Transnational Production Networks in the Automobile Industry

This report on the automobile industry provides from a comparative perspective a number of important insights, not only on the chosen industrial sector, but also on regionalisation processes in general. In particular Heribert Dieter teases out the role of State and non-State (essentially business leaders) in promoting processes of economic regionalization in both continents. In the European case, he highlights the way in which the politically driven development of a single European market has caused changes of strategy in the automobile industry in order to take advantage of lower cost production in new EU entrants, and to develop regionally integrated production networks. In the Asian case, State actors have been less visible in processes of regionalisation. Nevertheless, the outsourcing say of Japanese automobile companies can not be divorced from a number of political decisions pursuant to the Plaza agreements which significantly increased the value of the yen.

In both the European and Asian cases the countries receiving substantial amounts of FDI in order to develop their own automobile sectors – both as manufacturers and/or component suppliers – have not been passive recipients. The industrial strategies of these host governments need to be kept in mind.