Automobile

According to Peter Dicken (2011):

The automotive industry or as Peter Drucker called it “the industry of the industries” plays a key role for the global economy. Furthermore, for some countries like (the major car producer) US, Japan, Germany,… the automotive industry is the engine for the country’s economic growth. Whereby, during the financial crisis in 2008 governments from across the globe gave huge financial assistance to the automobile industry to stem massive job losses. Another reason for the huge public aid payments into the automobile industry is its linkages to many other manufacturing industries and services.

Economic importance of the industry is underlined by the facts:

* 20 million workers employed

* Its products are responsible for almost 50 % of the world’s oil consumption

* their manufacture uses up nearly half the world’s output of rubber, 25% of its

glass and 15% of its steel

The global automobile industry consists of very large corporations, which have mainly organized their activities on transnationally integrated lines. This transnational nature of this producer driven industry makes the concept of “national” automobile industries virtually meaningless, although governments like to believe otherwise. Consequently, there is still a competitive bidding for investments between nation-states. Therefore, its not surprising that the industry is closely engaged with national governments (collaboratively or conflictually) which are trying to enhance automobile production within their territories. Almost 60 % of the global production is concentrated in just 7 countries (US, Japan, Germany,…).

The state influences the automobile industry in two notably respects (protection and stimulation):

* determining the degree of access to its domestic market, including the terms under

which foreign firms are permitted to establish production plants

* establishing the kind of support provided by the state to its domestic firms...