Location tendencies of the international automotive industry: 'footless companies going east and south' or 'regionalisation of value chain profiles'? Online publication date: Fri, 18-Sep-2009
by Ludger Pries, Veronika Dehnen
International Journal of Automotive Technology and Management (IJATM), Vol. 9, No. 4, 2009
Abstract: The paper discusses the location strategies of the international automotive industry. Its aim is to develop a new scientific approach to the explanatory factors behind how automobile companies and their suppliers structure their international value chains. A special focus is laid on relocation tendencies from the 'old' industrialised countries to new markets in Eastern Europe and Southeast Asia. The paper reviews empirical evidence of value chain reorganisation over the last 15 years and some common tendencies such as a stronger organisational differentiation of functions in the value chain. The analysis shows that economic factors alone cannot explain location strategies; in addition to cost, markets, and economies of scale and scope, other factors such as product complexity, physical space and process time aspects, the institutional embeddedness of the producers, actors' strategies and company trajectory influence decision-making processes.
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