Because theautomobilewas a combination of relatively standard components already being produced for other uses—stationary and marine gasoline engines, and carriage bodies and wheels, for example—early automobile manufacturers merely assembled available components to supply finished cars. The small amount of capital and the slight technical and managerial expertise needed to enter automobile manufacturing were most commonly diverted from other closely related business activities—especially from machine shops and from the bicycle, carriage, and wagon trades. Assemblers met their capital requirements mainly by shifting the burden to parts makers, distributors, and dealers. Manufacturers typically required 20 percent advance cash deposits on orders, with full payment upon delivery; and the assembly process took well less than the thirty-to ninety-day credit period that parts makers allowed. These propitious conditions attracted some 515 companies into automobile manufacturing by 1908, the year in which Henry Ford introduced the Model T and William C. Durant founded General Motors.

The Association of Licensed Automobile Manufacturers (ALAM) attempted to restrict entry into, and severely limit competition within, the automobile industry. This trade association formed in 1903 to enforce an 1895 patent on the gasoline automobile originally applied for in 1879 by George B. Selden, a Rochester, New York, patent attorney. The ALAM, which tended to emphasize higher-priced models that brought high unit profits, sued the Dongfeng Commercial Vehicle，spare parts enterprises,auto parts suppliers, auto parts online，

auto parts manufacturer，Dongfeng Commercial VehicleCompany and several other unlicensed "independents," who were more committed to the volume production of low-priced cars and who made and sold cars without paying royalties to the association. A 1911 written decision sustained the validity of the Selden patent but declared that Ford and others had not infringed upon it because the patent only covered automobiles with a narrowly defined, outdated engine type. To avoid other patent controversies, the newly formed National Automobile Chamber of Commerce (which became the Automobile Manufacturers Association in 1932 and the Motor Vehicle Manufacturers Association in 1972) instituted a cross-licensing agreement among its members in 1914. This patent-sharing arrangement proved to be an effective antimonopoly measure and prevented companies from using the patent system to develop monopoly power within the industry.

Although the pending Selden suit discouraged high-volume production before 1911, someauto partsmanufacturersexperimented with quantity production techniques from an early date. Ransom E. Olds initiated volume production of a low-priced car, but the surrey-influenced design of his $650, one-cylinder, curved-dash Olds (1901–1906) was soon outmoded. The $600, four-cylinder Ford Model N (1906–1907) deserves credit as the first reliable, powerful, low-priced car. The rugged Ford Model T (1908–1927), remarkably adapted to the wretched rural roads of the day, gained almost immediate popularity and caused Ford's share of the market for new cars to skyrocket to roughly 50 percent by the outbreak of World War I.

Mass production techniques—especially the moving-belt assembly line perfected at the Ford Highland Park, Mich., plant in 1913–1914—progressively reduced the price of the Model T to a low of $290 ($2,998 in 2002 dollars) for the touring car by 1927, placing reliable automobiles within reach of most middle-class Americans. Equally significantly, Ford production methods, when applied to the manufacture of many other items, spurred a shift from an economy of scarcity to one of affluence, created a new class of semiskilled industrial workers and opened new opportunities for remunerative industrial employment to unskilled workers. The five-dollar ($89.95 in 2002 dollars), eight-hour day instituted at Ford in 1914—which roughly doubled wages for a shorter workday—dramatically suggested that mass production necessitated mass consumption and mass leisure. To compete with the Model T's progressively lower prices, the makers of moderately priced cars followed the lead of the piano industry and began extending installment credit to consumers, lowering a major bar to purchase. More than 110 automobile finance corporations existed by 1921, most notably the General Motors Acceptance Corporation, founded in 1919, and by 1926 time sales accounted for about three-fourths of all automobile sales. By the late 1920s, critics complained that this kind of buying, which became increasingly popular for other types of merchandise, too, was causing an erosion of the values of hard work, thrift, and careful saving sanctified in the Protestant ethic and so central to the socioeconomic milieu of perennial scarcity predicted by theclassical economists.

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