Factors behind international relocation and changes in production geography in the European automobile components industry

This article analyses business strategies in the automobile sector to determine the key factors behind production relocation processes in automobile components suppliers. These factors help explain changes in production geography in the sector not only in terms of location advantages but also from a perspective of corporate strategies and decision-making mechanisms within firms. The results obtained from an empirical study in Spain during the period 2001-2008 show how the components sector has used relocation to meet the requirements for efficiency imposed by automobile manufacturers. The search for lower labour costs, production concentration and specialisation in order to obtain economies of scale and improved productivity are found to be the main factors determining relocation in the sector. These processes are facilitated by the operational flexibility of the multinational firms that dominate the sector which allows them to transfer resources internationally. Lean supply, technological requirements for production processes and the integration of production plants in the institutional environment are the main barriers to such processes of mobility, and may also determine the geographical destination of migrated production

Relocation in conditions of uncertainty: the Spanish automobile components industry during the economic crisis (2008-2012)

This paper analyses production relocation patterns in conditions of uncertainty. Analysis of the Spanish automobile components industry during the recent economic global crisis shows that the number of relocations was comparatively lower than in the period before the crisis. Uncertainty weighs more than the advantages derived from the operational flexibility of multinationals in relocation decisions. The main drivers of relocation in the sector are the search for lower labour costs and corporate restructuring. When there is uncertainty, these are conditioned by relocation costs and the risks inherent in such processes. The main implication of the research is that it helps identify the vulnerability of a region in relocation processes. This is key for defining public policies to prevent relocation and avoid its impact on regions that have traditionally suffered such processes

Relocation in conditions of uncertainty: the Spanish automobile components industry during the economic crisis (2008-2012)

This paper analyses production relocation patterns in conditions of uncertainty. Analysis of the Spanish automobile components industry during the recent economic global crisis shows that the number of relocations was comparatively lower than in the period before the crisis. Uncertainty weighs more than the advantages derived from the operational flexibility of multinationals in relocation decisions. The main drivers of relocation in the sector are the search for lower labour costs and corporate restructuring. When there is uncertainty, these are conditioned by relocation costs and the risks inherent in such processes. The main implication of the research is that it helps identify the vulnerability of a region in relocation processes. This is key for defining public policies to prevent relocation and avoid its impact on regions that have traditionally suffered such processes

Estudio descriptivo del sector del transporte internacional de mercancías por carretera en Galicia

Texto dispoñible en galego e españolNos últimos anos estamos asistindo a un cambio na contorna económica marcado pola liberalización da economía e pola globalización dos mercados. Estes supuxeron unha maior facilidade e aumento de intercambio de bens, poñendo de relevo a importancia do transporte neste novo escenario. Galicia e os seus sectores estratéxicos de actividade xa están inmersos nesta contorna vendendo os seus produtos en mercados globais (sobre todo europeos), considerando a exportación como a liña estratéxica para a mellora dos seus resultados. É esta situación a que lle confire ao transporte internacional de mercadorías en xeral e por estrada en particular unha grande importancia como garante da internacionalización da economía galega. Este artigo mostra os resultados dun estudo que presenta as características actuais e futuras do sector. O grao de subcontratación da actividade, o custo de transporte e a súa optimización, as características dos envíos e a estrutura das empresas de transporte líderes no sector son algúns dos elementos estratéxicos analizados. O obxectivo é que tanto os cargadores coma os transportistas respondan ao mercado internacional dos produtos galegos en condicións de máxima eficienciaOver the past years, we have been experiencing a change in the economic environment due to the liberalisation of the economy and the globalisation of the markets, which have resulted in a greater ease and increase of goods exchange thereby highlighting the importance of transportation within this new scenario. Galicia and its strategic business sectors are already immersed in such an environment and have been selling their products on the global market (especially within Europe), wherein exportation is considered to be the strategic basis for improving results. It is this situation that confers a greater importance to international goods transportation and especially to road transportation, as a means of internationalisation of the Galician economy. The aim of this study is to present both present and future characteristics of the sector. The level of subcontracting in the sector, the cost of transportation and its optimisation, the nature of consignments and the structure of the leading transportation firms from the sector are some of the strategic elements that have been analysed such that both loaders and transporters are able to respond with maximum efficiency to the international market for Galician productsEn los últimos años estamos asistiendo a un cambio en el entorno económico marcado por la liberalización de la economía y por la globalización de los mercados. Éstos han supuesto una mayor facilidad y aumento de intercambio de bienes, poniendo de relieve la importancia del transporte en este nuevo escenario. Galicia y sus sectores estratégicos de actividad ya están inmersos en este entorno vendiendo sus productos en mercados globales (sobre todo europeos), considerando la exportación como la línea estratégica para la mejora de sus resultados. Es esta situación la que confiere al transporte internacional de mercancías en general y por carretera en particular una gran importancia como garante de la internacionalización de la economía gallega. Este artículo muestra los resultados de un estudio que presenta las características actuales y futuras del sector. El grado de subcontratación de la actividad, el coste de transporte y su optimización, las características de los envíos y la estructura de las empresas de transporte líderes en el sector son algunos de los elementos estratégicos analizados. El objetivo es que tanto los cargadores como los transportistas respondan al mercado internacional de los productos gallegos en condiciones de máxima eficienciaS

Are sustainable mobility firms reshaping the traditional relationships in the automotive industry value Chain?

The rules of the automotive industry are changing due to sustainable mobility firms linked to essential products and technologies supplied to produce low environmental impact vehicles. Among others, these include batteries and their components (e.g., materials, cells), power electric systems, or technologies for recycling and reuse (e.g., mineral processing, de-pollution waste). Under the global value chain (GVC) approach, the research analyzed these changes through data collected from a survey comparing the relationships established by a sample of 27 sustainable mobility firms and 130 traditional components firms in the Spanish automotive industry value chain. The results indicate that the new players linked to sustainable mobility have greater decision-making power on the value chain in terms of price, product design, and geographical location. Moreover, these firms have broken the traditional asymmetrical dependence on leading buyers. As a result, they lead some of the key products in this industry, and show a high performance that favors a profitable return on investment in sustainable technologies. The main novelty of our findings lies in how to understand the new automotive industry value chain. Although this value chain continues to be governed by the Original Equipment Manufacturers (OEMs), the sustainable mobility suppliers control the main value-added activities and have the power to take relevant decisions in key sustainable technologies.Ministerio de Ciencia e Innovacion | Ref. PID2020-116040RB-I00Universidade de Vigo/CISU

Why firms relocate their production overseas? The answer lies inside: corporate, logistic and technological determinants

The paper analyses the drivers of international production relocation using a model built on intra-corporate factors. The results of an empirical research on an original and thorough data base for the Spanish automobile parts sector over the period 2001-2008 show the impact of corporate restructuring strategies on flexibility for transferring resources overseas. In particular, the larger the number of alternative plants in other countries, the greater the operational flexibility and, therefore, the more likely relocation will be. Second, lean supply requirements and technological complexity in the product or process at production plant level are both serious barriers to mobility. Finally, our results confirm that sunk costs are irrelevant in comparison with corporate factors

Mobility business models toward a digital tomorrow: Challenges for automotive manufacturers

The development of digital business models is impacting the traditional value chain for mobility, implying changes as well as future challenges for automotive manufacturers. Taking a Global Value Chain approach, this work analyses the recent evolution, short-term direction, and medium- to long-term future vision of the adoption of digital mobility business models by automotive manufacturers. Results suggest that, while the firms analysed are currently incorporating relevant business models through autonomous vehicles, digital platforms, connectivity, and carsharing, they are mostly focused on marketplace exploitation through digital platforms and services related to connectivity. Key elements for the development of future mobility business models include data collection and management as well as interconnection. At the same time, digitalization is expected to reconfigure not only associated business models but also the relationships among actors within the value chain. These relationships will become more complex for automotive manufacturers, who may lose control of value-added activities and acquire dependence on certain actors such as technology and service partners, which are expected to play a pivotal role in meeting new opportunities. As a result, the decision-making power of value chain participants will likely be more widely distributed.Agencia Estatal de Investigación | Ref. PID2020-116040RB-I00Xunta de Galicia | Ref. GPC-ED431B 2022/10Universidade de Vigo/CISU

Business models in times of disruption: the connected and autonomous vehicles (uncertain) domino effect

The ongoing digitalization of the economy is challenging the value creation process in traditional business. In the mobility-related industry, the disruptive potential of Connected and Autonomous Vehicles (CAV) has the capacity to transform business models. However, great uncertainty exists regarding the technological evolution and social trends that will condition businesses in the near future. This paper intends to use contingency theory to shed light on this topic and better understand the enhancers and barriers that managers should deal with to create, deliver, and capture value associated to CAV. With this aim, the paper adopts a qualitative approach based on in-depth interviews with high-level managers from different industries. The findings suggest the importance of data management to better understand the needs of the customer and vehicle requirements so that differential value can be provided. Two potential solutions that have emerged are, first, the establishment of alliances between companies competing in different areas and, second, digital platforms in order to enhance customer experience and the evolution from B2C to B2B markets associated with growing servitization.Agencia Estatal de Investigación | Ref. PID2020-116040RB-I00Xunta de Galicia | Ref. ED431B 2022/10Financiado para publicación en acceso aberto: Universidade de Vigo/CISU

Evolución de la periferia europea en la cadena de valor automotriz: lecciones aprendidas de Galicia (España)

La industria automotriz llegó hace casi 60 años a Galicia de la mano de la empresa francesa Peugeot-Citroën. En este lapso de tiempo se han producido cambios en el sistema productivo que ha permitido una evolución hacia actividades de mayor valor añadido. La disponibilidad de un tejido institucional sólido, la alta cualificación del empleo y el desarrollo de un entramado productivo con base local, han sido algunos de los factores clave en esta evolución. Las lecciones obtenidas pueden constituir una referencia para otras regiones periféricas del sector automotriz. Sin embargo, la industria de la región vislumbra una serie de retos que tendrá que acometer y que serán extensibles a otras regiones. Estos retos exigen un enfoque que integre al tejido productivo, las administraciones públicas y la sociedad

New mobility technologies and regional status in the automotive industry value chain: the case of Spain and Portugal

New mobility technologies related to autonomous, connected, and shared vehicles have prompted the entry of new players into the automotive industry, which has influenced the industry's traditional configuration of regional status. Under the global value chain (GVC) approach, this research proposes a new framework for defining a ‘core–periphery’ spatial model of the automotive industry. Under that model, based mainly on the key variables of domestic firms linked to new mobility technologies, analysis is made of the comparative status of regions of the European automotive industry traditionally regarded as peripheral (Portugal) and semi-peripheral (Spain). Results indicate that domestic firms located in each of those two regions do not differ in terms of decision-making power, first-level supply positioning, added value of activities, and technological innovation. This implies that the two regions now share the same status within the new (autonomous, connected, and shared) mobility value chain. This has relevant implications for public policies throughout the European automotive industry. Policies should focus on innovation in new mobility technologies and on the creation of an ecosystem adequate to develop strong domestic capabilities around these new mobility technologies, in order to ensure more favourable regional status in the spatial model of this competitive industry.Agencia Estatal de Investigación | Ref. PID2023-147496OB-I00Fundação para a Ciência e a Tecnologia | Ref. UIDB/03182/2020Fundação para a Ciência e a Tecnologia | Ref. UIDP/03182/2020Universidade de Vigo/CISU