Transportation Deployment Casebook/Passenger Vehicles

The invention and introduction of the automobile changed the world forever. Today it is hard to imagine what life would be like without modern vehicles. Our commutes to work, vacations, foods and goods would be drastically changed. Having a personal vehicle is often part of the imagined “American Dream” and is a necessity in most American’s lives. This mode of transportation was introduced to the masses in the early 1900s and has grown to become a part of the daily lives of Americans.

The automotive industry took off in the early 1900’s but has slowed in the 2000’s. This mode of transportation has recently reached the maturity phase. By looking at the number of passenger vehicles in the United States we will analyze and discuss the life cycle of this transportation mode including its birth, growth and mature phases. We will identify these phases and comment on what was caused and affected by these changes in passenger vehicle prevalence.

Birth
In the 1800s transportation for an individual was limited. Most people walked or used horses for their day to day travels, and carriages and sailing ships were used for longer distance trips. In the mid 1800’s steam boats were introduced to the United States. This decreased the travel time of goods and individuals and helped create powerful port cities along the United States waterways. Trains and railroads were also invented and implemented in this time. Railroads were initially used for passenger travel and cut not only the travel time of a passenger’s trip but the risk involved in taking the trip. Crossing the country now took days instead of weeks and involved little exposure to the wilderness and natural elements. Although both were monumental innovations the appearance of the automobile in the early 1900’s may be the biggest change the world has seen in transportation.

The automobile can be defined as any self propelled vehicle. Although horse powered vehicles existed and wind powered land vehicles had been designed, the first documented automobile using this definition was created in 1796. The vehicle, designed by Nicolas-Joseph Cugnot, was very large, steam powered and could travel up to 6 km/hr. Shortly after this, gasoline and electric vehicles were developed. These technologies evolved and were used on roads up until the late 1800’s.

The automotive industry took off in the 1900’s and the United States became the world leader for most of the twentieth century. In the beginning automobiles were very difficult to make and many companies who entered this industry did not last long. Many companies assembled vehicles from parts made by different manufacturer and produced very few vehicles during this time. In 1913 the Ford motor company developed the assembly line approach to manufacturing cars which greatly reduced the labor and time needed to manufacture a vehicle. This in turn reduced the cost of the final product, from $950 for a Ford Model T in 1909 to $360 in 1916, and madeowning a vehicle obtainable for the average American.

Personal vehicles were enticing to the average American for a number of reasons. Current railroads could only go where tracks had been laid and lacked the freedom that an automobile allowed. Different transit options that had developed, such as the street car, held a similar constraint of only operating on a specified route or electric track. Both cost a trip fare and operated on a set schedule which may not work for an individual. A vehicle allowed for more freedom for when and where a motorist wanted to travel. A vehicle also allowed an individual to purchase a cheaper home on the periphery of a city and commute for work. This created modern suburbs.

Although roads and turnpikes existed for carriage use before 1900, paved roads were not prevalent in the United States until the introduction of the automobile. With the introduction of railroads, roads were used even less and many were not maintained. The growth of the road system was dependent on the growth of the automobile industry and vice versa in the early 1900’s. More roads allowed better access to more locations for the automobile consumer and more automobiles justified more investment into the road system. Before this time states and cities were responsible for the financial aspects of building and maintaining a road because they were the ones who benefited from them. By 1920 all states had some type of road organization that saw to the financing, building and maintaining of a road system. The federal government took an interest in a national road system in the 1910’s when they passed the Post Office Appropriation Act and the Federal Aid Road Act which organized a national system and designated funding. In 1956 the Federal Aid Highway Act and the Highway Revenue Act designated funding for an upgraded national road system. The government was interested in such a system to move troops and other defenses across the nation quickly. This road network became the current Interstate Highway System.

Growth
The United States Army made use of automobiles during World War I which increased demand and pushed innovation. After the assembly line method of production became standard other companies became involved in the market. This gave the consumer more variety to choose from which increased competition. The 1920’s saw many innovations in automobile technology. Mechanical brakes were installed on vehicles, four wheel drive was created and safety glass that was harder to break was used in vehicles. Passenger comfort was also considered when upgrading a vehicle. By the end of the 1920’s most vehicles were enclosed and some even had heaters. Because of these types of innovation a new class of luxury cars identified itself above standard vehicles as a status symbol for some. Companies needed to come up with new innovations such as this to compete for the growing demand.

After World War I the great depression hit which caused smaller companies to close down. Because of the large investments needed to get an automobile plant and assembly line running many large companies became the front runners of the industry. The 1920s and 1930s was when the Big Three in the United States, Ford, General Motors and Chrysler, began to dominate the market. Ford was already a powerhouse in the automobile industry. During this time Chrysler took over multiple companies including Maxwell Motor Company and the Dodge Brothers Company. General Motors became more efficient by reorganizing it management structure and taking over Buick, Cadillac and other smaller firms.

The market still saw innovation in the types of automobiles being offered. The body of vehicles became more designed during the 1930’s and aerodynamics where considered. Car radios, automatics transmission and larger engines, up to a V-16, were also on the market in the 1930’s.

Both during and after World War II the economy bounced back from the great depression and consumer demand for personal vehicles increased. With the new interstate highway system in place there were few constraints on where a motorist could travel. The market seemed almost as big as how many drivers were in the United States. Early vehicles were wearing out and some consumers had already “used up” multiple vehicles. The used car market began.

A few other factors influenced the growth of the number of passenger vehicles in the United States during the beginning of growth period. Using credit and payment plans to finance a vehicle were used early on as a way to make the personal automobile more affordable for the masses. In an example of a positive feedback loop, many commercial businesses were being designed to be accessed by passenger vehicles such as malls and drive through restaurants. People would buy vehicles to utilize these businesses thus increasing the demand for the type of business.

The amount of growth begins to decrease in the 1960s. This is in part due to the fact that those who needed a personal vehicle had probably already purchased a vehicle. There were less first time vehicle owners than before. The Vehicle Air Pollution and Control Act of 1965 set a limit for automobile emissions. This and other safety requirements for vehicles may have caused an increase in cost due to the added features which would lessen the number of vehicles sold. The 1970’s and 80’s saw an economic depression in the United States that would also slow the consumption of personal vehicles as individuals look for cheaper modes of transportation. Many of the countries automakers were affected by the economic troubles and downsized their plants and employees. Some needed to be bailed out by the federal government to continue to function in the US market. The last big innovation in passenger vehicles occurred in the 1980s. The creation of computers allowed this technology to be used in vehicles. Passenger vehicles now had automated computer systems built in that could monitor vehicle functions and aid technicians in diagnosing malfunctions.

Maturity
The market reached maturity in the mid 1990’s when the rate of growth of number of passenger vehicles slowed considerable. Although small innovations in aesthetics, comfort and safety features are still being developed, few innovations affect the entire industry such as those during the birth and growth phase. Some industry changing technologies are being researched within the market of passenger vehicles, such as long lasting electric cars and high fuel efficient vehicles, but no other mode of transportation looks to be competing with the passenger vehicle in the near future.

If these new technologies were perfected and made efficient enough to compete with the combustible engine, a new growth segment of the mode may occur. The costs, both initial and operational, of the vehicle containing the new technology would have to be comparable to current combustible engines. This could also occur if the world runs out of fossil fuels and then a new or modified mode would arise to take the passenger vehicles place regardless of cost.

The companies in the automotive industry are moderately set. No new companies have entered the market in decades, although foreign made vehicles are competing now more than ever with American products. The Big Three are still the same as in the 1930s, and even though they have had some economic troubles, the government helps support them because their collapse would have large negative effects on the national economy.

“Lock-in” has constrained adaptations in the passenger vehicle. Road design is highly regulated on a national level. The design of the standard road sets a vehicles width, speed and other design features. Federal laws on safety and emission standards have made some vehicle features standard that may not have been present without the requirement laws. Consumer expectations also create a type of “lock-in”. If a new vehicle or feature varies too widely from the current alternative, consumers may be hesitant to switch to the new product. New features may also cause issues regarding the maintenance of a vehicle if a mechanic is unfamiliar with the technology.

Data


The data from this analysis comes from two sources. The 1960 to 2008 data comes from the Research and Innovative Technology Administration of the Bureau of Transportation Statistics. This is a federal government organization that collects and distributes different transportation statistics. The 1895 to 1929 data comes from a picture of a document, possible an almanac, which lists the number of passenger cars. This picture is posted on railsandtrails.com, a small website made by a transportation enthusiast. Although not knowing the source of this data may cause some uncertainty of the results, the data fits the expected curve formed by the Bureau of Transportation Statistics data. Accurate data could not be found for 1940 or 1950. It is estimated that the number of passenger vehicles in the United States still grew during these times although some lasting effects of the Great Depression may have slowed the market in the 1940s.

Method


The fit line was found using the equation Passenger Vehicles=K/(1+e^(-b(t-t_0)) ) where K is the saturation level, b is a coefficient, t is the year and t0 is the point of inflection on the curve. An initial estimate K,b, and t0 were chosen and then the Solver analysis in Microsoft excel was used to change K and b to minimize the difference in the found and calculated number of vehicles. The inflection point to was estimated to be around 1962. Once solver had been ran the values for K and b were about 137 million and -.093 respectively.

A regression analysis was performed using Microsoft Excel. This analysis found that R2 was .96 which means that the fit line is a good fit to the actual data. There are two points on the graph that a discrepancy between the fit and data line can be seen. Again, accurate data from 1940s and 1950s could not be found which may cause the difference seen at the beginning of the growth period. The actual data exceeds the estimated data in the late 1980s and early 1990s on the chart and varies some from there. This is where the mode reaches maturity. This may be due to some settling into maturity. The economy was good during this time which may have spurred market growth. The drop could be due to the increasing awareness of environmental issues with vehicle emissions.

Birth
By looking at the chart Number of Passenger Vehicles in the United States, the birth phase can be seen from 1895 to about 1920. Although the automobile existed before 1895, they were not produced for consumers in the United States until about this time. During this time the market for vehicles was being established as people became accustom to a technology that was unlike anything they had seen. Paved roads were being built which would allow a vehicle owner to travel to more places.

Growth
The growth begins a bit before 1920 which coincides with the creation of the assembly line and subsequent drop in price of the automobile making it a commodity priced for the average American. The growth continues to be positive until the early 1960s and then slowly decreases until the 1990’s when there is a drastic decrease in growth. Many factors contributed to the growth of the number of passenger vehicles in the United States at this time. During this time major innovations in automobile technology were invented. Personal automobiles were being marketed to Americans successfully as a must have item. The middle class in the United States was getting larger and moving outside of the city to where a vehicle was one of few options for transportation needs.

Maturity
The mature phase seems to start around 1990. During this time the market had become saturated. Most people who wanted vehicles had them, and no drastically new innovations occurred which made previous models obsolete. New vehicles were still being sold when new drivers came of age and old vehicles wore out or were destroyed but at a much slower rate than before. Household incomes have still not increased enough to make owning multiple vehicles an option for most Americans.

It is doubtful that the number of passenger vehicles will see a decay phase. Americans have become dependent on personal vehicles and many would consider it a large cut in their standard of living to do without. Unless a new mode of transportation is created, passenger vehicles are probably here to stay in the United States.

Conclusion
Using the fit equation Passenger Vehicles=K/(1+e^(-b(t-t_0)) ) as  Passenger Vehicles=137000000/(1+e^(-.0925(t-1962)) ) provides a good fit for the number of passenger vehicles in the United States, shown by an R2 value of .96. The data shows a mature mode of transportation with a birth, growth and mature phase. This shows that passenger vehicles have probably completed their life cycle. Many real life events in the United States throughout the century support this fact including changes in production, cost and distribution. Unless enormous technological advances in passenger vehicle technology or the world runs out of fossil fuels, it is likely that the number of passenger vehicles in the United States will stay relatively steady for years to come.