A review of trends in the global automotive manufacturing industry and implications for developing countries

SOURCE: African Journal of Business Management
OUTPUT TYPE: Journal Article
PUBLICATION YEAR: 2012
TITLE AUTHOR(S): M.Gastrow
KEYWORDS: MOTOR INDUSTRY, MOTOR INDUSTRY
DEPARTMENT: Equitable Education and Economies (IED)
Intranet: HSRC Library: shelf number 7321
HANDLE: 20.500.11910/3360
URI: http://hdl.handle.net/20.500.11910/3360

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Abstract

This review explores the literature investigating recent global trends in the automotive manufacturing sector, particularly in developing countries. The role of globalisation has been an underlying factor in several key trends: The shift from west to east in terms of production and consumption; the concentration of the supply chain, with a handful of firms gaining control of most of the industry; a greater distribution of production activities around the globe, encompassing regional and local markets; and the concentration of innovation activities in the developed countries. Key trends in developing countries include continuing liberalisation and globalisation, increased foreign investment and ownership, and the increasing importance of follow-source and follow-design forces. Large developing countries have attracted greater critical mass for production and local product adaptation. Smaller developing countries increased their production capacity but not their innovation capacity. Developing countries bordering large markets became low-cost production hubs with lower levels of technological upgrading. Technological transfer has increasingly been facilitated through the purchase of knowledge-intensive assets in developed countries. The global financial crisis has had a large impact on the industry, particularly for developed countries. However, developing countries have generally been less affected. For most developing countries, the primary effect was an acceleration of the global market shift, as well as the accelerated consolidation of the supply chain. The trend of developing country firms purchasing knowledge-intensive industry assets from developed countries also accelerated.