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Cars and Culture: The Auto Industry’s Impact on US Economy and Businesses

Posted in Posts, and Syllabus Schedule

It’s hard to understate the growth that the automotive industry experienced throughout the twentieth-century. The industry was one of the most important to the American economy as a whole, as the health of the auto industry was a good indicator of the health of the entire US economy. However, what can sometimes be over looked is the impact that the auto industry had on growth in other industries and new businesses that were founded and then flourished as a result of the presence of the automobile. As cars became more common and highways were built, the world became smaller and life became faster paced. This led to the development of fast food franchises with drive-thrus that allowed customers to purchase food without even exiting their vehicle. Similarly, drive-in movie theaters offered movie goers a similar experience, and allowed the owners of these theaters to reduce costs in terms of building and maintaining a theater. Hotels and motels sprung up across the country to accommodate travelers who needed a place to stay overnight while making long road trips or while on vacation.

As much as developments to the automobile were revolutionary in determining the shape of American culture in the twentieth-century, the internet marks a similar revolutionary change in culture. Consumers continue to make purchases online in constantly increasing numbers. New types of businesses that cater to online consumers have formed and some businesses will have to change their models or the way they provide services in order to survive the country’s new technological climate. Certain sectors within the automotive industry will need to make changes as well. While dealerships provide a unique service that the internet can’t by allowing potential buyers to test drive a car and experience it first hand, the number of cars bought online is also increasing. Perhaps someday dealerships will be reduced to facilities for potential car buyers to test cars they want to buy, and the act of purchasing a car itself will move online. This could make a significant change in the market for cars, as consumers could order cars directly from manufacturers, and circumvent the role of dealerships in the purchasing process.


  1. gjeong

    There are a number of significant effects of automotive industry in the U.S. economy. One of the major ones, I think, is the expansion in the use of “credit.” Back in the days, car companies helped some customers to pay in several payments to buy medium-priced car (something like financing.) This use grew as the demand for cars increased. This significantly affected the economy.

    May 8, 2013
  2. We can point to a multitude of technological innovations, including the spread of electricity and the logistics revolution, from local delivery trucks to long-haul trucks and container shipping feeding into warehouses. The latter is certainly automotive, and affects lots of facets of our life, including the ability to eat well at low cost (at least if you cook for yourself). Indeed, without the availability of this vehicle-driven logistics revolution, internet shopping would be of much less value.

    As to cars, to date no one has been able to figure out ways to speed up the gap between ordering and deliveriing a car sufficient to lessen the value of dealers as holders of inventory. You can order a car entirely (or almost entirely) over the internet (at some point you still need to physically sign a few documents). You can specify all the options you wish. And then wait – unless there’s a car that matches your target vehicle on some dealership lot. For cars not produced in NAFTA that can be a long wait.

    Purchasing habits vary across countries; in some the paperwork takes days, so no one expects to be able to drive away with their car, even if it’s there in front of them at the dealership. However, that’s not the case in the US. But you might ask the next time you visit a dealer what proportion of their sales are ordered from the factory rather than from inventory (which in practice includes that of rival dealers, as swaps of cars among dealers are a normal part of the business).

    May 14, 2013
  3. cookg15

    The impact that increased internet purchasing as a whole has had on the auto industry is interesting. While consumers might be travelling less to the stores themselves to buy goods, commercial trucks and other vehicles are being employed to help ship goods across the country. In a way, the internet and decrease in on-site physical purchase of goods has ironically stimulated some sectors of the automotive industry.

    Furthermore, the ability to exchange information has been revolutionized and has also changed the way people interact. As you mentioned during my presentation, cars allowed people’s dating pool and friend group to increase, as people could interact over a larger area. Instead of being confined to one’s own town, cars allowed people to drive further away to meet new people and build relationships. The internet has taken this even further by allowing someone in Washington D.C. to communicate with someone in Los Angeles or across the globe in China, shrinking the world even further.

    May 18, 2013

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