automobile industry

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. In 2014, Fiat announced plans to purchase all of Chrysler's shares.

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.

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The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.

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