Restructuring in the European Automotive Industry

Peter Wells and Michael Rawlinson

Chapter 3 in The New European Automobile Industry, 1994, pp 34-68 from Palgrave Macmillan

Abstract: Abstract Few can be unaware of the rising tide of Japanese foreign direct investment (FDI) into Europe, where the automotive sector has had a prominent role. Indeed, for some this is part of a wider process of ‘Japanisation’ (Oliver and Wilkenson, 1989). This process has overlain an indigenous industry already undergoing profound competitive changes, which has prompted economic and spatial restructuring, including the widespread adoption of elements of the lean production model outlined in Chapter 2. Foreign direct investment, notably within Europe, has become an important feature of restructuring. Indeed, as Wells (1992) shows, European FDI grew from 20 per cent of total UK inward FDI in 1980 to 46 per cent by 1988, with the automobile industry playing a prominent role. This chapter seeks to identify some of the main dimensions of growth and decline in the European automobile industry, because it is changes occuring among the assemblers which dominate much of the subsequent change in the components industry. We start with an historical overview of production and markets in Europe before moving on to consider investments, closures and other structural changes in the sector in the late 1980s and early 1990s. Particular attention is given to Japanese FDI and the economic integration of Eastern Europe. A flexible definition of Europe is used, because in the longer term the countries of Eastern Europe and Scandanavia may well be integrated into a wider European Community alongside other peripheral countries such as Turkey, and in any case for some firms, integration across current EC boundaries is a reality at the present time.

Keywords: Foreign Direct Investment; Automotive Industry; General Motor; Commercial Vehicle; Japanese Firm (search for similar items in EconPapers)
Date: 1994
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-23526-1_3

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DOI: 10.1007/978-1-349-23526-1_3

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