There were at one time hundreds of automobile companies. Most of which were outright scams.
Much like the dot com bubble the scams went bankrupt and lost every dime, some got bought out for pennies on the dollar, and then there were a dozen or so survivors that actually created long-term wealth.
I'm not familiar with a past (or any) automobile bubble. Are you saying you think we're in now?
I've heard this theory before, but I don't know what would cause it to pop, or how one could protect oneself (if that's even needed) from it popping.