© Peter Dicken 2015

‘Wheels of Change’: The Automobile Industry Global Shift Chapter 15

Review Concepts to Review Key Words TNC/state relationship, regionalization, heavy industry, role of consumer, 2008 financial crisis, networks Key Words Automobile industry, lean production systems, aspirational goods

The Automobile Industries: Definition and Structure Establishment of the industry key contributor to industrial development 1910s: moving assembly line 1970s: lean production badly hit by the 2008 financial crisis Shape of industry Technological developments key innovations: shared platforms modularization of components role of electronics suppliers

Role of the State Perceived importance of automobile industry as key developmental sector states are keen to stimulate it access to foreign firms support for domestic ones Tariffs Auto assistance packages post-2008 Environmental regulation much intercountry variation

Consumption Patterns Changes in consumption patterns Cars are necessary goods but there is a strong discretionary element Demand volatile, due to: cyclical nature of market long-term changes in demand increasing market fragmentation Cars in the developing world As developed country markets stagnate, developing world becomes attractive Rise of China

Consolidation Trends Producer level Supply chain level Collaborative agreements Supply chain level Supply system fragmented Emergence of standardizers, integrators Diverse relationships between suppliers and assemblers ‘Industrial condominiums’ and ‘supplier parks’ Regionalization of the market