Impact of the Automobile on the Economy

It would be impossible to list all of the specific effects of automotive production in our economy, but these are especially significant. In 1916, the marketing of automobiles stimulated a great expansion in the use of "credit." Installment buying existed before the automobile but only for a limited range of products. Manufacturers of medium-priced cars allowed customers to pay in several payments to help jostle the competition of the low-priced Model T. Installments became a universal practice in all countries in the purchase of automobiles, and it accustomed people to buying other durable consumer goods in the same way.

Motor hotels or motels are specifically constructed for the automotive world. They are designed to provide overnight lodging for cross-country drivers. The first motels started being made in 1925 and they can mainly be found by busy interchanges, the outskirts of towns, or near airports. All motels have free parking near the rooms, which allow guests to reach their rooms directly. Most motels do not require reservations because most traveling motorist do not exactly know where they will stay that night. For motorists' convenience, motels have large signs that tell whether or not there are any vacancies. Nowadays, one sees more motels then hotels.

Then there was a striking development of drive-in businesses, again first in the United States but spreading rapidly everywhere else. The Pig Stand in Dallas, Texas became the first drive-in restaurant in 1921 when they modified their parking lot to allow people to order their food and eat without leaving their cars. Then came drive-in-movies, drive-through banks, and convenience stores. In 1946, 7-11 opened and became the first extended hours convenience store open for local homeowners and cross-country travelers.

Ray Kroc took the assembly line idea into the food industry when he started opening multiple McDonalds fast food in 1948. This triggered something that caused a major commercial growth in our nation's food industry. Fast food and other chain restaurants started opening everywhere in the world.

For such countries as the United Kingdom, Japan, France, Italy, Sweden, and Germany, motor vehicle exports are essential to maintaining the balance of international trade. The automotive industry has become a vital element in the economy of industrialized nations: motor vehicle production and sales are one of the major indicators of the status of the economy in those countries. The effect of motor vehicle manufacturing on other industries is very considerable as well. Almost one-fifth of US steel production and nearly three-fifths of its rubber output go to the automotive industry, which is also the largest single consumer of machine tools. Moreover, the special requirements of automotive mass production have had a big influence on the design and development of highly specialized machine tools and have encouraged technological advances in petroleum refining, steel making, paint and plate-glass manufacturing, and other industrial processes.

Related Links

To find more information on the impact of the automobile on the economy, please visit the following web site:

introduction | history | timeline | impact on commerce | negative impacts | suburbia | automobile simulation | suburbs simulation