Effects of the Crisis on the Automotive Industry in Developing Countries: A Global Value Chain Perspective

31 Pages Posted: 20 Apr 2016

See all articles by Timothy Sturgeon

Timothy Sturgeon

Massachusetts Institute of Technology (MIT)

Johannes Van Biesebroeck

K.U.Leuven; Centre for Economic Policy Research (CEPR)

Date Written: June 1, 2010

Abstract

This paper applies global value chain analysis to study recent trends in the global automotive industry. The authors pay special attention to the effects of the recent economic crisis on the industry in developing countries. The principal finding is that the crisis has accelerated pre-crisis trends toward greater importance of the industry in the South. More rapid growth of car ownership is the impetus, but the co-location and close interaction of suppliers and lead firms in this industry is an important catalyst. Opportunities to move up in the value chain for suppliers in emerging economies have proliferated and are likely to become even stronger now that an increasing number of new models are developed specifically for markets in developing countries. The co-location of assembly and parts plants in national and regional production systems has largely confined the impact of sales declines during the crisis to each country/region. In addition, the different development strategies followed by countries like Mexico, China, and India are slowly converging as their industries gain size and independence.

Keywords: Markets and Market Access, Microfinance, Labor Policies, Economic Theory & Research, Debt Markets

Suggested Citation

Sturgeon, Timothy and Van Biesebroeck, Johannes, Effects of the Crisis on the Automotive Industry in Developing Countries: A Global Value Chain Perspective (June 1, 2010). World Bank Policy Research Working Paper No. 5330. Available at SSRN: https://ssrn.com/abstract=1619694

Timothy Sturgeon (Contact Author)

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Johannes Van Biesebroeck

K.U.Leuven ( email )

Naamsestraat 69
B-3000 Leuven
Belgium
+3216326793 (Phone)
+3216326796 (Fax)

HOME PAGE: http://www.econ.kuleuven.be/public/N07057/

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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