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Staying alive in the global automotive industry: what can developing economies learn from South Africa about linking into global automotive value chains?

Year: 2008
Author: Barnes, Justin
Journal: The European Journal of Development Research
Volume: 20
Issue: 1
Pages: 31-55
DOI: 10.1080/09578810701853157
Abstract:

The insertion of the South African automotive industry into the global mainstream of vehicle manufacturing highlights a number of valuable analytical lessons for developing country automotive economies. The global value chains that dominate the automotive industry have fostered substantial upgrading within the South African automotive industry but pervasive international trends also limit the opportunities for value addition and more substantial increases in vehicle output. Key trends in this regard relate to tightening market conditions in the developed economies into which South African vehicle producers and automotive component manufacturers supply, excess global production capacity and the emergence of new low cost production locations principally in Asia. The benefits to the South African automotive industry of engaging in global value chains are clear but the long term sustainability and development of the industry remain in question. The importance of industrial policy in shaping any national industry's insertion into global value chains, as well as the need for ongoing upgrading and adoption of world class manufacturing standards is stressed as pivotal to maximising the gains that can be derived from insertion into global automotive value chains.

Keywords: global automotive value chains; industrial policy; world class manufacturing; South Africa; competitiveness; developing economy automotive producers


Link: http://dx.doi.org/10.1080/09578810701853157
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