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  • Print publication year: 2010
  • Online publication date: July 2010

5 - The restructuring of the global automotive and auto-parts industries

Summary

Introduction

The end of the Cold War, the rapid spread of information technology, and international economic globalization have revolutionized many industries, starting with the financial and securities industries and then spreading to the fast-growing information and communication industries. The automobile industry is no exception.

Prior to the global shake-up, the automobile industry, especially in advanced countries, was primarily a national industry, no matter how international its business. Trade disputes, for example, related to the correct way to handle automobile trade, the balance of trade, and job security for a country's labor force. The automobile industry also impacted a wide range of related industries, such as components and materials, on a national level. Because of this background, automobile manufacturers in advanced nations constructed management strategies that centered on their own country. Their overseas strategies were tightly connected to the domestic strategy and had a strong tendency to complement them, no matter how important overseas business and exports were to the company. Therefore car manufacturers' competitiveness was closely related to how competitive they were in their domestic markets and, up until the massive globalization boom of the 1990s, automobile industries competed with each other at a nation-to-nation level. At the same time, the Japanese automobile industry had grown rapidly by introducing lean production methods, which sparked reform in Western companies to remain competitive and led to the globalization of the automobile industry in the 1990s.

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