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Impact of the Automobile on the Economy

It would be impossible to list all of the specific effects of automotiveproduction in our economy, but these are especially significant. In1916, the marketing of automobiles stimulated a great expansion inthe use of "credit." Installment buying existed before the automobilebut 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 becamea universal practice in all countries in the purchase of automobiles,and it accustomed people to buying other durable consumer goods inthe 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 theycan mainly be found by busy interchanges, the outskirts of towns, ornear airports. All motels have free parking near the rooms, whichallow guests to reach their rooms directly. Most motels do not requirereservations because most traveling motorist do not exactly knowwhere they will stay that night. For motorists' convenience, motelshave 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, againfirst in the United States but spreading rapidly everywhere else. ThePig Stand in Dallas, Texas became the first drive-in restaurant in1921 when they modified their parking lot to allow people to ordertheir food and eat without leaving their cars. Then came drive-in-movies, drive-through banks, and convenience stores. In 1946, 7-11opened and became the first extended hours convenience store openfor local homeowners and cross-country travelers.

Ray Kroc took the assembly line idea into the food industry when hestarted opening multiple McDonalds fast food in 1948. This triggeredsomething that caused a major commercial growth in our nation'sfood industry. Fast food and other chain restaurants started openingeverywhere in the world.

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For such countries as the United Kingdom, Japan, France, Italy,Sweden, and Germany, motor vehicle exports are essential tomaintaining the balance of international trade. The automotiveindustry has become a vital element in the economy of industrializednations: motor vehicle production and sales are one of the majorindicators of the status of the economy in those countries. The effectof motor vehicle manufacturing on other industries is veryconsiderable as well. Almost one-fifth of US steel production andnearly 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 abig influence on the design and development of highly specializedmachine tools and have encouraged technological advances inpetroleum refining, steel making, paint and plate-glass manufacturing,

and other industrial processes.

Economic significance of the automotive industry

The automotive industry is an important global driver of growth,income, employment, and innovation. The automobile enables adegree of flexibility and mobility that was undreamed of a centuryago. Consequently, the automotive sector and therefore our

company as well impacts global economic activity in a variety ofways.

In Germany, the automotive industry is one of the biggest employers,accounting for more than 14 percent of all workers in manufacturing.Employees work not only at the major automakers but also at manyfamily-run and medium-sized companies in the supplier industry. Theautomotive industry accounts for just under 8 percent of totalindustrial added value in Germany. This percentage is unusually highby comparison with other industrialized countries. The significance ofexports has grown continually in recent years. Today more thanthree-fourths of the passenger cars produced in Germany areexported. Germany is the worlds fourth-largest auto-producingcountry after Japan, China, and the U.S.

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In 2011 the sectors gross investments in plant and equipment wereover 10 billion, which amounts to approximately a fifth of Germanystotal industrial investments. Over the past ten years, more than 100billion in total was invested in Germany. Over 20 billion is investedannually in research and development by manufacturers andsuppliers in the automotive industry more than any other sector.That amounts to about one third of the total R&D expenditures inGermany (and 40 percent of the expenditures by the manufacturingsector). On average, ten patent applications a day come from theautomotive sector, especially in the area of environmentally friendlyvehicle technologies. The Daimler Group invested 5.634 billion inR&D activities worldwide in 2011 (2010: 4.849 billion).

Above and beyond our core business the production and sale of

automobiles Daimler also benefits the economy, science, andsociety in other ways. These include the Groups provision of financialsupport to community projects and its promotion of infrastructureservices, for example by building its own sports and athletic centers.

http://sustainability.daimler.com/reports/daimler/annual/2012/nb/English/3560/economic-significance-of-the-automotive-industry.html