With the rapid rise in popularity of the automobile taking a sharp uptake after 1920, the automobile became an ever more pervasive factor of life in the Brainerd lakes region. The first economic impact of automobile ownership was immediate: new garages, car dealerships, and "filling stations" sprung up (often as one integrated business) to fufill the needs of the car owner. Among these was, interestingly, the Mills Brothers service shop which has spawn the multi-state Mills Fleet Farm superstores.
While most of these original businesses were located downtown, automobile oriented business have since moved farther from the city in search of cheaper land and auto accessibility. The second major impact of the automobile on the region was the impetus it gave to the resort industry as the automobile made the region more accessible to recreationists.
In 1932 an automobile bridge over the Mississippi was built, and trunk highway 210 was established. Highway 210 runs from Duluth to Fargo-Moorhead, and takes the form of Main Street/Washington Avenue in its course through Brainerd.
In 1933 the Minnesota and International Railway Company basically went out of business (all outstanding stock was eventually purchased by the Northern Pacific Railway by 1942), due to decrease and change in business. I will speculate that this is due more to the shift towards automobile oriented tourism, rather than relocation of the wood harvesting industry to Canada, since wood harvesting relocation had happened around 30 years prior.
A private airport was started in 1920. For a time the city had an agreement with the proprieter to lease the space, with an option to buy it. Over the period of a few years they had invested a significant amount of money in a new hangar and other construction, however, the city opted instead to build a public airport on a larger plot of land.