Development of automobile industry in the united states Research Paper

Development of automobile industry in the united states - Research Paper Example May 2011 brought Volkswagen’s manufacturing plant to America. In addition to manufacturing plants, several manufacturers have opened transmission and engine plants that are working in research and development, design, and testing in the United States. The whole automotive industry and dealership amounts to nearly 3.5 percent Gross Domestic Products (GDP) of the United States. By the end of 2012, auto manufacturers and related industries directly employed 786,000 people (SelectUSA). In addition to manufacturers, there is an extensive network of auto parts suppliers who produced $225.2 billion (4 percent of U.S. manufacturing) in shipments during 2012. According to the study conducted by Motor & Equipment Manufacturers Association and Information Handling Services, overall automobile industry’s direct employment generation was 3.62 million while indirect influence was the creation of jobs and economic wellbeing in comparison to any other sector (SelectUSA). This research paper examines U.S. automobile industry, its history and development, and finds that it the backbone of manufacturing industry, therefore, plays a vital role in strengthening American economy. During 1900 and 1930, Detroit experienced record growth in comparison to any other city in the United States. The reason behind this unparalleled growth was concentration of auto industry around Detroit, which became the largest industry in the U.S. by 1929(Davis ix). The number of auto firms grew in a gradual manner from 1895 to 1907, reaching at its peak at 82 in 1907. For the next three years, the number of entrants remained high, but after that it dropped sharply. With an average number of 15 firms every year from 1911 to 1922, it fell to only 15 firms from 1923 to 1966. After a few early years, the auto industry’s exit rate was more than 10 percent; moreover, by the year 1910, the number of exit was more than the number of entries. Excluding the two year period from