The Regional Nature of the World's Automotive Sector

Warwick Business School, University of Warwick
European Management Journal (Impact Factor: 1.22). 10/2004; 22(5):471-482. DOI: 10.1016/j.emj.2004.09.006
Source: RePEc


There are 29 automotive firms in the world's largest 500 firms. Yet none of these are "global" firms, defined as having at least 20 per cent of their sales in each of the three regions of the broad "triad" of the E.U., North America and Asia. Indeed 23 of the 29 auto and auto parts firms are home-region based, with an average of 60.6 per cent of their sales as intra-regional. These are representative firms across the 500, as the average intra-regional sales for all manufacturing firms is 61.8 per cent. There are a few special cases, especially Toyota and Nissan of firms being active in two regions of the triad. DaimlerChrysler and Honda are "host-region oriented". Seven cases are discussed in some detail to explore the reasons for the lack of globalization in the world automotive business.


Available from: Simon Collinson, Apr 14, 2015
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    • "Generation capacity, measured in mega-watts (MW), is a sector-specific measure of MNE presence related to the firm's core electricity generation activities and provides a substitute for the asset measure that could not be used. This is in a similar vein to the use of production capacity by Rugman and Collinson (2004) for the study of the automotive sector, Sethi's (2009) counting of the number of M&A deals by country of acquiring and region of acquired firms, and the counting of stores in countries by Rugman and Girod (2003). Finally, we also counted reported presence in a country. "
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    • "If a subsidiary role classification system is to describe accurately the spectrum of possible managerial role assignments, and to provide guidance to MNE management, especially in the context of resource allocation, the above decomposition is critical. For example, Rugman and Verbeke (2004) have demonstrated that most large MNEs are home-region bound in terms of sales, meaning that effective bundling of sales-related internal competences and external resources only occurs in the home region (high revenues, a loyal customer base, etc.). However, at the same time many of these firms rely heavily on sourcing and production from other regions in the world. "
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    • "For example, at industry level it has been demonstrated that retail and merchandising firms are predominately regional, see Rugman and Girod (2003), Sukpanich and Rugman (2007). Similarly the world's automobile sector is regional not global, see Rugman and Collinson (2004). Finally, the world's cosmetic industry also operates regionally and not globally, see Oh and Rugman (2006). "
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