Key readings:
1. Renault/Nissan: The Making of a Global Alliance, Transnational Management
2. Peter Dicken, 2003, Global Production Networks in Europe and East Asia: The Automobile Components Industries, GPN Working Paper n. 7.
3. John Sutton, 2004, The Auto-component Supply Chain in China and India -A Benchmarking Study, Sticerd, LSE.
4. Deloitte, 2009, A New Era: Accelerating toward 2020: An Automotive Industry Transformed.
5. Yveline Lecler, 2002, The Cluster Role in the Development of the Thai Car Industry, International Journal of Urban and Regional Research, 26.4, 799-814
6. Lothar Krempel and Thomas Pluemper, 1999, International Division of Labor and Global Economic Processes: An Analysis of the International Trade of Cars with World Trade Data. Journal of World-Systems Research, V.3, 487-498.
7. Phallapa Petison and Lalit M. Johri, 2008, Localization drivers in an emerging market: case studies from Thailand, Management Decision, 46(9), 1399-1412.
2 comments:
For what I understood, the key features of the car industry are:
- very concentrated sector with few big firms;
- growth of the number of transnational companies, since so they are able to take advantage from the usage of different production factors that are present in different countries;
- presence of few central manifacturers (holding "core components") that have to be able to structure a close distribution network in which many firms are involved. These latter firms produce components that then will be fixed into the "core" one. This structure of the sector led to the boom of new players that are mainly emerging countries (eg. Thailand);
- necessity of huge plants in order to exploit the economies of scale that characterized this sector (sharing of platforms);
- mature technology;
- presence of two main regional clusters: Japan-North America and European countries (with Germany as the principal player). These cluster are quite different since the first one is characterized by the fact that Japan is a net exporter of cars, instead US is a net importer, so there is a strong dependancy between these two countries; this is not true for the European countries that are more diversified;
- transaction and transportation costs related with geographical distances are still present (globalization has not removed them).
Did I understand correctly?
Silvia D.
Frankingly, I'm pretty impressed on Thailand's car industry through these papers addressing at different view points because it's not as industrially developed as Japan and as economically exciting as China and India in Asia at least except tourism industry there. However we have to present the compliment to Thailand who has waken up at very early stage when most of Asian developing countries such as China and India were falling asleep or busy in national civil war.
So why Thailand has strikingly developed in car industry not only lies on market size, development of parts industry ascribed from "Local Content Regulations" and quality of infrastructure as mentioned in those papers, but also depends on the rational and wise awareness of first move to attract FDI in car industry compared to neighboring counterparts who has recently started emphasizing on the field.
Thailand has undoubtedly set up a good mode for other developing countries in Asia,but is still facing some of potentially significant challenges.
Firstly, Thailand has never attempted to construct its own national car industry but just consistently built up the supporting industry in the supply chain of car industry primarily invested by foreign auto makers, which means potential loss of bargaining power in the game of claiming market share and of chances of sharing core technologies in local assembly toward either domestic or overseas markets.
Secondly, it is not optimistic to remain as the biggest car market in Asia along with the emerging China and India either at luxurious or ordinary level of classes. For example, China's already climbed at No.2 biggest luxury consumption market immediately following USA,especially car industry. Many of world-class brands such BMW, BENZ,AUDI,FERRARI,HUMMER have already locally produced or are going to set up plants there aimed at serving neighboring and domestic markets, which to some extent undermines the attention FDI should have made on Thailand car industry, and further negatively influnces the local development.
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