I will expand a bit on the previous educator's very good response.
The main reason why so many cars were produced so quickly each year was due to the invention of the moving assembly line at the Ford plant in 1913. The moving assembly line cut time at factories, for now workers no longer needed to leave their work stations in order to transport an item to another worker. They would perform their part of the assembly and set the product down on the conveyor belt, which would carry it to the next worker. This not only made factory jobs less physically demanding, it also made it possible for workers to talk to one another.
Demand for products was high in the 1920s, due not only to the rise in incomes, but also due to the increasing importance of advertising. Women, particularly young women, were employed in some factories to work on the assembly line. Their access to capital allowed them to buy some of the things that they helped to construct, including cars.
Young women in the 1920s demonstrated their independence by smoking, drinking, bobbing their hair, working, and learning to drive. As the previous educator mentioned, the ability to get in one's car and go to meet a beau allowed for a higher level of intimacy than was previously possible. Sexual mores had loosened, and young people—armed with money and mobility—had more freedom to define their own lives and plan their own activities.
The automobile was important to the history of the Roaring ‘20s for at least two reasons. One of these reasons was economic while the other had to do with culture and society.
Economically, the rise of the automobile helped to drive economic growth in the 1920s. This was partly because of how many cars were being made. There were over 3 million cars made each year for most of the decade. Each car, of course, had to be made by a number of workers using many different materials. The making of the automobiles and the things like rubber, glass, and steel that went into them provided large numbers of jobs during the decade. In addition, the automobile boom produced jobs in other related areas. There were people who worked to build roads. There were people who worked at gas stations, repair shops, and motels. These, too, were important sources of jobs, making the automobile an important factor in the economy of the 1920s.
While automobiles were economically important, they were also important because they helped change American society. Since so many Americans owned cars, they now had a new source of entertainment. They could enjoy driving in their cars and they could drive to various new places where they could engage in recreation. The cars also gave them a new sense of freedom. Now, they could go (or so they would have felt) anywhere they wanted to go. Young people had a new way to get away from the eyes of their parents. They could drive off and find privacy, perhaps giving them a chance to engage in some degree of physical intimacy. In these ways, cars allowed people more ways to feel free and to engage in leisure activities. This is important to the history of the 1920s because greater freedom and leisure are seen as major characteristics of the decade.