Automation
Robots weld parts of an
automobile together on an automated production line in Fenton, Missouri. As
computer and robot technology has become more advanced, robots are increasingly
able to perform more complicated tasks.
Automobile Industry, industry that produces
automobiles and other gasoline-powered vehicles, such as buses, trucks, and
motorcycles. The automobile industry is one of the most important industries in
the world, affecting not only the economy but also the cultures of the world.
It provides jobs for millions of people, generates billions of dollars in
worldwide revenues, and provides the basis for a multitude of related service
and support industries. Automobiles revolutionized transportation in the 20th
century, changing forever the way people live, travel, and do business.
The automobile has enabled people to
travel and transport goods farther and faster, and has opened wider market
areas for business and commerce. The auto industry has also reduced the overall
cost of transportation by using methods such as mass production (making
several products at once, rather than one at a time), mass marketing
(selling products nationally rather than locally), and globalization of
production (assembling products with parts made worldwide). From 1886 to
1898, about 300 automobiles were built, but there was no real established
industry. A century later, with automakers and auto buyers expanding globally,
automaking became the world's largest manufacturing activity, with nearly 58
million new vehicles built each year worldwide.
As a result of easier and faster
transportation, the United States and world economies have become dependent on
the mobility that automobiles, trucks, and buses provide. This mobility allowed
remote populations to interact with one another, which increased commerce. The
transportation of goods to consumers and consumers to goods has become an
industry in itself. The automobile has also brought related problems, such as
air pollution, the emission of greenhouse gases that contribute to global
warming, congested traffic, and highway fatalities. Nevertheless, the
automobile industry continues to be an important source of employment and
transportation for millions of people worldwide.
Automobile manufacturers are among the largest
companies in the world. These corporations are often multinational, meaning
they have subsidiaries and manufacturing plants in many different countries.
These companies often share parts, use parts made in foreign factories, or
assemble entire cars in foreign countries. The three major automobile
manufacturers in the United States—General Motors Corporation, Ford Motor
Company, and Chrysler, formerly DaimlerChrysler AG—provide much of the
industry's total direct employment in the United States, but increasingly
foreign automakers, such as Toyota Motor Corporation and Nissan Motor Co.,
Ltd., are building automobile assembly plants in the United States.
Foreign automakers are taking advantage of
tax incentives and laws that discourage union organization in the Southern
United States, in particular. Eleven foreign-owned auto plants operated in the
United States in 1993. By 2007 that number had grown to 28. Many of these
plants were located in such states as Alabama, Mississippi, South Carolina,
Tennessee, and Texas.
Automotive parts manufacturers are another
large section of the U.S. auto industry, comprising about 5,000 firms,
including Japanese, European, and Canadian companies. These firms supply the
original equipment market (for manufacture) and the replacement parts market
(for maintenance and repair). By some estimates, for every job created in the
automobile assembly industry, three to four jobs are created in the automotive
parts industry. Numerous other industries support the automobile industry.
These include the insurance, security, petroleum, and roadway design and
construction industries. Still other industries, such as motels, drive-in
theaters, and fast-food restaurants, owe their existence to the mobility
provided by the automobile.
The automobile industry directly influences
the economies of the United States and other countries around the world. In a
typical year, the U.S. automobile industry generates between 12 and 14 percent of
manufacturers' shipments of durable goods (products designed to last at least
three years). Automobile production consumes large amounts of iron, steel,
aluminum, and natural rubber. The automobile industry also consumes more
copper, glass, zinc, leather, plastic, lead, and platinum than any other U.S.
industry.
Rising imported car sales in the United
States during the 1980s threatened the economic strength of U.S. automakers.
Domestic sales rebounded in the 1990s, but as the 21st century began, foreign
carmakers resumed making inroads in U.S. car sales. Ford saw its car and truck
market share in North America fall to about 17 percent in 2005, returning to
its percentage share in the 1980s, and General Motors saw its North American
market share drop to 26 percent in 2005. In July 2007 foreign automakers
outsold U.S. car companies in the United States for the first time ever, taking
51.9 percent of the market in cars and light trucks, including sport utility
vehicles (SUVs). In the first quarter of 2007 Toyota overtook GM as the largest
car seller worldwide.
Sales of U.S. motor vehicles to
Americans are expected to remain near the same level in the future, with about
1 to 2 percent growth per year, while foreign markets are expanding at rates
that are two, three, and even ten times faster. Because exports will be
essential to expanding the auto and auto parts industries, U.S. trade officials
have negotiated trade agreements such as the Memorandum of Understanding with
Korea (1993), the North American Free Trade Agreement (NAFTA, 1994), and the
U.S.-Japan Automotive Framework Agreement (1995). These and other agreements
have increased automobile and other exports to Japan, Mexico, and Korea many
times over.
In 1994 the United States
successfully promoted the Uruguay Round of the General Agreement on Tariffs and
Trade (GATT), which helped American auto export potential because it improved
access to both major and developing markets. These initiatives have helped the
U.S. automotive industry achieve the highest level of exports on record.
Making a car involves several major decisions
about the design of the car, how it will be built, and how it will be sold.
Managers must also coordinate factory production, purchase materials, and train
workers—all within a budget. Marketing teams must then sell the car and project
returns on shareholder investments. New models are introduced yearly, but a
single car design can take several years to get from the drawing board to the
showroom floor. A typical company will therefore have several new designs in
various stages of development at any given time.
The group within an automobile
company that makes the main decisions about new cars often includes the
chairman of the board and board members, the president, the marketing director,
the sales director, the finance director, and the head of product development.
These leaders must budget money, recruit a workforce, and set realistic
deadlines. Rather than sending ideas from step to step as they are completed,
leaders collaborate from the start with designers and engineers in a process
known as simultaneous engineering to increase the speed and efficiency of car
production. Engineering, manufacturing, sales, and other specialized
departments in turn support the leadership decisions. Most of these positions
require college degrees and extensive training. Companies also rely on the
administrative services of clerks, typists, telephone operators, and others to
support the process of automaking.
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Research, Design,
and Development
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Before a new car is built, it
must be researched, designed, and developed into a workable product.
Researchers analyze market trends, consumer surveys, and buying patterns to
determine what consumers want, and then suggest what kinds of cars to make.
Designers work to shape these new ideas into tangible parts or products.
Engineers adapt existing parts for the new model and draw up new plans for the
prototype. A prototype is a custom-built working example of a new design.
Manufacturers begin by building a few prototypes before they set up a factory
to build the new car. Product planners monitor the process along the way and
make sure that an approved new car program finishes on time and within budget.
As technology advances, new cars continually
feature new systems and innovations. Change and innovation in the auto industry
take time to implement and must allow for, but not be overwhelmed by, consumer
whims or government regulations. New systems are usually introduced one at a
time, or new technologies applied to one area at a time. A new component system
(such as a new braking system) in a fully developed prototype can take as long
as four years to incorporate into a new model. Part of this time is needed to
design, build, and install production tools to make the new model. Testing the
new system on rough mock-ups (called test beds) and in preproduction vehicles
to see what happens to overall performance takes additional time.
Meanwhile, members of the marketing and
sales staffs select a name for the new product, conduct surveys to determine
what share of the market the new model can anticipate, and troubleshoot
potential problems. Initial production targets are set according to available
market research results.
Once the board approves the model and
name, the first working prototype emerges from experimental workshops. Board
members try out the working prototype, then experts take it through extensive
tests, including wind tunnel, dust tunnel, factory track, water-proofing bays,
desert heat, arctic cold, and crash tests.
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Manufacturing and Assembly
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Before a new model can be built,
the factory must first be retooled. Retooling a factory involves changing the
machines on the factory floor to produce a different style of automobile.
Skilled tool makers, pattern makers, and die makers look at the specifications
for the new car parts and cooperate with the tool design office to craft the
tools and modify, or tool up, the machines.
The purchasing department assures that
needed supplies for production are available on time and within budget. Qualified
buyers have knowledge of both engineering and accounting, and they are
responsible for ordering the raw materials to make the parts in-house or for
ordering finished components from a parts supplier.
After raw materials are received and
inspected, they are cast, forged, stamped, or molded into different body shapes
(see Forging). Press shop workers operate the machines that stamp steel
into body panels. Fiberglass molders and cutters help mold large plastic body
parts and cut the rough edges. Paint shop workers and spray gun operators put
the final touches on the plastic or steel shell. Since many of these
body-making jobs have been or are being automated, there is an increasing need
for computer analysts, programmers, and technicians. These computer-oriented
positions usually require college degrees or post-high-school training.
Machine operators, who work in all parts of
the factory, are particularly important in engine building. They take the rough
castings and forgings of the engine parts and machine them to the required
tolerances and accuracy. Machine operators need to be skilled, with experience
on numerically controlled and computerized machinery. Engine builders put the
engine parts together by hand, a job for car mechanics who can quickly understand
changes in engine design.
Manufacturing personnel work on the assembly
lines and operate numerous machines, computers, robots, and other equipment to
produce the items needed for each car. Heat treatment tempers and strengthens
the forged and cast parts, which are then shaped into components that are
assembled into subassemblies (gearboxes, axles, engines, doors, dashboards).
The chassis (the underlying frame of the automobile) and body are joined
and painted. Electricians, many of whom are first hired as apprentices or
trained in company training programs, make sure that electrical parts are
correctly fitted and connected in the car.
Components and subassemblies are gradually
combined along the assembly line at different points to construct the car. Line
operators generally are less skilled workers who carry out one or two simple
assembly line operations. The manufacturer gives these workers limited
training. At almost every stage of the assembly process, skilled inspectors
assure the quality of the work.
This pattern of production, which
emerged from 1900 to 1920, changed little in the first 80 years of the century.
Beginning in the late 1970s and early 1980s, manufacturers began buying
completed subassemblies instead of their components—completed dashboards, for
instance, rather than individual instruments—and began building the auto body
around these subassemblies. These and other production strategies have enabled
companies to address the fast-changing market more rapidly and effectively.
Companies can now change production lines faster and make more specialized cars
more economically.
Market researchers contribute to the
original design process and continue their studies throughout the manufacture and
sale of a car. Market researchers compile newspaper, industry, and public
reaction from polls and product surveys. They use these findings to help plan
sales campaigns. For example, if surveys show consumers like the energy-saving
features of a car, then those features might be the focus of advertising. The
advertising department uses results from polls and focus groups (small
groups of potential consumers) to shape advertising tools for dealers as well
as national advertising campaigns aimed directly at the public.
The corporate sales staff works with
the car dealers throughout the country to prepare them to sell the new product.
Toward the end of the 20th century, the number of dealerships declined, but
their size and the number of total cars sold increased. In 1950 about 47,000
dealers sold 7.2 million vehicles. By 1985 half as many dealers sold twice as
many cars. High-volume dealers, called megadealers, with multiple locations and
multiple franchises (agreements with several companies to sell their cars)
compete most favorably. Car supermarkets (establishments that sell used
cars at a fixed price, often with a 30-day return policy) and dealerships with
separate repair and sales departments are two current trends that are likely to
continue. Many car dealerships in the United States also devote a portion of
their sales staff to Internet sales. Internet sales associates help potential
buyers research and purchase cars online.
Dealership mechanics must learn how to
maintain and repair new models. More than 80 percent of the functions of the
average automobile are controlled by electronics. This has created a large need
for educated mechanics who can also operate computerized diagnostic equipment.
The National Institute for Automotive Service Excellence (ASE) was established
in 1972 to help consumers select competent service professionals. ASE
Certification of mechanics increased from 8,567 in 1972 to more than 400,000 in
2002. Trade and technical schools continue to be the major source of training
for service professionals, who work in car dealerships, service stations, tire
shops, and elsewhere.
Consumers have increasingly become part of
the team that shapes the products that are designed and built—especially since
the 1960s and 1970s. The company maintains a press fleet so automotive
correspondents can test drive new models and review them. In some companies,
top executives also test drive new cars and give their feedback. Focus groups
of consumers are organized to test recent innovations to see if they would be
suitable to apply across a product line. For example, focus groups of consumers
who like off-road operation provided the initial market test of four-wheel
drive passenger cars. Other consumer groups have road tested innovations such
as fuel injection, turbocharging, and trip computers. After these focus groups
give their feedback, designers refine the innovations and introduce them into
other vehicles.
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HISTORY OF THE
AUTOMOBILE INDUSTRY
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Automobiles as we know them today are
the product of centuries of tinkering and innovation. Automobile production has
grown from small companies making simple so-called horseless carriages to
international corporations that mass-produce advanced, reliable automobiles for
consumers.
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Early Automobile
Concepts
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In the 15th century, Italian
inventor Leonardo da Vinci envisioned possibilities for power-driven vehicles.
By the late 17th century, English physicist Sir Isaac Newton had proposed a
steam carriage, and by the late 18th century French army captain
Nicholas-Joseph Cugnot had actually built one. By the mid-1800s, the popularity
of steam vehicles began to decline because they were dangerous to operate and
difficult to maintain. At about the same time, inventors became interested in
the internal-combustion engine.
Robert Street of England filed a patent
in 1794 that summarized how an internal-combustion engine might work, but it
was Belgian-born French inventor Jean-Joseph-Étienne Lenoir who built the first
commercially successful internal-combustion engine in 1859. Lenoir’s engine had
a carburetor that mixed liquid hydrocarbons, which formed a vapor. An electric
spark in a cylinder ignited the vapor. By 1876 German shop clerk Nikolaus
August Otto had improved on Lenoir's engine, and the Otto engine became the
model of the internal-combustion engines used today. Germans Gottlieb Daimler
and Karl Benz attached motors to tricycles and automobiles, building what are
regarded as the first modern cars in 1885 and 1886 (DaimlerChrysler AG).
In America, lawyer George Baldwin
Selden studied many of the European engines at the Philadelphia Centennial
Exposition of 1876, then redesigned what he considered to be the best among
them. He reduced the engine weight so it could power a light road vehicle.
Selden patented his engine, so he ultimately received a royalty, or small
payment, for almost every car made in the United States.
Charles Edgar Duryea and his brother
Frank are credited with the first production automobile made in the United
States. Their small company produced 13 cars in 1896, ushering in the
automobile industry. Only a few more cars were sold in the following year, and
the brothers split up to follow separate interests.
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Henry Ford and Mass
Production
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Several small automobile manufacturers were
making cars in the early 1900s, but American Henry Ford helped popularize the
idea that anyone could own a car. Ford successfully challenged the Selden
patent in court, opening the door for increased automobile manufacturing. Ford
achieved initial success by making cars in large quantities to reduce costs and
by making them simple enough so many consumers could easily operate them. Ford
standardized parts and reorganized factory production to maximize efficiency.
Ford made the sturdy, black Model T
using mass production, the most economical way to make the maximum number of
similar copies of the car. He understood that efficient mass production would
lower car prices, making cars affordable for the average person, thus
generating a huge market. From 1910 to 1924, Ford cars decreased steadily in
price as they improved in quality. The Ford Model F in 1904 weighed 630 kg
(1,400 lb), had a two-cylinder motor, and sold for $1,200. By 1924 the Ford
Model T touring car was heavier at 680 kg (1,500 lb), had a more powerful
four-cylinder motor, and included a top and windshield—yet it sold for only
$290. Ford made only minor changes to the Model T for nearly two decades, and
more than half of the cars sold in the United States were Model Ts during many
of those years.
While Ford was perfecting his Model T,
William C. Durant established the General Motors Corporation (GM) in 1908.
Durant combined the Buick, Oldsmobile, and Oakland companies, and later
Cadillac, to form GM. The firm started by Louis Chevrolet was added in 1918.
General Motors weathered numerous financial crises in its early years, finally
gaining stability when the du Pont family bought much GM stock (since divested)
in 1920. The invention by Charles Franklin Kettering of the electric
self-starter in 1912 was a benchmark in U.S. automotive development, but others
quickly followed, including balloon tires in 1921. Among other U.S. automotive
pioneers were brothers John and Horace Dodge, machinists and bicycle builders
after whom the Dodge car is named, and Walter Percy Chrysler, a railroad worker
who later formed Chrysler Corporation. Ford, GM, and Chrysler, known as the Big
Three, eventually became the dominant automakers in America.
In 1914 Ford announced a generous,
unprecedented $5 per day wage for workers who were with the company more than
six months, doubling the previous wage. He wanted workers to be able to afford
the cars they made, but he also wanted to stabilize his workforce, which had
high turnover due to the repetition of assembly-line work. U.S. assembly line
production satisfied the huge American market for vehicles and allowed American
carmakers to dominate early auto manufacturing. By 1916 annual U.S. auto
production reached one million units, a level not reached by any other country
until England about 40 years later.
By 1920 Ford's success in building an
inexpensive, durable car had produced a large secondhand car market, which
meant that new Fords had to compete with old Fords. In the late 1920s and early
1930s General Motors Chairman Alfred Pritchard Sloan, Jr., decided to follow a
different strategy. He implemented the annual model and offered different lines
of cars at different prices, creating a ladder of consumption that consumers
could climb. These concepts helped GM challenge the dominance of Ford. In 1924
GM had about 19 percent of U.S. new-car sales, and Ford had just over 50
percent. Just two years later GM cut Ford’s lead down to 35 percent and raised
GM’s market share to 28 percent.
European and Japanese automakers were also
growing in this new industry. In 1914 the company that later became Nissan
Motor Co., Ltd., completed its first car in Japan. Fiat produced automobiles in
Italy, and Daimler and Benz merged together in 1926 to begin production of the
Mercedes-Benz line of automobiles. In 1928 the German manufacturer Bayerische
Motoren Werke AG (BMW), also known as Bavarian Motor Works, began building
automobiles.
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The Great
Depression of the 1930s
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Numerous automobile manufacturers, both big
and small, existed during the early years of the industry, but increased
competition began to reduce the number of companies. The economic depression in
the United States following the 1929 stock market crash brought even more
consolidation and competition to the auto industry. Many carmakers, such as
Duesenberg with its stylish models, disappeared during the depression.
Consolidation and sheer size, as well as innovation, helped the Big Three
automakers survive. Thinking that farmers might gain by producing crops that
could be turned into fuel or raw materials, Ford built a soybean processing
plant. Soon two pounds of every Ford were made from soy products. General
Motors survived and thrived with the standard volume concept, a financial
strategy that has endured. GM set its prices to produce a 20 percent return on
investment based on what it sold in an average year. Profits soared when sales
were above average, and GM would still profit during leaner years.
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Labor Unions and
Strikes
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Some discontented workers cautiously
organized into labor unions during the depression in order to improve working conditions
and increase pay. By 1936 the United Automobile Workers (UAW) planned to stop
work at General Motors. Workers at a GM plant in Cleveland were angered when
the plant manager refused to discuss reductions in the piece work rate, and
they started one of the first so-called sit-down strike in history, where
workers sat down at their posts and refused to leave until their demands were
met. The six-week strike involved fewer than 2,000 workers, but it affected
more than 150,000 other workers in different production areas. The contract
negotiated between management and labor representatives helped boost the
reputation of the UAW, although actual concessions gained in the contract were
minimal.
World War II (1939-1945) had a drastic
effect on automobile manufacturing in the United States. After 12 years of
depression, high unemployment, and labor strife, America was attacked by the
Japanese on December 7, 1941, at Pearl Harbor, Hawaii. Consequently, the United
States entered World War II. Two months later, the last passenger car for the
duration of the war rolled off the line. The automobile industry was converted
to wartime production. Chrysler Corporation mass-produced tanks, and numerous
carmakers built trucks for the military. GM built shells, bombs, fuses,
navigation equipment, machine guns, artillery, and antiaircraft guns, in
addition to engines and vehicles. Ford mass-produced bomber aircraft. The
automakers more than doubled their productive capacity during the war, and
women and minorities made up a significant portion of new workers.
Passenger car production resumed after World
War II with 1946 models. U.S. automakers had trouble meeting the pent-up demand.
Suburbs sprouted up and a nationwide system of interstate highways was planned.
In 1949 new-car sales of more than 4.8 million in the United States finally
topped the old record set in precrash 1929 by almost 1 million units. By 1955
sales approached 7.2 million.
While large companies enjoyed success,
smaller automobile companies and newcomers found it increasingly difficult to
compete against the expensive annual model changeovers offered by existing
manufacturers. In 1947 and 1948 American automobile pioneer Preston Tucker
began production of his Tucker Torpedo, which featured a Cyclops-like, centered
headlamp that turned with the front wheels. The design was good, but as a
low-volume manufacturer, Tucker ran into production problems, and his company
collapsed after managing to make only about 50 cars.
In the 1950s American automobiles
increased in size and sported decorative features such as tail fins. GM built a
strong sales lead during the 1950s when its cars included tail fins, automatic
transmissions, and high-compression V-8 engines. However, by the end of the
decade consumers began desiring smaller cars, and average sizes began to
decrease.
In the early 1960s the Big Three
American automakers rolled out compact cars, including the unconventional
Chevrolet Corvair, with an air-cooled six-cylinder rear engine. Because of the
rear engine placement, the car tended to oversteer, or turn more sharply at
higher speeds. In high-speed turns, the rear end tended to lift, and the first
prototype flipped over on the test track. More than one million Corvairs had
been sold before corrections could be made. American lawyer Ralph Nader
publicized the defects of the Corvair and condemned the auto industry in his
book Unsafe at Any Speed (1965; revised edition, 1972), though the
National Highway Traffic Safety Administration would later declare the car as
safe as other contemporary vehicles. Automakers responded by improving
structural safety and adding features such as seat belts, collapsible steering
columns, and safety windshields in their cars.
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Foreign Imports and
the Energy Crisis
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Europe and Japan had been busy reconstructing
their manufacturing capacity in the years following World War II, and their
smaller, more fuel-efficient automobiles became popular with the American
consumer. Volkswagen AG began importing its Beetle to the United States in the
early 1950s. Sales were slow at first but steadily improved. Early Japanese
imports such as the Toyopet, manufactured by Toyota Motor Corporation, and the
Nissan Datsun were introduced into the United States in 1958; but sales
initially suffered because there was no sound dealer network to service them.
Moreover, the American public, raised on large U.S. cars, viewed the smaller
autos as second-rate. As Volkswagen sales boomed during the 1960s, partly due
to clever advertising, the Japanese imports also grew in popularity. Toyota and
Nissan eventually passed Volkswagen in sales in the United States in 1975 and
1976.
Imported cars, with their lower price
and better fuel efficiency, became very popular in the 1970s, due in part to
the rising cost of gasoline. In 1973 and again in 1979, the Organization of
Petroleum Exporting Countries (OPEC) cut off the supply of oil to the United
States (see World Energy Supply: The Energy Crisis). In an effort
to conserve energy, the U.S. government began setting fuel economy standards, but
these often conflicted with the air pollution and safety standards it set in
the 1970 Clean Air Act. As American automakers struggled to meet these new
demands, Japanese imports skyrocketed. Japanese automakers, such as Toyota,
Nissan, and the relative newcomer Honda Motor Co. Ltd., also had the advantage
of better industry-government collaboration, newer factories, and a
comparatively cheaper, more disciplined labor force. By the end of the 1970s,
Japanese automakers were selling 2.5 million cars a year in the United States,
which amounted to about one of every four units sold.
U.S. automakers responded to Japanese
competition by retooling their factories to build smaller cars. They adopted
successful Japanese methods, known collectively as lean production. Examples of
this method of production include increased automation, quality control
(workers could stop the line to correct a problem, rather than marking it for
future correction), and smaller, so-called just-in-time inventories (parts were
delivered to workers on the line as they were needed, rather than in large,
bulky quantities).
Auto companies responded to the
fuel-consumption and air-quality demands by using previously developed
innovations. Diesel engines, catalytic converters, electronic fuel injection,
turbochargers, high-strength steels, aerodynamic bodies, front-wheel drive, and
other technologies were introduced to cut operating costs.
Revenues for U.S. automakers declined during
the late 1970s and early 1980s as the companies retooled to produce smaller
cars, and Chrysler in particular was on the verge of bankruptcy. Ford executive
Lee Iacocca moved to Chrysler and rescued it by changing the product line and
winning loan guarantees from Congress in 1980. The loans were eventually repaid
(seven years early), and Chrysler survived.
Japanese automakers shifted their emphasis
in the late 1980s to luxury automobiles, which competed directly against
established American and German luxury cars. Honda started its Acura division,
while Nissan introduced the Infiniti line and Toyota began producing its Lexus
brand of cars. These luxury automobile entries presented significant challenges
to existing luxury automakers, such as BMW and Mercedes. Both companies took
financial losses as a result, but they have since rebounded.
Industry developments of the late 1990s focused
on joint international ventures among the strongest companies and global
expansion into new markets. Globalization has made it increasingly difficult to
identify an automobile as the product of one company or country. General
Motors, for example, allied with Suzuki and Isuzu in Japan to sell several
products internationally under GM nameplates. In 1998 Daimler-Benz AG merged
with Chrysler Corporation but announced it would maintain Mercedes and Chrysler
as separate brands. Ford acquired the automobile division of Swedish vehicle
maker Volvo in 1999. A year later GM announced it would purchase a 20-percent
stake in Italian carmaker Fiat, which also manufactures cars under the Ferrari,
Lancia, and Maserati brands.
As the 21st century began, foreign
carmakers continued to make inroads in the worldwide and North American
markets. In 2000 foreign manufacturers outsold U.S. companies in worldwide
automobile sales, although sales of light trucks, including sport utility
vehicles (SUVs), kept U.S. companies dominant in total sales of vehicles.
In July 2007 foreign automakers
outperformed U.S. companies in the U.S. market for the first time ever. And in
the first quarter of 2007, GM for the first time lost its dominance in the
worldwide market to Toyota. Toyota sold 2.35 million vehicles during that
period compared with GM’s 2.26 million vehicles. Toyota was expected to
overtake GM as the world’s largest car and light truck maker by the end of the
year.
U.S. automakers continued to close plants in
the United States and lay off workers, while foreign car companies continued to
open plants in the United States. The domestic U.S. car industry also suffered
a setback when the European carmaker Daimler AG decided to divest itself of its
Chrysler unit, selling it to a private equity firm. Chrysler became the first
U.S. automaker to be privately owned.
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FUTURE AUTOMOBILE
INDUSTRY TRENDS
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At the start of the 21st
century, the trends of global trade and manufacturing flexibility continue.
Computerization continues to be a major part of auto design and manufacture, as
do the search for alternative fuels and more efficient automobile designs.
Computer-aided design tools are already used in
the automobile industry and will continue to save months of design time and
improve the quality of cars. In 1997 Chrysler designed its first paperless cars
(1998 and 1999 full-size sedans) using digital model assembly. In the
foreseeable future, the design engineer's computer-aided design might guide
computer-controlled machinery and reduce the need for blueprints. See also Computer-Aided
Design/Computer-Aided Manufacture.
Microelectronics will be more fully applied to
future automobiles and may become as commonplace as radios are today. On-board
systems are becoming available that enable drivers to find destinations through
voice-activated navigation or make cellular calls using the computer. These
computers can access the Global Positioning System (GPS) and display maps to
help drivers avoid congested freeways and find better routes to destinations. See
also Intelligent Transportation Systems.
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Alternative Fuel
Research
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Alternative energy sources for cars, such as
natural gas, electricity, ethanol, vegetable oil, sunlight, and water, will vie
for consumer use in the future. The Clean Air Act of 1990 and the National
Energy Policy Act of 1992 created significant new market opportunities for
alternative fuels by requiring government vehicles to use cleaner fuels.
Many vehicle manufacturers now convert
existing vehicles or offer factory-built natural gas vehicles (NGV) that burn
natural gas and cost less to run than conventionally fueled vehicles do. In
many countries, natural gas is cheaper and more available, so NGVs could become
popular in the future.
Corn-based gasohol (a combination of
unleaded gasoline and ethanol made from corn) reduces fossil energy use by 50
to 60 percent and pollution by 35 to 46 percent. More than 11 percent of all
automotive fuels sold in the United States are ethanol-blended, and that
percentage may increase in the future. Agricultural sources of fuel have
interested carmakers for decades. In 1997 the Veggie Van, a small motor home
powered by a diesel motor that runs on a fuel made from used and new vegetable
oil (called biodiesel), took a 16,000 km (10,000 mi) journey. The Veggie Van
reached speeds up to 105 km/h (65 mph) and achieved a gas mileage of 10.5 km
per liter (25 mi per gallon). Some fuel for the Veggie Van was made from used
restaurant fryer oil, and its exhaust smelled like french fries.
Many large automakers are now adapting fuel
cell technology for automobiles. Fuel cells are cleaner, quieter, and more
energy efficient than internal-combustion engines. Fuel cells combine hydrogen and
oxygen electrochemically without combustion to supply electricity. Fuel cell
engines will likely run on conventional gasoline, but with a fraction of the
emissions of a normal engine. The Ford Motor Company announced in December 1997
that it was investing $420 million in fuel cell research.
From 1995 to 1997 Mazda Motor
Corporation experimented with a low-pollution hydrogen rotary engine vehicle,
which burns hydrogen fuel that will not emit carbon dioxide. Japan reportedly
aims to have a hydrogen fuel distribution network in place to support that
fuel’s use in transportation by 2010. Scientists are also trying to reduce
emissions of existing vehicles and are testing a device that uses electrons to
nullify the noxious components of diesel exhaust.
Electric cars, powered by an electric motor
and batteries, provide drivers with another alternative. To recharge the
batteries, operators plug the car into a 120-volt or 240-volt outlet. A typical
electric car averages 60 to 200 km (40 to 100 mi) per charge. Since most car
trips are less than 120 km (75 mi), electric cars can help meet the needs of
many two- or three-car families. In 1996 GM debuted the EV1, an emission-free
electric car that seats two. The EV1 has been slow to catch on, however. Its
batteries run out frequently and require several hours to recharge. Moreover,
pioneering electric technology makes the EV1 expensive, especially when
compared with conventional gasoline-powered cars of comparable size.
Hybrid automobiles combine an electric motor
with batteries that are recharged by a small gas- or diesel-powered engine. By
relying more on electricity and less on fuel combustion, hybrids have higher
fuel efficiency and fewer toxic emissions. Several automakers have experimented
with hybrids, and in 1997 the Toyota Motor Corporation became the first to
mass-produce a hybrid vehicle. The first hybrid available for sale in North
America was offered by Honda Motor Company in 1999. In 2004 the Ford Motor
Company became the first U.S. automaker to produce a hybrid vehicle. The Ford
Escape Hybrid, introduced for the 2005 model year, was both the first hybrid
made in the United States and the first hybrid sport-utility vehicle (SUV).
Future vehicles will likely be made of different
materials. For example, improved plastics or composites will reduce car weight,
provide fuel economy, allow for smoother surfaces and more complex shapes, and
better manage crash energy. As fuel costs increase and the cost of composite
body construction decreases, widespread use of plastics could follow. Ceramics,
which cut weight and thus improve fuel economy, will increase operating
efficiency in applications such as pistons and turbocharger rotors.
Safety will continue to be a concern
for automakers. Airbags have saved numerous lives, but they have also been
responsible for injuries and deaths of small children, due to the forceful
action of the airbags when they inflate. New rules from the U.S. Department of
Transportation in 1997 allowed some consumers to remove the airbags or to
disable them when small children are riding in front passenger seats. Another
point of controversy concerns the recent popularity of large sport-utility
vehicles (SUVs) and pickup trucks. When an ordinary car collides with a truck
or SUV, studies show that the car passengers are much more likely to suffer
injury or death than are the occupants of the larger vehicles. SUVs and trucks
are heavier and higher off the ground than ordinary cars and frequently run
over the bumpers of ordinary cars during collisions. Industry representatives,
government agencies, and insurance groups are currently working on these
problems to create practical solutions and increase safety on the road.
The auto industry of the future
will be characterized by vanishing boundaries: between countries and companies,
between suppliers and manufacturers, between engineering fields, between
departments (that is, marketing, design, and finance), between labor and
management, and between automotive and consumer electronics. Companies that
rapidly adapt to unpredictable and dynamic events will prevail.
