The Automobile Industry

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The automobile industry consists of a massive enterprise that plans and designs cars and
light trucks and produces, distributes, markets, and sells these products. The industry sells
about 75 million cars worldwide in a year; the United States purchases more than 11 million cars each year. The United States also produces about 25 percent of all cars made worldwide. Only Japan makes more cars than the United States, but China has been closing the gap fast and may soon overtake U.S. carmakers. Car manufacturing supports many other industries, primarily the oil industry. Makers of engines, plastics, metals, fabrics, leathers, tires, and small components of car bodies, plus recyclers, service stations, and businesses that install sound systems and other add-ons all depend on the car industry for their income. The automobile industry, which controls the development-to-sale process, combines with all the other associated industries to form the more all-encompassing automotive industry.

The first automobile built to carry passengers arrived in 1801 due to the inspiration of the
British inventor Richard Trevithick. Through the 1800s, vehicles self-propelled by steam engines became common. The French inventor Étienne Lenoir and the German engineers Eugen Langen and Nicholaus August Otto worked on building a combustion engine to run on fuel and replace steam, a move intended to make cars more powerful. By 1876 Otto developed a four-cycle combustion engine that would be the precursor to today’s engines. In 1913 the American Henry Ford invented a conveyor belt to take components directly to workers on a car assembly line, and from this point onward, American automakers would dominate the automobile industry for the next 75 years.

The development of the combustion engine and Ford’s innovative mass production promised a bright future for the automobile industry. The U.S. automobile industry dominated world markets until the 1980s when Japanese automakers mounted a strong challenge to American models. In 1970 the Clean Air Act brought new laws for car emissions, but the automobile industry learned to sidestep most of the regulations with a few minor concessions, such as the catalytic converter that made combustion more efficient. (Catalytic converters also caused a switch to lead-free gas because the devices did not work on leaded gas.) The act’s 1990 amendments forced automakers into taking further steps toward inventing clean-running engines that produced less hazardous emissions than earlier models. Today the automobile industry continues to adjust to tighter restrictions on exhaust emissions, led by California with the strictest emissions laws.

An Arab oil embargo in 1973, fuel crises throughout the 1970s, and rising fuel prices in the
2000s have been events that put pressure on the automobile industry to find more avenues
toward fuel efficiency. In all these instances, however, automakers reacted to new requirements rather than led the way in innovation. In 2009, a faltering world economy put pressure on automakers to accept President Barack Obama’s new fuel legislation. “They [automakers] can feel the political winds changing,” said lawyer David Doniger of the Natural Resources Defense Council. “They need government aid to stay in business. When you have your hand out for help, it’s hard to use the same hand to thumb your nose at the federal government.”

Temporary fuel crises certainly affect the auto industry and car sales, but a more overwhelming threat to the industry’s conventional way of doing things comes from deep underground. The crude oil that the oil industry taps and turns into fuel will not last forever. The auto industry cannot wait until the last drop of oil comes out of the Earth before it reacts. Mike Millikin, the founder of the Green Car Congress, and the environmental writer Alex Steffen wrote in 2006, “The auto industry was built on a seemingly endless supply of gasoline, but it is now becoming increasingly clear that the end is, in fact, in sight.” The end of oil should not signal the end of the auto industry, but to avoid going extinct this industry’s leaders must plan for the future now.