By the early 1900s, gasoline cars started to outsell all other types of motor vehicles. The market was growing for automobiles and the need for industrial production was pressing.

The first car manufacturers in the world were French companies Panhard & Levassor (1889) and Peugeot (1891). Daimler and Benz started out as innovators who experimented with car design to test their engines before becoming full car manufacturers. They made their early money by licensing their patents and selling their engines to car manufacturers.

The First Assemblers

Rene Panhard and Emile Levassor were partners in a woodworking machinery business when they decided to become car manufacturers. They built their first car in 1890 using a Daimler engine. The partners not only manufactured cars, they made improvements to the automotive body design.

Levassor was the first designer to move the engine to the front of the car and use a rear-wheel drive layout. This design was known as the Systeme Panhard and quickly became the standard for all cars because it gave a better balance and improved steering. Panhard and Levassor are also credited with the invention of the modern transmission, which was installed in their 1895 Panhard.

Panhard and Levassor also shared the licensing rights to Daimler motors with Armand Peugot. A Peugot car went on to win the first car race held in France, which gained Peugot publicity and boosted car sales. Ironically, the "Paris to Marseille" race of 1897 resulted in a fatal auto accident, killing Emile Levassor.

Early on, French manufacturers did not standardize car models as each car was different from the other. The first standardized car was the 1894 Benz Velo. One hundred and thirty-four identical Velos were manufactured in 1895.

American Car Assembly

America's first gas-powered commercial car manufacturers were Charles and Frank Duryea. The brothers were bicycle makers who became interested in gasoline engines and automobiles. They built their first motor vehicle in 1893 in Springfield, Massachusetts and by 1896 the Duryea Motor Wagon Company had sold thirteen models of the Duryea, an expensive limousine that remained in production into the 1920s.

The first automobile to be mass produced in the United States was the 1901 Curved Dash Oldsmobile, built by the American car manufacturer Ransome Eli Olds (1864-1950). Olds invented the basic concept of the assembly line and started the Detroit area automobile industry. He first began making steam and gasoline engines with his father, Pliny Fisk Olds, in Lansing, Michigan in 1885.

Olds designed his first steam-powered car in 1887. In 1899, with his experience in making gasoline engines, Olds moved to Detroit to start the Olds Motor Works with the goal of producing low-priced cars. He produced 425 "Curved Dash Olds" in 1901, and was America's leading auto manufacturer from 1901 to 1904.

Henry Ford Revolutionizes Manufacturing

American car manufacturer Henry Ford (1863-1947) was credited with inventing an improved assembly line. He formed the Ford Motor Company in 1903. It was the third car manufacturing company formed to produce the cars he designed. He introduced the Model T in 1908 and it became a big success.

Around 1913, he installed the first conveyor belt-based assembly line in his car factory at Ford's Highland Park, Michigan plant. The assembly line reduced production costs for cars by reducing assembly time. For example, Ford's famous Model T was assembled in ninety-three minutes. After installing the moving assembly lines in his factory, Ford became the world's biggest car manufacturer. By 1927, 15 million Model Ts had been manufactured.

Another victory won by Henry Ford was the patent battle with George B. Selden. Selden, who held a patent on a "road engine." On that basis, Selden was paid royalties by all American car manufacturers. Ford overturned Selden's patent and opened the American car market for the building of inexpensive cars.