| La Lettre du GERPISA | no 121 (march 1998) |
Not a day goes by without an automobile firm director or another making public declarations that future policy will privilege innovation. Undoubtedly, this has something to do with qualitative changes in automobile demand. Indeed, more and more automobilists are demanding not only cleaner and safer automobiles, but also models which differ from the classical four or five-door sedan. However, as in other realms, one should not interpret these more or less recent trends as constituting a universal and irreversible phenomenon. For a keener interpretation, one should study the social processes these trends imply.
Initial results from GERPISA's second international program, "The automobile industry; between globalization and regionalization", are helping us to formulate a certain number of hypotheses. For quite some time, growth methods in several industrialized countries generated a type of automobile supply and demand context which essentially contained the whole range of low to high grade models, due to a moderately hierarchized form of national revenue redistribution and the privileging of household consumption. These approaches to growth have greatly evolved over the past twenty years.
However, the most important aspect is that they have changed in different ways. The hierarchized markets which characterized them have developed in at least four separate directions : either towards stratification, polarization,
balkanization, or quantitative and qualitative instabilization, in function of the growth method and national revenue redistribution now in practice within those countries being considered. There seems to be an even larger variety of market types in developing countries. Consequently, contrary to what advocates of globalization are promising, it appears that we are not evolving towards a type of demand structure homogenization.
These diverging trends definitely call for strategic adaptations, but which are not necessarily those expected. A classic Sloanist product policy, for example, still remains pertinent (under certain conditions), as Volkswagen's results over recent years underline : a vigorous platform policy, external growth, mastering costs, and an orientation towards markets where social inequalities, though pronounced, are not (yet) the product of unsurmountable barriers, and are even compensated from country to country, such as in ContinentalWestern Europe.
Nevertheless, there is no doubt that growth and national revenue redistributiontransformations are opening up horizons for profit strategies thusfarunder represented or simply nonexistent. At least four strategy typesstand out. The specialization and quality strategy in international demand for high-grade models is reinforced by the development of privileged classes firmly rooted in wealth. The same probably exists for luxury automobiles, with the condition of redefining characteristics.
The diversity and flexibility strategy, which had all but disappeared, is regaining ground for markets moving towards balkanization or instabilization.
The innovation and flexibility strategy has already demonstrated, especially in the 1990s with the Honda, Chrysler, and Renault examples, that it responded not to general trends but to the emergence of increasingly privileged social categories.
These examples also demonstrate that innovation can not simply add itselfon to the rest. In order for it to be profitable, innovation requiresthe mobilization of human, technical, and financial means which is incompatible with other profit strategies, especially the volume and diversity Sloaniststrategy. Hence, this is where the milk turns sour. Today, many firms believe they can innovate and still preserve a classical model, maintain their conception, production, and sales approaches, neglect to provide themselves with the indispensable degree of financial independence, and ignore the need to construct a policy governing compromise which guarantees the capacity for rapid transformation in function of the success or failure of newly launched models. For example, is a platform policy compatible with models responding to the expectations of newly emerging privileged social classes ?
In the follow-up of GERPISA's second program, we will attempt to delve into a deeper analysis of different market types in the making and their characteristics, in light of national revenue redistribution and growth method transformations. It therefore will become possible to establish the degree of pertinence of different profit strategies, along the lines of what was inaugurated during the 1st program, within emerging social and economic spaces. GERPISA's sixth International Conference, to be held in Paris at the Luxembourg Palais from June 4th to 6th, will serve as anopportunity to debate these issues.