Car Firms’ Strategies and Practices in Europe

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Reference

Freyssenet M., Lung Y., Car Firms’ Strategies and Practices in Europe, in Faust, M., Voskamp, U., Wittke, V. (eds), European Industrial Restructuring in a Global Economy: Fragmentation and Relocation of Value Chains, SOFI Beritche, Göttingen, 2004, pp 85-103. Digital publication: freyssenet.com, 2007, 200 Ko, ISSN 7116-0941.

En anglais par un éditeur allemand en première publication.

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Abstract

The automobile sector is often presented as the archetypal global industry. In this view, car business is one of the main driving forces behind the homogenisation of the world, both because of the firms’ internationalisation strategies (mergers-acquisitions, establishment of facilities in emerging countries, world cars, international division of labour, etc.) and as a result of the social practices enacted by them via their organisation of work and their influence upon lifestyle (automobile civilisation).

Regarding the case of Europe, the present article is an attempt to deconstruct a representation that neglects the heterogeneity of firms and spaces, the great diversity of strategies pursued, and the inherent contradictions of the competitive process. For doing that, the analytical approach of firms’ trajectories elaborated during the first and second international programs of GERPISA is used (Boyer, Freyssenet, 2000).

Although a logic of production (economies of scale) has induced automobile manufacturers to extend their area of commercialisation on a global scale, it is in their articulation with a market, their getting into sync with a demand, that they have incorporated the regional tier as a level at which they are able to achieve a certain coherence. With the exception of prestige automobiles, there are limits to the homogenisation of global demand, and the failure of Ford’s attempt to integrate its activities globally shows that automobile firms should be looking for more appropriate strategies—and, above all, for models or innovative forms of organisation that are better adapted to a particular regional space. It is not at all certain that the real challenge is who will be the first to globalise—mono-regional strategies (such as the one that PSA has been pursuing), bi-regional, multi-regional, even trans-regional strategies, all of them may be relevant at a certain time, and in a given space.

Content

1. Growth modes, profit strategies and productive models

2. Internationalisation in a new century : between globalisation and regionalisation ?

3. The “volume and diversity” strategy: a possible multi-regionalisation
3.1. Volkswagen: external growth and commonalisation
3.2. PSA: internal growth and punctual cooperation3.3. Fiat: emerging markets were not enough…
3.4. From failure of trans-regionalisation to multi-regionalisation
3.5. A menace for “volume and diversity” firms: the second market generated by the introduction of “competitive” modalities of national income distribution

4. The divergence of trajectories of "specialist" European carmakers

5. Innovation and flexibility strategy: the regional renewal of Renault endangered by the global alliance with Nissan?

Conclusion

Key words

Automobile, Automobile industry, car makers, merger, take-over, alliance, enterprises separation, internal growth, external gorwth, globalization, regionalization, internationalization, national growth modes, profit strategy, innovation, flexibility, business history, theory of firms, Europe, Volkswagen, PSA, Fiat, Renault, Nissan, Mercedes, BMW, Porsche

Concerned disciplines

Economics, Management, Geography, History, Political Science, Sociology.

Writing context

Contribution
to personal questioning
to scientific reflection of research laboratory or network
to national and international scientific debate
to diffusion of scientific results
to implementation of scientific results

References, commentaries, critics

Current relevance

See also

Possible purchase websites

Last presentation page updating

2007.03.

Date of the putting on line of the downloadable text

2007.09.01: Freyssenet M., Lung Y., “Car Firms’ Strategies and Practices in Europe”, in Faust, M., Voskamp, U., Wittke, V. (eds), European Industrial Restructuring in a Global Economy: Fragmentation and Relocation of Value Chains, SOFI Beritche, Göttingen, 2004, pp 85-103. Digital publication: freyssenet.com, 2007, 200 Ko, ISSN 7116-0941.

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