International Production Networks in the Automotive Industry: Drivers and Enablers

The automotive industry was one of the earliest to internationalise, with overseas production by US companies already happening in the early 1900s. However, the arrangement for overseas automotive production at that time was quite different from the idea of international production networks in the contemporary sense. There were few linkages between international locations and overseas operations were designed either as largely self-sufficient, vertically integrated, replications of their domestic factories or as CKD/SKD assembly plants with little local technical content. By comparison, our current understanding of international production networks is that they are dispersed, collaborative, high value adding and centrally coordinated. This paper uses global company case analysis to identify the drivers and enablers that shape the international production networks of two automotive companies, BMW and Volvo Cars. The methodology contrasts with previous network studies of the automotive industry that have concentrated their analysis at the country and regional level.

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