1. Global Auto Manufacturing

2. Terms & Concepts OEM – Original Manufacturer
FDI – Foreign Direct Investment
Transplants – FDI plants
10% of Global Trade is auto related
BRIC nations – Brazil, Russia, India & China

3. Purpose of Article Describe unevenness of Global Automobile Markets
Question the impact of American unionized workforce on US auto decline
Describe the subsidies provided by all major producing nations in wake of 2008 recession

4. Major & Minor Auto Markets
European
North American
E. Asian

5. East Asian Japan & S. Korea Highly Asymetrical Closed local market
5% imports
>50% production to exports
Mainly N. America
Substantial to Europe
FDI outflow

6. N. America Magnet for Imports and FDI transplants
Market 20% import bulk from E. Asia
25 Japanese plants (40% of all production)
One each for Daimler, BMW, & Volkswagen
US OEM’s badly bleeding
market share dropped – down to 47%
Very few exports
12:40

7. N. America cont. Southward shift of production
away from unionized workforce states
Across border into Mexico, away from Canada (Mexico now larger producer of two)
Outbound FDI – mainly aimed at China and Brazil

8. Europe 2/3rds of market controlled by European OEMs Ony 10% imports
Significant exports and outward FDI
Some FDI in N America other towards China & Brazil
Global balanced trade with exports to N. America, imports from E. Asia

9. Europe cont.
Eastward/Southern migration – Spain, Central & Eastern Europe – Lower labor costs
Eastern to Western Europe flows
Small trade deficit in Western Europe

10. BRIC Nations China 10 fold increase in decade
World’s largest market & producer
45% growth in 2009 alone
Requires 50% joint ventures & technology transfers for foreign ventures
Plans on moving into export market

12. China Rapidly improving safety
2007 Model
2011 Model

13. Brazil 5th largest market in the world
Highly productive & modern assembly

14. Changing Global Markets
Climbing emerging markets

15. Global Labor Markets

16. Comparison US not that much more expensive, and getting cheaper
All Auto workers are paid a premium
May be result of higher productivity
Emerging market still holds a cost edge, but declining

17. 2008 Recession All nations provided help to their industries
Some provided direct labor support