Globalization of the automobile industry

The global car industry Car manufacturing has been a global industry since its beginning. It has been a major employer and, over the last years, has provided safer and more accessible transport for increasing numbers of people, including in newly industrialised countries. However car-related pollution and congestion have become an issue in many major cities. Identity and cultural diversity Interdependence and globalisation Sustainable futures Henry Ford introduced the assembly line.

Globalization of the automobile industry

Introduction Globalization of the automobile industry the past twenty-plus years, the changing global motor vehicle industry enabled the development of a vibrant automotive industry in the U.

Detroit remains the hub of the U. However, instead of an east-west geographical orientation of the industry emanating from Michigan, the geographic distribution of auto assembly and supplier plants now displays a north-south orientation, with a concentration of plants along a corridor running from Detroit southward, principally through Ohio, Kentucky, Tennessee, and into Alabama.

Today, there are 11 vehicle assembly plants located in the US Southeast and three more facilities have been announced. Because the newly developed regional industry is so embedded in a global context it makes a fruitful case for studying the impact of globalization.

The global automotive industry is characterized by production being conducted primarily in multi-country regions. The majority of parts production, assembly, and vehicles sales occur in integrated regions.

There are some countries i. Within the regions and countries, the automotive industry clusters in growth poles. In the last ten years, the Brazil, Russia, India, and China BRIC regions have significantly increased their share of world vehicle production while the developing country share has shrunk, but the basic geographic pattern of the industry appear to be holding.

The conceptual model describing possible impacts of globalization on the quality of life QOL at the country level developed by Sirgy et al. The model defined globalization as the diffusion of goods, services, capital, technology, and people workers across national borders.

The diffusion of goods, services, capital, technology, and workers across national borders take form in inflows and outflows. Inflows of goods, services, capital, technology, and workers in a country are those that enter the territory in question and are accounted for using government statistics.

Conversely, outflows of goods, services, capital, technology and workers from a country are those that exit the target country and are accounted for using government statistics. The diffusion of services and people workers across national borders was less of a factor so these factors will not be a focus of this chapter.

The diffusion of people workers that most significantly influenced the QOL of the region was migration of people from the northern parts of the U. The foreign firms did send managers and experts, but their impact was more localized e. There was also a flow of services as service providers to the foreign automotive and parts manufacturers followed their customers e.

However, the story of globalization of the Southern Auto Corridor is mostly captured by understanding how the flow of capital, technology, and goods impact the region. The diffusion of foreign capital to the region led to the flow of technology and goods. This capital came in the form of assembly plants and parts suppliers.

Along with this capital investment came flows of technology. The plants built with foreign capital needed imported parts for production so this lead to an inflow of goods into the region. The foreign Original Equipment Manufacturers OEMs use their American assembly plants to a limited extent as an export platform so more goods are flowing from the region.

Albeit, because of the regional nested structure of the industry the amount of exports from the NAFTA production region are limited. Due to political and industry factors, production in the global automotive industry is dominated by multi-country regional production bases e.

Nevertheless, the regional nested structure of the global automotive industry, in addition to the characteristics of the foreign-domestic automotive industry in the south, makes the local industry rather globally secure albeit tied to U.

Introduction

Thus the flows of capital, technology, and goods that created the Southern Auto Corridor in the last 30 years is only likely to experience minor ebbs and flows despite the turbulent times.

There are massive changes occurring in the global automotive industry. That is, the perceived demise of Detroit, financial crisis resulting in governmental bailouts, the emergence of huge new markets in Brazil, Russia, India, and China BRICalliances, and consolidations, as well as new fuel efficient and alternate energy vehicles.

The global changes are likely play out within this structure of nested growth poles. The financial troubles of the "The Big Three" i. These changes are likely to influence the auto industry in the U. The rise of the BRIC auto markets The first trend is the traditional global market dynamics are changing as market growth is occurring in emerging markets and the world's automobile manufacturers continue to invest into production facilities in emerging markets in order to tap into the new markets and reduce production costs.

China became the largest auto market insurpassing sales in the United States. North America sales in were India has been the second-best performing major global auto market over the past decade, with car sales climbing to a record 1. Brazil experienced sales of 3.

Globalization of the automobile industry

Southeast are active in the BRIC markets, but ventures in these markets are mostly in the form of foreign investment rather than exports from U. The export statistics also show that the growing developing markets will not be major export markets.Car manufacturing has been a global industry since its beginning.

It has been a major employer and, over the last years, has provided safer and more accessible transport for increasing numbers of people, including in newly industrialised countries. Impact of Globalization of the Automotive Industry on the Quality of Life of the US Southeast, The Economic Geography of Globalization Piotr Pachura, IntechOpen, DOI: / Available from: Chad Miller and Mack Josep Sirgy (July 27th ).

Yang analyzes the impact of globalization on national economic boundaries, using the automobile industry to contrast three different economic systems. Corporations emerge as new players in international relations. Their corporate policies and manufacturer-supplier linkages influence the.

Globalization of the automobile industry

structures in the automobile industry and would aim to detail how the nature of globalization has changed over time. Although there is a long history of foreign investment and trade in the. Chad Miller and Mack Josep Sirgy (July 27th ). Impact of Globalization of the Automotive Industry on the Quality of Life of the US Southeast, The Economic Geography of Globalization, Piotr Pachura, IntechOpen, DOI: / Available from: Chad Miller and Mack Josep Sirgy (July 27th The first petrol-powered automobile was produced by Karl Benz, a German mechanical engineer, in The automation of the assembly line by Henry Ford sped up the production rate of cars and reduced costs, leading to them becoming more affordable.

Globalisation. The car industry has been globalised from its early days.

Globalisation and the car industry | Global Education