Globalization of the Auto Industry and the Second GERPISA Programme: Just More of the Same? Or Time for Innovations in Concepts, Power Plants, Networks and Systems?

"If and when China's vehicle ownership grows to the same level as that of Japan, where there is one vehicle for every two people, the ownership in that country alone will become equivalent to the total number of vehicles on the roads around the world today, or approximately 500 million vehicles. If that happens, I expect it to bring about sweeping changes in the automotive world. Gasoline-powered vehicles will no longer be able to sustain worldwide needs..." (Yoshikazu Hanawa, President at Nissan).

Facing the same realities, Toyota has decided to increase its R&D-spending drastically, putting alternative-fuel research on equal funding basis with conventional power plants. (Automotive News, Nov. 18, 1996).

An unprecedented growth in worldwide motorization is taking place in the last decade of the 20th century and the first decade of the 21st. In previous growth periods, expansion was always limited to one or a few regions. In the 1920s, mass production and consumption of cars took off in the USA, in the l950s-60s, mass motorization reshaped Europe, and in the 1960s70s, the same happened in Japan. What we are now witnessing is a simultaneous massive growth in a number of huge areas: Eastern Europe, China, India, Thailand, Indonesia, Brazil and Mercosur, Mexico.... Densely populated megacities (>10 million inhabitants) with gravely deficient public transport systems are motorized at express speed. Auto makers in Japan, Europe and the US are rushing into the new markets, competing to build new plants and expanding capacity, from India to Brazil. At the same time the traditional vehicle concepts and established markets segmentation in mature markets are brought into question. In the USA, where the autonomy of states makes independent regulatory initiatives and technology policies possible this is resulting in the final breakthrough for EVs. In Europe, the obsession of the EUinstitutions with creating a monolithic regulatory framework stifles such innovation; nevertheless new bold initiatives arc eroding previous market segmentation and posing new challenges: a significant example being the small but safecar strategy of MercedesBenz.

I have been asked to comment on the Second programme of GERPISA. I'm quite positive that the proposed structure will produce a wealth of new reports and statistics. However, I'm concerned that the program will miss the great social and ecological dilemmas which in a fundamental way will challenge the present configuration and orientation of the auto industry complex.

From the national perceptive the motorization of India or Indonesia will tell highly interesting stories; from the firm perspective the various strategies of European, Japanese, Korean or American companies to build presence and penetrate markets in South or East Asia are highly important. But is the intention of GERPISA just to compile a dossier of country and company studies? What about the crucial consequences on the social and industry level if the world-wide car population is doubled within 1520 years? This process will create enormous strains and tensions, and this in turn will create an agenda for innovation and for creative initiatives and alliances: between firms inside and outside the auto industry (witness the MercedesSwatch alliance, or the role of Sony in the development of highperformance batteries to Toyota and other Japanese auto makers); between automotive firms and political agencies devoted to new transportation concepts; there will be innovations in propulsion technology and vehicle concepts, in fabrication methods and production networks. The role of the new entrants and emerging markets is still obscure: will they just repeat and duplicate the mistakes of the previous motorization pattern, only more massively and more rapidly? Or will some of them drive the development in new directions?

The planned GERPISA glabalization study seems very much to be predicated to the "more of the same"scenario. What about the new demand, the new networks, the new userproducer alliances, the new company strategies? Globalization strategies are important, but equally important are strategies and positions related to the new challenges: from proactive policies of technological pioneers and farsighted mass producers (such as Toyota), to followers and laggards trying to find "secure" segments and markets for traditional products and technologies.

The "more of the same"approach is certainly justified to some extent: there will be millions of new owners to the same kind of cars, there will be dozens of new plants operating in the same fashion as we know today. But is this really interesting for an international scientific enquiry? What is the basic interest of the program: Variety in diffusion and/or variety in innovation?

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