The first prototypes of automobiles came into being in late 19th century. North America, Europe, Asia together have contributed significantly to production and organization of automobile industry throughout the 20th century. These innovation have made the automobile industry competitive. The automotive industry is dynamic and large. It provides jobs to many people especially in industrialized economies, approximately 1 in 10 people are employed in this industry in industrialized nations. Automotive industry has vast linkages to other sectors therefore developing economies always look upon at this industry as the engine of growth. Development in this sector improves the future prospects of developing nations.
The automobile industry has moved through three stages over the century: (1) craft production (1890-1908), in which dozens of small enterprises competed to establish a standard process of manufacturing automobiles and also standard product; (2) mass production (1908-1973), by Henry Ford’ assembly lines, which became the standard operational mechanism of the industry; and (3 ) lean production (1973–present), which was initially developed at Toyota in 1950s , and which introduced with it a revolutionary management process of product-development and production. Before 1920s a large number of firms existed in the industry. The firms were competing to make a place for themselves in the industry. Till 1920s most of the firms started making exits from the industry. Setting the industry standard for production, Ford took over the market place. But this left no scope for innovation. In the 1920s, General Motors improved and made changes on Ford’s assembly line process.