Developing Model of Auto Parts in Emerging Economies: Comparative Analysis of the International Competitiveness of Auto Parts in Mexico, Brazil and India from 1990 to 2014

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Type de publication:

Conference Paper


Gerpisa colloquium, Paris (2016)


Brazil, BRICs, Developing Model of Auto Parts, emerging economies, global value chain, India, Mexico, supply chain


Developing Model of Auto Parts in Emerging Economies: Comparative Analysis of the International Competitiveness of Auto Parts in Mexico, Brazil and India from 1990 to 2014.

Toshiyuki BABA (Hosei Univ. Japan)

1. Introduction: Purpose and back ground of this research
It is very important matter for emerging countries of automobile production that reconstruction of value chain of auto parts for both production and R&D. In this study, the author would like to discuss the transition of international competitiveness of auto parts in Mexico, Brazil and India from 1990 to 2014 based on the developing model of auto parts.
There are two research questions, one is that “How is the international competitiveness of auto-parts in this progress of Auto-industry in Mexico, Brazil and India? “and the other is “Is correlation for developing economies between auto industry and its parts industry is positive or negative?”.
Mexico, Brazil and India are countries of emerging auto industry. The production of automobiles in 2014, Mexico was 3365thousand (7th in the world), Brazil was 3146 thousand (8th ), India was 3840 (6th) according to the OICA. In 2000, Mexico was 1936 thousand (9th), Brazil was 1682 thousand (12th), and India was 801 thousand (15th).

2. The developing model of auto parts in emerging economies
First step (DM Type1):Competitiveness quite weak, dependence on import.
State:Some company started auto-parts production domestically by foreign or local companies. The rate of domestic procurement is quite low. Import:It is difficult to procure many parts domestically. They should depend on auto-parts import. Export:Export is quite limited except for global auto-parts shift in global companies.
Second step (DM Type2): Competitiveness weak to moderate, early stage of development of domestic auto-parts industry.
State:Domestic auto-parts industry developed to a certain degree. Establishment and technology transfer of/from foreign auto-parts companies advanced. It becomes able to domestically procure auto-parts needing a design and function peculiar to an own country, or parts not needed difficult technology to make. The other hand, it depends on import for foreign companies to procure parts needed difficult technologies and/or critical safety parts. However the number of parts increases to domestically procure, many of them might be lower price. Import:Though it depends on import to procure auto-parts needed difficult technology, import gradually decreased because of increase of local procurement. Export:Export gradually increases not only global parts transfer in global companies. Sometime, it may increase to export for after sales market by an advantage of low wage.

■”Leaped Development”(3rd step pattern 1, DM Type3.1) : Competitiveness, moderate → strong, “Fortitude model ??”
State:It increased to domestically procure in many auto-parts. They may also expand export. R&D facility may increase by local or foreign companies backed increase of car production. Import:Import decreased except limited auto-parts. Export:Export increased in both for OEM and after sales market. Sometimes local or global manufactures advanced to another foreign countries and they may import auto-parts from here.

■”Development Dilemma”(3rd step pattern 2, DM Type3.2): Competitiveness, moderate → weak, “Paper Tiger model ??”
State:Domestic procurement decreased because of such as wedge raising by economic growth or shortage of workers, technologies stayed sluggish, and so on. Import: Import increases. Export: Export decreases because of decrease of international competitiveness of cost or quality.

3. Analysis: Method and Data
The author sets up the development model of international competitiveness of auto-parts in emerging economies as shown in the Fig. He uses the “Global Competitiveness Index” (GCI) to analyse international competitiveness of auto parts. The GCI ranges from -1 to 1, with values close to 1 indicating strong international competitiveness and close to -1 indicating weak international competitiveness.
Analyzing GCI, he uses trade statistics, the 4-digit and 6-digit HS (Harmonized Commodity Description and Coding System). These auto-components include auto-tires, friction material, springs, gasoline engines, diesel engines, engine parts, ignitions/starters, lights/wipers, chassis, bodies and other automobile parts, and so on.
(Acknowledgements: This research was supported by JSPS KAKENHI 26301024)

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