> if this was a simultaneous saturation across everything that a company could do with their current resources.

That's exactly what I am describing. It's not that a particular style of vehicle is no longer in demand due to a shift in preferences and factories would need to be retooled to create a different type of vehicle, demand for all vehicles has fallen. Yes, the people who once worked on those auto assembly lines will generally go on to do something else, but it won't count as an increase in productivity in car production.

More generally, demand for pretty much all US domestic manufactured goods has flatlined or fallen. Production capacity is not the limiting factor in almost anything mass produced nowadays. Even dramatic reductions in manufacturing cost aren't going to induce any demand. Throw in demographic changes where there are fewer people who have needs to be satisfied, and better products which don't need to be replaced as often, and we ought to expect falling demand across the board.

What happens if the prices of cars are depressed by the increasing efficiency, competition and product longevity, and the people displaced through efficiency are taking lower paid jobs.

If you measure output as GDP - wouldn't GDP have gone down - even if actual production of goods and services has gone up?

Not sure how they measure productivity here.