Globalization of the Automotive Industry

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Just like the other industries such as apparel, electronics, and consumer goods, the automobile industry has accelerated its foreign direct investment, cross border trade and global production. The automobile industry has increased outsourcing and bundled value chain activities in major supplier chains. As a result, more developed countries that serve as suppliers have increased their involvement in trade and FDI. With these increased supplier capabilities, large national suppliers have become global suppliers and are now controlling multinational operations. This is because of their increased capability of providing good and services to various lead firms all over the world. The automotive industry has a distinct firm structure. This enables it to exert a lot of pressure and power on extremely small firms. Production in the automobile market is dominated from lead firms in Japan, USA, and Germany. It is without a doubt that the automobile industry has resulted to massive effects on globalization. This article discusses the effect of the automobile industry in globalization, and reviews which part of the automobile industry has affected globalization. How did the automobile industry effect globalization? The automotive industry has been in the global scene since its inception. Off shoring of vehicle production was begun with the mass production of system of Henry Ford, which came alongside mass markets. The automotive firms in America pioneered the early age of globalization in the 1900s. Firms such as General Motors’ are remembered for their production of facilities outside America a year after the company was founded. Since 1913, the automobile industry has undergone tremendous changes. The automotive in... ... middle of paper ... ...Industry: Motivations, Methods, and Effects. Cambridge: International Motor Vehicle Program, Massachusetts Institute of Technology, Cambridge, MA. 2008.Print. Maxcy, George. The Multinational Automobile Industry. New York: St. Martin’s Press. 2001. Print Sturgeon, Timothy. & Memedovic, Olga. Globalization of the Automotive Industry: Main Features and Trends. International Journal of Technological Learning, Innovation and Development, 2009. 2, (1) http://www .cggc.duke.edu/pdfs/IJTLID_Globalizationofautoindustry_Sturgeon_2009.pdf Ulrike, Schade. 2009. Globalization and Reorganization of Japan’s Auto Industry. Journal of Automotive Technology and Management. http://irps.ucsd.edu/assets/033/10612.pdf Yang, Xiaohua. Globalization of the Automobile Industry: The United States, Japan, and the People’s Republic of China. Westport, CT: Greenwood Publishing Group 1995.

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