To maintain unit sales, General Motors executive Alfred P. In 1924, the American automobile market began reaching saturation point. Ending the Depression Through Planned Obsolescence, by Bernard London, 1932 History The 1923 Chevrolet is cited as one of the earliest examples of annual facelifts in the car industry because it had a restyled body covering what essentially was nine-year-old technology. For example, when Japanese vehicles with longer lifespans entered the American market in the 1960s and 1970s, American carmakers were forced to respond by building more durable products. When a market becomes more competitive, product lifespans tend to increase. In these cases of planned obsolescence, there is an information asymmetry between the producer, who knows how long the product was designed to last, and the customer, who does not.

Before introducing a planned obsolescence, the producer has to know that the customer is at least somewhat likely to buy a replacement from them in the form of brand loyalty. Planned obsolescence tends to work best when a producer has at least an oligopoly. It is the deliberate shortening of a lifespan of a product to force people to purchase functional replacements. The rationale behind this strategy is to generate long-term sales volume by reducing the time between repeat purchases (referred to as 'shortening the replacement cycle'). In economics and industrial design, planned obsolescence (also called built-in obsolescence or premature obsolescence) is a policy of planning or designing a product with an artificially limited useful life or a purposely frail design, so that it becomes obsolete after a certain pre-determined period of time upon which it decrementally functions or suddenly ceases to function, or might be perceived as unfashionable.

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