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The first carriage-sized automobile suitable for use on existing wagon roads in the United States was a steam-powered vehicle invented in 1871, by Dr. J.W. Carhart, a minister of the Methodist Episcopal Church, in Racine, Wisconsin.
From the experimental cars of Daimler and Benz it was indeed a short step to industrial production -- but not in Germany. Daimler-Benz concedes that the first car manufacturers in the world were French -- Panhard & Levassor in 1889, followed by Peugeot in 1891.