The historical evolution of US auto firms in Mexico: Two models of local development

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Abstract:

The auto industry has led to different firm evolutionary trajectories, depending on the firm strategies and local embeddedness. Delphi has become Mexico's third-largest private employer in Mexico based on a trajectory characterised by industrial upgrading and a learning process. Delphi's process grew from simple assembly to centralised coordination of functions, including sophisticated product design, development and research. On the other hand, the evolution of Ford in Mexico since the 1980s has been characterised by a transformation from integral to modular manufacturing, that is, the increased delegation of complex production processes to the hands of first- and second-tier suppliers, which at the same time need to be close to the assembly plants and tend to be more linked to local suppliers due to the cost-reduction pressures. These two cases show us different trajectories of local development in emerging markets. Copyright © 2008 Inderscience Enterprises Ltd.