Changing Value Chains and Modes of Regulation in the Automotive Industry in China

Type de publication:

Conference Paper


Luethje, Boy


Gerpisa colloquium, Paris (2017)


The digitalization of the automobile, the rapid emergence of new energy cars and new mobility systems are beginning to drive a massive restructuring of production models and value chains in the global car industry. The underlying change in the base technologies of driving, propulsion and control of cars and traffic constitute a cluster of potentially disruptive innovations that the automotive industry has not seen in decades. Both the Fordist model of mass manufacturing and flexibilized, modular mass production (“Toyotism”) since the 1980s were based on private ownership of cars as the dominant norm of consumption. Continuing structural overcapacity in car production, the frequent breakdown of car traffic and the related ecological crisis in megacities around the globe, as well as the recent scandals surrounding major auto makers about emission cheating are now driving a deep-ranging process of restructuring that puts into question the existing regime of capital accumulation in the global car industry.

China is at the center of this restructuring process. The unprecedented build up of state-of-the-art car production capacity during the last decade has propelled the country into the position of the largest market and production region for cars worldwide. The massive growth of automobile production in China provided the safety valve for structural over accumulation in the global car industry, but it also confronted the country with the ecologic and social problems of automobile mass production and consumption. The massive traffic jams and the smog epidemic in major Chinese cities are the most visible expressions of these problems. Under these conditions, the Chinese government had initiated a series of policies to rapidly develop new energy cars and new mobility systems, in a drive to leapfrog industrialized countries in technologies, innovation networks and value chains of future mobility.

Will the government-driven Big Leap Forward in car technologies and forms of mobility be disruptive to the existing model of post-Fordist mass production in the Chinese automotive industry? The structural changes in production models, value chains and innovation strategies have to be examined in the context of the existing mode of regulation enshrined in the joint ventures between multinational car makers and Chinese state-owned enterprises. This model of “refurbished state-capitalism” has been based on powerful triple alliances between multinational capital, Chinese state-owned carmakers and government at national and local levels. It has successfully supported the massive modernization of the Chinese car industry, but it has also proven inefficient in developing indigenous Chinese car technologies and brands.

China’s smaller indigenous car makers, most of them under private or mixed ownership, represent a much more competitive and innovative element in the car industry, which has been relatively successful in developing own brands and new energy vehicles. At the same time a new strata of vertically disintegrated manufacturers emerges in the field of new energy cars and digital car technologies, many of them with a background in electronics manufacturing. These emerging players are massively supported by China’s giant internet and e-commerce companies. Together, this sector represents a different mode of regulation, which can be called “network capitalist”.

Our paper will trace the changes in the Chinese car industry in the light of competing modes of regulation. Based on ongoing empirical studies, we will trace the impact of network-capitalist forms of regulation on the competitive structure, production models and innovation strategies of the dominant joint ventures between Chinese state-owned automakers and foreign multinationals. We will particularly look at the move of major mass manufacturers from the IT industry into new energy cars and alternative mobility networks and the emergence of new supply chains based on key electronics technologies (such as batteries). Against this background we will discuss perspectives for ecologically sustainable and socially inclusive pathways of restructuring.

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