I. Industry History and Development
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 Ford 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.
Development of the automobile was retarded for decades by over-regulation: speed was limited to 4 mph (6.4 kph) and until 1896 a person was required to walk in front of a self-propelled vehicle, carrying a red flag by day and a red lantern by night. The Stanley brothers of Massachusetts, the most well-known American manufacturers of steam-driven autos, produced their Stanley Steamers from 1897 until after World War I.
The development of the automobile was accelerated by the introduction of the internal-combustion engine. Probably the first vehicle of this type was the three-wheeled car built in 1885 by the engineer Karl Benz in Germany. Another German engineer, Gottlieb Daimler, built an improved internal-combustion engine c.1885. The Panhard car, introduced in France by the Daimler company in 1894, had many features of the modern car.