front, forming a stylish dashboard.

Henry Ford worked as a machinist and engineer in Detroit when a young man. He built his first successful gasoline car in 1896 and founded the Ford Motor Company, his third company, in 1903. His first company failed, and he simply left the second. Ford introduced his famous Model T in 1908. It sold for $825. Through mass production and low production costs, he was able to cut the car's price repeatedly. The key to Ford's success was his moving assembly line, which tripled production to more than 240,000 Model T's a year. The car's price dropped to $345 in 1916 and to $290--its all-time low--in 1924. The Model T outsold all other cars for almost 20 years and truly put America on wheels. People called it, with affection, the Tin Lizzie.

William Crapo Durant became a millionaire by making carriages in Flint. In 1904, he took control of the Buick Motor Company, founded by David Dunbar Buick. Durant made Buick a top producer by 1908. That year, he organized General Motors Company with the goal of making cars in a broad range of sizes and prices. Over the next two years, the company, called GM for short, acquired many other car manufacturing companies, including Cadillac and Oldsmobile, plus many supplier firms. Durant lost control of GM in 1910. Charles W. Nash replaced him as president at Buick, and Walter P. Chrysler became Buick's works manager. In 1911, Durant and Louis Chevrolet formed the Chevrolet Motor Company, whose low-priced car enjoyed immediate success. Durant regained control of GM in 1916. Nash, who became GM's president in 1912, resigned and formed the Nash Motor Car Company. Chrysler eventually became vice president of GM. Later, he founded the Chrysler Corporation.

The Dodge brothers, John and Horace, originally produced bicycles. In 1901, they opened a machine shop in Detroit and soon built parts for Olds and Ford. The Dodges amassed a fortune from their business and especially from their purchases of Ford stock. In 1914, they began making their own autos, which were among the first American cars with an all-steel body. Buyers liked the new Dodge -- and its price. It cost only slightly more than the Model T.

Technological advances came quickly after the birth of the auto industry and helped make cars safer, more comfortable, and easier to operate. One major development was the introduction of the electric self-starter. Charles F. Kettering of Ohio invented it in 1911, and General Motors installed the first ones in its 1912 Cadillacs. The self-starter ended the need to insert a crank into the front of the engine and then turn the crank by hand until the engine started. Hand-cranking was difficult, troublesome, and sometimes dangerous.

In 1914, most U.S. automakers agreed to share the use of one another's patents without cost. This system, called cross-licensing, ended in 1956. Since then, automakers have treated their inventions as private property.

World War I and the Roaring Twenties. At first, World War I (1914-1918) hardly affected progress in the young U.S. auto industry. Motor vehicles played a major role in the war, but the industry continued to manufacture many cars for private purchase. However, car production fell for the first time in 1918, reflecting chiefly a shortage of materials. After the war, the industry expanded again.

The boom times of the 1920's got off to a poor start as an economic slump struck the United States in 1920 and 1921. The sagging economy hurt the auto industry badly and resulted in major shifts in the leadership of the big companies.

General Motors common stock plunged as car sales dried up. Durant had to leave his post as head of GM for the second time. He again set up another company, Durant Motors, in 1921. It captured fourth place in car sales in 1923 but failed in the 1930's.

Alfred P. Sloan became GM's president in 1923. He developed several ideas that the entire industry came to adopt. Sloan sought to stimulate sales by changing model styling each year. Most of the world's large automakers still follow the practice. The tactic is often described as planned obsolescence -- the manufacture of products designed to become outdated sooner than might be expected. However, the purpose has never been to build cars that would necessarily have short lives but rather to improve and restyle each year's models and so encourage customers to buy a new car before the old one has to be replaced. Sloan also set up a system of group management in which each GM car division would be independent and responsible for its own operations. Yet the head of GM would still have tight control. Sloan thus established an organizational structure for managing the huge companies that the major automakers were becoming.

Leland left Cadillac in 1917 and founded the Lincoln Motor Car Company. But the economic slump damaged the company so severely that Leland sold it to Henry Ford in 1922. The Ford Motor Company then had a luxury car -- the Lincoln -- to contrast with its Model T. But the Model T suffered declining sales in the mid-1920's. The economy boomed after the 1920-1921 slump, and people had extra money to spend on cars. Car buyers wanted more than just basic transportation. Other companies, especially GM and the new Chrysler Company, built cars that offered comfort, styling, and speed at reasonable prices. Henry Ford stopped making the Model T in 1927. He introduced the Model A in late 1927. In 1928, it outsold the top-selling car--GM's Chevrolet. Since then, Chevrolet and Ford vehicles generally have been the top sellers in the United States.

Chrysler retired from General Motors as a millionaire in 1919. In 1921, he became president of Maxwell Motor Corporation and breathed life into the ailing firm. Chrysler introduced a new car, which he called the Chrysler, in 1924. It was an immediate success. Chrysler renamed the company the Chrysler Corporation. He bought the Dodge Company in 1928 and introduced two new makes--the De Soto and the Plymouth -- in 1928.

During the 1920's, the number of U.S. automakers dropped sharply -- from 108 in 1923 to 44 by 1927. Throughout the decade, the Big Three -- Ford, General Motors, and Chrysler -- produced most American cars. Small companies chiefly built luxury autos, whose smart styling and elegant features led to their being called classic cars. Packard was the most popular classic car. Other favorites included the Duesenberg, Peerless, and Pierce-Arrow. The Big Three made their own luxury cars -- GM's Cadillac, Ford's Lincoln, and Chrysler's Imperial.

The auto industry quickly recovered from the 1920-1921 economic slump. Production climbed from almost 2 million vehicles in 1919 to more than 5 million in 1929. The soaring output reflected the good times of the 1920's. Americans eagerly spent money on new cars. In addition, dealers and manufacturers encouraged people to trade in their old car for a new model or to trade up for a better car. Those who lacked cash could buy on credit.

The auto industry thus became a pillar of the U.S. economy in the 1920's. The value of its output exceeded that of any other industry. Furthermore, it had become basic to the well-being of many other industries. The automakers bought about 80 per cent of U.S. rubber production, 75 per cent each of plate-glass and oil production, 25 per cent of machine tools, and 20 per cent of steel output. The economy was also stimulated by the thousands of repair shops, filling stations, restaurants, and lodging places that had sprung up to serve the millions of Americans who traveled by car.

Contributor: David J. Andrea, M.B.A., Director of Forecasting, AutoPacific, Inc.

Michael S. Flynn, Ph.D., Research Scientist, Office for the Study of Automotive Transportation, Univ. of Michigan Transportation Research Institute.


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