Effects of model change rate on local content development issues for the springing automobile assembly plants in emerging economies

Cornelius Ogbodo Anayo Agbo

International Journal of Business Continuity and Risk Management, 2019, vol. 9, issue 2, 171-186

Abstract: The concern of this paper is to elucidate the consequences of frequently changing from one motor vehicle model to another on the local content development for the automobile manufacturing industry especially in the developing economies. The local content input of vehicles manufactured since 1975 to date were analysed to determine their level of local component substitution. It was found that none of the vehicles models achieved up to 50% target local content before being phased out. It appears that the models marketing cycle were too short to enable the local content manufacturers get acquainted with the possible replaceable components in the models before being phased out by their original equipment manufacturers with the attendant cost consequence for the local content developers. There is therefore need for adoption of few models with strict control on their marketing cycle.

Keywords: vehicle production; model change rate; local content; cost of technology; supply chain. (search for similar items in EconPapers)
Date: 2019
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