The globalization of the motor vehicle manufacturing industry

Abstract

By the year 2000, will there be one major global multinational automobile company supplying the entire planet? Extrapolating from trends in the 1980s, it is entirely possible to speculate that one major company—having swallowed up the entire global competition, with all the attendant benefits of economies of size and scale, high R&D expenditures, with adaptations of its products and prices to local market needs on a continent‐wide basis—will produce cars that consumers everywhere will buy. Should this occur, the next question we need to ask is: Will this company have its headquarters in Japan, the United States, or Europe? Again, if you were to follow the trends in the media, you would forecast a high probability that the “One Big Auto” company will be Japanese. However, my research suggests a somewhat different scenario for the future. While there will be a concentration in the industry worldwide, and fewer, larger companies will dominate the industry, there have been many unanticipated developments. Principal among these is the persistence of many companies in the industry, which are increasingly interlocked through joint ventures, so that it is no longer relevant to think of an American, European, or Japanese car. Rather, the final product is sourced from dozens of different countries.

Citation

Coates, N. (1989), "The globalization of the motor vehicle manufacturing industry", Planning Review, Vol. 17 No. 1, pp. 34-39. https://doi.org/10.1108/eb054246