The Global Automotive Industry

The automotive industry is still one of the world's largest manufacturing sectors, but it suffers from being very technology-focused as well as being relatively short-term focused. There is little emphasis within the industry and its consultancy and analyst supply network on the broader social and economic impacts of automobility and of the sector that provides it.

The Global Automotive Industry addresses this need and is a first port of call for any academic, official or consultant wanting an overview of the state of the industry. An international team of specialist researchers, both from academia and business, review and analyse the key issues that make vehicle manufacturing still the world’s premier manufacturing sector, closely tied in with the fortunes of both established and newly emerging economies. In doing so, it covers issues related to manufacturing, both established practices as well as new developments; issues relating to distribution, marketing and retail, vehicle technologies and regulatory trends; and, crucially, labour practices and the people who build cars. In all this it explains both how the current situation arose and also likely future trajectories both in terms of social and regulatory trends, as the technological, marketing and labour practice responses to those, leading in many cases to the development of new business models.

Key features

• Provides a global overview of the automotive industry, covering its current state and considering future challenges
• Contains contributions from international specialists in the automotive sector
• Presents current research and sets this in an historical and broader industry context
• Covers threats to the industry, including globalization, economic and environmental sustainability

The Global Automotive Industry is a must-have reference for researchers and practitioners in the automotive industry and is an excellent source of information for business schools, governments, and graduate and undergraduate students in automotive engineering.

Peter Wells is a Professor of Business and Sustainability at Cardiff Business School and Co-Director of the Centre for Automotive Industry Research where his work has ranged across spatial industrial development, economics, organisational theory, industrial ecology, technological change, transitions theory, business models and sustainability — all through an applied focus on the global automotive industry. He teaches themes of transport, mobility and business sustainability on the MBA and MSc programmes, as well as to a wide range of companies and organisations. Professor Wells has over 550 publications reaching academia, industry, policymakers and stakeholders through traditional academic papers and books, industry practitioner journals and events, internet publications and, more recently, webinars. His latest books are: The automotive industry in an era of eco-austerity (Edward Elgar, 2010) and Business models for sustainability (Edward Elgar, 2013).

Series Preface xvii

Foreword xix

1 Introduction and Overview 1

1.1 Introduction 1

1.2 Continuity and Change 3

1.3 Overview 4

References 6

2 Understanding Change and Difference in the Global Automotive Industry 7

2.1 Introduction 7

2.2 Socio�]Technical Transitions 9

2.3 Varieties of Capitalism 12

2.4 Global Value Chains 14

2.5 Change in the Automotive Industry: A Synthesis 15

2.6 Conclusions 16

References 17

3 The Market for New Cars 19

3.1 Introduction 19

3.2 Market Fragmentation and Lack of Industry Consolidation 20

3.3 Geography of Markets 22

3.4 Mobility Services and the Emergent Automotive Ecosystem 26

3.5 Conclusions 27

References 27

4 Understanding People and Cars 29

4.1 Influences on Travel Choices 29

4.2 Influences on Vehicle Choice 33

4.3 Acceptability of Transport Policies and New Technologies 34

4.4 Conclusions 36

References 37

5 Car Manufacturing 41

5.1 Background and Prehistory 41

5.2 Ford, Budd and Sloan: The History of Mass Car Production 42

5.3 Monocoque Construction: Budd’s Impact on Car Design 44

5.4 Toyotism 45

5.5 Buddism in Crisis? 46

5.6 Lean v Agile 47

5.7 Conclusions 49

References 50

6 Recent Trends in Manufacturing Innovation Policy for the Automotive Sector: A Survey of the United States, Mexico, European Union, Germany and Spain 53

6.1 Introduction 53

6.2 A Changing Manufacturing Landscape 55

6.3 Restructuring in the Automotive Industry 56

6.4 Automotive Policies in the United States, Mexico, EU, Germany and Spain 57

6.4.1 United States 57

6.4.2 Mexico 59

6.4.3 European Union 60

6.4.4 Germany 61

6.4.5 Spain 62

6.5 Conclusion 63

References 64

7 Labour Relations and Human Resource Management in the Automotive Industry: North American Perspectives 67

7.1 Introduction 67

7.2 From Fordist Production to Lean Production: The Evolution of Labour Relations/Human Resource Management Systems in the North American Auto Industry Prior to 2000 70

7.2.1 The Classic Fordist Industrial Relations System in the US and Canadian Automotive Industries 70

7.2.2 The Impact of Japanese Transplants and Lean Production Methods on the North American Automotive Labour Relations System 72

7.3 Developments in North American Auto Labour Relations Since 2000 74

7.3.1 Concession Bargaining 2003–2008 74

7.3.2 The Impact of the Global Financial Crisis 76

7.3.3 Post�]Crisis Developments 78

7.4 Conclusion 78

References 80

8 Labour Relations and HRM in the Automotive Industry: Japanese Impacts 83

8.1 Introduction: The Japanese Car Industry and Toyota Production System 83

8.2 TPS and Japanese HRM 85

8.3 ‘Japanization’ of the Global Automotive Industry 88

8.4 Changes in Japanese Labour Relations and HRM 90

8.5 Concluding Remarks 92

References 93

9 The Rise of South Korean (or Korean) Automobile Industry 95

9.1 Introduction 95

9.2 A Brief History of South Korean Automobile Industry and the Performance of HMC 96

9.2.1 Brief History of South Korean Automobile Industry 96

9.2.2 The Change in Performance of HMG 100

9.3 Considering Five Success Factors of HMC 102

9.3.1 Vertical Integration 102

9.3.2 Modularization of Production and Standardization 102

9.3.3 Expansion of Overseas Production Capabilities in Emerging Markets 104

9.3.4 Product Strategy 104

9.3.5 Quality Focused and Design Focused Management 105

9.4 Characteristics of HRM in HMC and Effects on the Management System 106

9.4.1 Militant Trade Union Movement and Confrontational Labour�]Management Relations 106

9.4.2 Fragmentation and Automation of Work 106

9.4.3 Internal Competition Systems 107

9.5 Conclusion: New Challenges for the Korean Auto Makers as Multinational Enterprises 107

References 108

10 China’s Car Industry 109

10.1 Background 109

10.2 Pre�]History 110

10.3 China’s Car Industry 111

10.4 The Role of Government 114

10.4.1 Traditional Automobile Industries 114

10.5 New Energy Vehicles 118

10.5.1 R&D Support 118

10.5.2 Industrialization 119

10.6 Bringing NEVs to Market 121

10.6.1 Demonstration and Pilot Projects: Strategic Niche Management 121

10.6.2 Financial Incentives 122

10.7 Conclusions 124

References 124

11 Forging Ahead or Stagnating?: An Analysis of Indian Automotive Industry 127

11.1 Introduction 127

11.2 History of the Indian Automotive Industry 128

11.3 Statistics on Automobile Industry Performance 132

11.4 Stagnation of Industry in 2013–2014 133

11.5 Factors Critical to the Growth of the Indian Automotive Industry 133

11.6 Challenges and Future of Indian Automotive Industry 134

References 136

12 From Factory to End�]User: An Overview of Automotive Distribution and the Challenges of Disruptive Change 139

12.1 Shipping and Stocking Cars 140

12.2 Retail and Distribution 143

12.3 Changes to the Dealer Model 146

12.4 The Changing Role of Fleets 148

12.5 Delivering Integrated Services Means Rethinking Skills 150

References 150

13 Impacts of Automobility 153

13.1 Introduction 153

13.2 Externalities and Automobility: A Broad Perspective 153

13.3 Death and Injuries from Road Traffic 154

13.4 Environmental Impacts 156

13.5 Toxic Emissions 157

13.6 Current Concerns 159

13.7 Role of the Consumer 160

13.8 Conclusions 161

References 161

14 Regulating the Car 163

14.1 Regulating for Safety 163

14.1.1 Development of Vehicle Standards 164

14.1.2 European Directives 164

14.1.3 US Federal Motor Vehicle Safety Standards 166

14.2 New Car Assessment Programmes 167

14.3 Future Developments 168

14.3.1 Impact of New Vehicle Technologies 169

14.4 Legislating for a Cleaner Environment 170

14.4.1 Fuel Economy: Incentives and Disincentives 171

14.5 Climate Change 172

14.6 Future Developments 173

References 174

15 Global versus Local: Regionalism in a Global Industry 177

15.1 The Old World 177

15.2 Asia 179

15.2.1 The Creation of Two Motoring Cultures: India v China 179

15.3 Latin America 180

15.4 Case Study: On the Margins of Mass Production: Australia 181

References 184

16 The Impact of Electric Automobility 185

16.1 Electric Vehicle Design 185

16.1.1 Battery Electric Vehicles 186

16.1.2 Hybrid Electric Vehicles 186

16.2 Charging Infrastructure – UK Case Study 187

16.3 Electric Vehicles in Europe 191

16.3.1 Urban Electric Vehicles 193

16.3.2 Rural Electric Vehicles – The Welsh Case 193

16.4 Conclusions 197

References 197

17 Alternatives to the Car 199

17.1 Introduction 199

17.2 Defining the Car: Legislative and Market Boundaries 200

17.3 The Hidden World of Non�]Car Automobility 202

17.4 Transition by Stealth: The 2W�]BEV 203

17.4.1 3W�]BEVs 205

17.5 Conclusions 206

References 206

18 New Business Models and the Automotive Industry 209

18.1 Introduction 209

18.2 Fundamentals of the Existing Automotive Industry Business Model 210

18.3 Pressures for Change on the Existing Business Model 212

18.4 Incremental Business Model Evolution in the Automotive Industry 213

18.5 Radical Business Model Innovation in the Automotive Industry 214

18.6 Conclusions and Future Prospects for Business Model Innovation 216

References 216

19 Future Challenges for Product and Industry 219

19.1 Introduction 219

19.2 New Engine Technologies 220

19.3 Owning or Sharing? 223

19.4 The Future Car 223

19.5 The Future Industry 224

References 226

Index 229

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