Economics and Business

Auto Industry

Why did the auto industry boom in the postwar era?

In the years following World War II (1939–45), auto ownership in the United States soared from 27.5 million registered vehicles in 1940 to 61.5 million in 1960. Americans had resumed their love affair with the automobile, inextricably linking the car with the U.S. history of the postwar era. Many factors combined to bring about the automobile’s widespread popularity.

During World War II the car manufacturers curtailed auto production, converting factories to military production and turning out some $29 billion in materials, including trucks, jeeps, tanks, aircraft, engines, artillery, and ammunition. With the conflict ended, automakers stepped up production to fulfill the unmet demand of the war years, and soon found themselves working to meet new demand, created by an increase in consumer spending and the growth of the suburbs. The overall prosperity of the late 1940s and 1950s produced a new spirit of consumerism: Government regulations (brought about through the efforts of the labor unions) resulted in increased wages and improved benefits—meaning Americans, for the most part, had more disposable income. Advertisers took advantage of the new medium of television to reach wide—and eager—audiences. The housing industry, largely dormant during World War II, built new neighborhoods around the edges of American cities, making the automobile a necessity rather than a luxury. The Big Three (GM, Ford, and Chrysler) increased capacity to meet the tremendous demand, setting new records for production in 1949 and 1950. By 1960 more than three out of every four American families owned at least one car. The infrastructure raced to keep pace with a nation on wheels. Superhighways were built (covering some 10,000 miles of road); motels and fast-food restaurants went up along roadsides; and shopping centers were built outside city centers. While imports would challenge the American automakers in the decades to come, it was the U.S. manufacturers that defined the postwar era.


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