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The changing role of national champions in the evolving geography of Europe’s motor vehicle industry
Submitted by Thomas Klier, Federal Reserve Bank of Chicago on 25 févr. 2015 - 01:18
Type de publication:Conference Paper
Source:Gerpisa colloquium, Paris (2015)
Europe’s high-volume mass-market vehicle producers are known as “national champions,” because nearly all of their production and a very high percentage of their sales were at one time concentrated in their respective home countries. Today, Europe’s four surviving national champions are Fiat, Renault, PSA, and Volkswagen. To what extent do these four producers continue to rely on their domestic base?
The purposes of this paper are to:
• Discuss the evolution of national champions in Europe’s motor vehicle industry in the wake of the region’s economic and political integration in the broader context of globalization.
• Describe the changing spatial distribution of the national champions’ production footprint in Europe.
• Identify similarities and differences in the geographical strategies adopted by the national champions.
The distribution of motor vehicle production within Europe has changed considerably in recent years. The dismantling of the Iron Curtain and the implementation of European Union policies fostered increased economic integration across Europe in the late twentieth century. At the time, the experience of North America, where Asia-based carmakers, in response to rising sales, increased their share of production from 0 in 1980 to 13 percent in 1990, was thought to foreshadow the fate of Europe’s motor vehicle industry. The dynamic and geographically diverse Asian producers were expected to make significant inroads into the European market. By the same token, the survival of Europe’s national champions was expected to be at risk in the wake of the 1970s oil shocks and resulting economic stagnation.
Europe’s national champions have turned out to be much more resilient than expected. They continue to jointly account for nearly 60 percent of Europe’s total vehicle production. German-based producers of premium brands increased from 8 percent of Europe’s total production in 1990 to 17 percent in 2013. Foreign-owned producers did not do as well. The share of production in Europe held by Asia-based carmakers increased only modestly, from 2 percent in 1990 to 8 percent in 2013, and the share held by the two U.S.-owned carmakers (Ford and GM) declined from 23 percent in 1990 to 12 percent in 2013.
Political and economic unification since 1990 has brought a substantial restructuring of the geography of motor vehicle production in Europe. The geographical changes have been undertaken primarily through a combination of acquisitions, joint ventures, and construction of new production facilities. These structural changes in the geography of production have fortified the competitive position of the national champions. At the same time, Europe’s share of global production has dropped significantly for all four mass producers as a result of expansion into in emerging markets. Thus, their domestic base has become much less important, both on a European and a global basis.
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