30th International Colloquium of Gerpisa
The Auto Industry Entering a Post-pandemic World
Challenges for Labour in a World of Shifting Trade and Technology
Industrial Policy and Regional Development of Automotive Industry in Mexico
Jorge Carreto, Alejandra Patiño, Jazmín Solares
Asia is the host of some of the largest automobile markets and top global brands. It has recently taken several initiatives to foster its regional integration, such as Asia-wide trade agreements and infrastructure projects. This article examines the impact of these initiatives on the automobile fragmented production networks of Northeast, Southeast Asia and South Asia to see if they are becoming more regionalised or globalised, and to see if an Asia-wide production network is emerging. We focus on automobile component trade as a proxy of network trade and follow its evolution over the period 2001–2016 at the Asian and subregional level with a special emphasis on two major players, China and Japan. Our results show that a regionalisation process is under way between the three subregions, driven by China and Japan. However, this process is still slow due to the persistence of a high level of protectionism between the three subregions.
The decision to make changes in the value chain architecture in North America, in a similar fashion to how it is in the rest of the world, is made by the Board of Directors of the assembly plants. Today in Mexico there are already 14 companies assembling automobiles in the country: two American companies (GM and Ford); four Japanese (Nissan, Honda, Toyota and Mazda); three German (VW, Audi and BMW); one Korean (Kia-Hyundai); two Italian (Chrysler and Fiat) and one Chinese company (JAC), in a joint venture with Inbursa, which is a Mexican company. We’re not unaware that Audi is one of VW’s 12 brands, and that Chrysler and Fiat are the same company, but in both cases, in Mexico, they have been legally registered as separate firms.
The production of these companies, which favors their country of origin, in Mexico, in 2019, can be seen in the following table:
Table 1
Vehicle production in Mexico, 2019, per country (units)
Country
Production (Units)
%
Japan
1 160 775
31
USA
1 113 748
30
Germany
624 830
17
Italy
560 141
15
Korea
286 600
7
China-Mex
4 747
0
Total
3 750 841
100
