Global Shifts in the Automotive Sector
Markets, Firms and Technologies in the Age of Geopolitical Disruption
- 2025
- Book
- Editors
- Martin Krzywdzinski
- Grzegorz Lechowski
- John Humphrey
- Tommaso Pardi
- Publisher
- Springer Nature Switzerland
About this book
The automotive industry is undergoing fundamental organizational changes related to the transition from the production of internal-combustion-engine vehicles towards the production of low- or no-emission powertrain technologies. In addition, the ongoing transformations in this sector are shaped by the dramatically changing geopolitical context – including the increasing technological rivalry between China and the West.
In response, this edited volume offers an in-depth examination of the automotive industry, with emphasis on the ongoing transformations in the international divisions of labour, the regional and national production models, and the established value-chain relations. Collecting contributions from established and emerging scholars from a range of disciplinary perspectives, the book brings together empirical research on different regions relevant for the changing globalized production system of the automotive sector – including the European Union, East Asia, and North America.
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Table of Contents
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Frontmatter
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Key Transformative Trends of the Global Automotive Sector
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Frontmatter
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Chapter 1. Introduction
John Humphrey, Martin Krzywdzinski, Grzegorz Lechowski, Tommaso PardiThe global automotive sector is undergoing a profound transformation, driven by the shift from internal combustion engines to electric vehicles and the integration of digital technologies. This chapter explores the rapid changes that have occurred since the early 2010s, highlighting the role of key players such as China, the European Union, and the United States in shaping the future of the industry. The transition to electric vehicles (EVs) has been accelerated by regulatory frameworks and policy interventions aimed at reducing fossil fuel dependency and addressing climate change. Alongside this, advancements in connected, autonomous, and shared mobility (CASE) technologies are revolutionizing vehicle design, production, and usage. The chapter delves into the strategic responses of governments and companies, examining how they are adapting to these technological shifts and the resulting changes in market dynamics. It also discusses the emergence of new entrants and the reconfiguration of value chains, as well as the impact of industrial policies on the global automotive landscape. The analysis covers a wide range of regions, including Europe, Asia, Africa, and the Americas, providing a comprehensive overview of the industry's transformation and the challenges and opportunities it presents.AI Generated
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AbstractThis chapter introduces the dynamic transformations currently taking place in the global automotive industry. It highlights key technological innovations such as the transition from the internal combustion engine (ICE) to electric vehicles (EV), advances in autonomous driving, and increased vehicle connectivity. It raises important questions about the impact of these innovations on traditional automakers, market structures, and global supply chains. The chapter places these technology changes in the context of the industrial policies shaping the future of the industry, with a particular focus on the evolving competition between established automotive giants and new market entrants from emerging economies, above all China. The broader implications of these changes are explored through the lenses of global value chains, productive models, and international core-periphery dynamics. -
Chapter 2. Car Markets in Transition: Can Emerging Countries Take the Lead?
Tommaso PardiThe automotive industry has undergone significant transformations since the 2000s, with emerging markets like China, India, and Brazil becoming pivotal players. These markets have challenged the traditional dominance of Western OEMs, leading to a reconfiguration of global production and supply chains. The shift towards electric vehicles (EVs) has accelerated, driven by stringent environmental regulations and industrial policies, particularly in China. This transition has seen the rise of new OEMs from emerging countries, who have leveraged decentralised, cost-effective strategies to capture market share. The chapter also explores the digitalisation and connectivity of vehicles, noting the slower-than-expected progress in autonomous driving technologies. It concludes by examining the strategic implications of these shifts for both established and emerging OEMs, highlighting the potential for increased competition and the need for adaptive strategies in the face of evolving market dynamics and regulatory landscapes.AI Generated
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AbstractThe chapter analyses the transformation of global car markets since the 2000s, focusing on the growing dominance of emerging markets and the shift towards electric and connected vehicles. The problem addressed is the potential for emerging countries, particularly China and India, to challenge the traditional dominance of Western Original Equipment Manufacturers (OEMs). Key research questions include how these market shifts are influencing the global automotive landscape and whether emerging countries can take the lead in electric vehicle (EV) production and innovation. The study also explores the interplay between market geography, technology transitions, and the strategies of OEMs. The major findings indicate that emerging markets, especially China, have seen rapid growth in car demand, outpacing traditional markets like the US, Europe, and Japan. Furthermore, China’s proactive policies, particularly in the electric vehicle sector, have given its domestic OEMs a significant advantage, especially in producing affordable Battery Electric Vehicles (BEVs). Western OEMs, constrained by high costs and legacy strategies, are struggling to produce competitively priced EVs. The study concludes that emerging markets, supported by state policies, are becoming key players in the global automotive industry. -
Chapter 3. Incumbents’ Responses to the Challenges of Producing Connected, Autonomous, Shared and Electric Vehicles
John HumphreyThe automotive industry is undergoing a seismic shift with the advent of connected, autonomous, shared, and electric vehicles (CASE). This chapter delves into the strategic responses of incumbent car manufacturers to these disruptive changes, highlighting their efforts to secure new capabilities and maintain their system integrator roles. The transition to electric vehicles (EVs) is reshaping the industry, with battery electric vehicle (BEV) sales accelerating rapidly, driven by stringent emission targets and the entry of new competitors. Incumbent firms are facing intense pressure to innovate while managing costs and supply chain disruptions. The chapter examines how these companies are adapting their business models, forming strategic alliances, and investing in new technologies to stay competitive. It explores the challenges and opportunities in battery-powered drivetrains, connected and autonomous vehicles, and shared mobility services. The analysis reveals the complex interplay between technological advancements, regulatory environments, and market dynamics, offering a comprehensive view of the evolving automotive landscape. Readers will gain insights into the strategies that are shaping the future of the industry and the unforeseen challenges that incumbents must overcome to thrive in the era of CASE.AI Generated
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AbstractThe current transformation of the global auto industry requires incumbent carmakers to make a rapid and complex shift towards CASE—the connected, autonomous, shared and electric vehicle. Some observers hypothesised that the incumbents would find it difficult to acquire the capabilities needed to develop and incorporate these technologies into their products. In fact, the incumbents have managed to do this so far, and the role of alliances made with battery manufacturers and electronics hardware and software companies in enabling access to the new technologies is clear. But the incumbents face new challenges. Affordability has become a critical obstacle to the continued expansion of electric car sales, and incumbents need to reduce costs both to expand the market and to meet the challenge posed by Chinese carmakers. Incumbents also need to negotiate the policy and regulatory environment that will play a key role in the implementation of CASE. -
Chapter 4. Industry 4.0 and Its Implications for the International Division of Labor in the Automotive Industry
Martin Krzywdzinski, Grzegorz LechowskiThe chapter explores the profound implications of Industry 4.0 on the automotive industry, focusing on the international division of labor and the adoption of advanced production technologies. It begins by tracing the historical development of Industry 4.0, emphasizing its roots in the German high-tech strategy and its subsequent global dissemination. The analysis reveals that while Industry 4.0 has been promoted as a means to enhance the competitiveness of high-wage manufacturing locations, the reality is more nuanced. The chapter delves into the specific changes in process organization within the automotive industry, highlighting the role of digital technologies such as data analytics, connectivity, and automation. It compares the strategies of different automotive firms and countries, revealing a spectrum of approaches ranging from technologically ambitious initiatives in Germany to more cautious, incremental changes in Japan and the United States. The chapter also examines the impact of Industry 4.0 on the international division of labor, using the German supplier sector in Central and Eastern Europe as a case study. It discusses how the adoption of Industry 4.0 concepts has led to a partial reshoring of production and the emergence of lead plants in high-wage countries. However, it also notes that low-wage locations are increasingly adopting advanced manufacturing technologies, challenging the notion of a clear divide between high-wage and low-wage manufacturing. The chapter concludes by reflecting on the broader implications of Industry 4.0 for the automotive sector, arguing that while the concept has driven significant changes, it has not led to a revolutionary transformation of the industry. Instead, it has built upon and evolved existing production practices, such as Lean Production and the Digital Factory. The analysis underscores the complex interplay between technological innovation, economic factors, and policy initiatives in shaping the future of automotive manufacturing.AI Generated
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AbstractThe introduction of Industry 4.0 concepts has been among the key developments in the automotive industry in the last decade. Building upon previous organizational changes, these concepts aim to increase the productivity and flexibility of manufacturing operations. In the policy discourse, Industry 4.0 has sometimes been seen as an opportunity for high-wage manufacturing locations to develop new competitive advantages over low-wage countries and stop or potentially reverse relocation processes. Building on these debates, this chapter focuses on three central questions: (1) What differences and similarities can we observe between the major automobile-producing countries in the implementation of Industry 4.0 production systems? (2) What specific changes in process organization in the automotive industry have resulted from the adoption of Industry 4.0 concepts? (3) How has the adoption of Industry 4.0 concepts affected the international division of labor in the automotive sector? Overall, the analysis indicates that the arrival of Industry 4.0 production concepts has not yet radically reshaped the strategies of companies in major car-producing countries, nor has it significantly shifted the existing divisions of labor between high- and low-wage economies in the automotive sector. Meanwhile, new types of productivity and efficiency challenges are emerging in the automotive sector related to new product and production technologies, and their impacts remain uncertain.
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The Multilevel Sectoral Transformation in the European Union
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Frontmatter
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Chapter 5. Bringing the European Union Back in the Automobile Sector After the Covid Crisis
Samuel Klebaner, Sigfrido M. Ramírez PérezThe Covid-19 pandemic exposed the vulnerabilities of the European automotive sector, accelerating the need for structural changes and strategic policy shifts. The European Union's response has been multifaceted, focusing on enhancing economic resilience, promoting electrification, and addressing geopolitical tensions, particularly with China and the US. The chapter explores the EU's post-Covid policy line, which aims to accelerate the twin transitions of electrification and digitalisation through instruments such as Important Projects of Common European Interest (IPCEIs). However, it argues that pre-existing industrial policy contradictions, such as targeted CO2 regulation leading to upmarket drift, have been reinforced by the lack of a broad, coordinated industrial policy framework. The chapter also delves into the EU's trade position vis-à-vis China, highlighting the debates and potential consequences of a protectionist stance. It provides a comprehensive overview of the recent transformations in the EU's automotive policies, offering insights into the challenges and opportunities that lie ahead for the sector.AI Generated
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AbstractThis chapter investigates the recent transformations of the European Union’s policies in the automotive sector since the Covid crisis. The first section introduces structural data pertaining to the automobile industry in the region. The second section focuses on the set of public policy measures developed at the EU level since the outbreak of the Covid-19 crisis, which has marked a renewed interest in developing a strategic industrial policy to restructure the industry in order to confront three major challenges: Greening, digitalisation and the rise of the Chinese automobile industry. The third section highlights the lack of coordination between these industrial and commercial policies, which is revealing internal tensions between member states, business actors and EU institutions. Finally, we open the discussion on a possible return to defensive protectionism by the European Union. -
Chapter 6. The German Industrial Model in Transition: Electromobility Challenges in the Automotive Sector
Grzegorz Lechowski, Nathan WeisThe German automotive industry, once a paragon of stability and global expansion, now stands at a crossroads with the advent of battery-electric vehicles (BEVs). This chapter delves into the multifaceted challenges posed by the BEV transition, which threaten to reshape the sector's established 'German model' of automotive production. Historically, German carmakers have thrived by focusing on high-quality, premium vehicles and maintaining a robust domestic production base while expanding into global markets. However, the shift to BEVs introduces new adaptive pressures, particularly in product strategies, domestic production capabilities, and global market presence. The chapter explores how German OEMs are attempting to replicate their premium strategies in the BEV sector, despite facing stiff competition from global rivals like Tesla and Chinese manufacturers. It also examines the development of domestic BEV production capabilities in Germany, highlighting the significant investments and challenges in establishing a strong battery production ecosystem. Furthermore, the chapter investigates the evolving role of China as a production location and market for German OEMs, discussing the strategic adjustments made in response to new competitive pressures. Through a detailed analysis of these topics, the chapter provides a nuanced understanding of the future trajectory of the German automotive industry in the era of electrification.AI Generated
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AbstractThis analysis explores the implications of the transition toward the production of battery-electric vehicles (BEVs) for the future evolution of the “German model” in the automotive industry. Our main argument is that the ongoing BEV shift creates significant new adjustment pressures and leads to several incremental changes that may undermine key characteristics of the German “global quality production” strategy. First, it remains unclear to what extent German carmakers will manage to reproduce their earlier “premium” profit strategies within the BEV market—in particular, given the increasing price competition in the sector and the ability of several foreign companies (especially Chinese carmakers) to produce high-quality vehicles at lower costs. Second, the role of German production plants and workers within the emerging transnational BEV value chains remains uncertain. Given the high domestic production costs, growing international competition, and increasing policy pressures from abroad, establishing a strong BEV manufacturing base in Germany will largely depend on a timely and effective government support strategy. Third, also the significant dependence of German producers on distant foreign markets creates new kinds of challenges. In particular, maintaining a strong market position in China may require companies to reshape their global production networks and sacrifice the previous centralization of product development and innovation activities in Germany. -
Chapter 7. Is Electrification an Opportunity or a Threat? The French Automotive Industry at the Crossroads
Tommaso PardiThe French automotive industry has faced significant challenges over the past two decades, with production levels returning to those of the 1960s and substantial job losses. The rapid push towards electrification, driven by EU regulations, is seen as both an opportunity and a threat. The industry's decline is attributed to regulatory upmarket drift and the relocation of production to low-wage countries. Previous government interventions have failed to address these structural issues, and the current electrification strategy faces similar hurdles. The chapter examines the potential for electrification to reverse the sector's decline, highlighting the need for a radical change in the EU regulatory framework to support the production of small, affordable electric vehicles. It also discusses innovative policies and industry proposals that could pave the way for a more sustainable and competitive French automotive sector. The future of the industry hinges on the political compromises and strategic choices made in the coming years, with the potential to either revitalize the sector or accelerate its decline.AI Generated
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AbstractThe chapter analyses the post-Covid attempt made by the French government to rebuild the French automotive industry via electrification after twenty years of structural decline. It identifies the upmarket drift of new car sales in Europe and the associated process of relocation of small and compact car production towards low-wage countries integrated in the European Union from 2004, as the two main causes of structural decline. Past attempts made by different French governments to prevent the relocation process have failed because they did not address the upmarket drift and its consequences for the competitiveness of French Original Equipment Manufacturers. The current attempt to use a rapid transition to electromobility as an industrial policy tool to bring back automotive production to France has suffered so far from the same shortcomings. Nevertheless, the more generalised problems faced by electrification in Europe are now spurring a reorientation of both French and European policies towards the promotion of smaller, more affordable, and sustainable battery electric vehicles, opening up more favourable conditions for the French automotive sector. It remains to be seen though how far this reorientation will go and what type of commitment French OEMs are ready to make towards their domestic base in this new configuration. -
Chapter 8. The Imposed Path for the Italian Automotive System
Matteo Gaddi, Nadia Garbellini, Francesco GaribaldoThe Italian automotive industry is at a critical juncture, grappling with a significant decline in passenger car production and the strategic shifts of Stellantis, the result of the merger between Fiat Chrysler Automotive (FCA) and PSA. The chapter delves into the consequences of these changes, highlighting the increasing dependence of Italian automotive suppliers on foreign markets and the lack of a coherent industrial policy. The analysis reveals how the Italian automotive sector has been relegated to a subordinate position within European value chains, with profound implications for employment and industrial competitiveness. The chapter also examines the strategic decisions of Stellantis, which prioritise cost reduction and profitability over domestic production, further exacerbating the challenges faced by Italian suppliers. The lack of effective industrial policy in Italy is a recurring theme, with successive governments failing to implement measures that could support the transition towards electrification and strengthen the domestic supply chain. The chapter concludes by exploring the potential future scenarios for the Italian automotive industry, emphasising the urgent need for strategic intervention to prevent further decline and ensure a sustainable future for the sector.AI Generated
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AbstractThis chapter analyses the causes and consequences of the decline of the automotive industry in Italy. It focuses on the central negative role played by the ownership and management of Fiat-FCA and shows how the creation of Stellantis is further increasing the vulnerability of the Italian automotive sector in the context of the international restructuring driven by electrification. It discusses the consequences of this development on the Italian component industry and how public policies have failed to address the decline or support the transition towards electrification. The chapter also analyses in greater detail the subordinate position taken by Italian automotive suppliers in the European value chain, and its important consequences for permanent geographical and organisational reorganisation. It discusses the additional threats that this transformation and the current fast transition towards battery electric vehicles pose to production and employment levels in Italy.
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The Global Variety of Sectoral Restructuring
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Frontmatter
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Chapter 9. Between Covid and Geopolitics: Emerging Production Networks in the New Energy Vehicle Industry in China
Boy Lüthje, Wei ZhaoThe chapter delves into the profound shifts within China's new energy vehicle (NEV) industry, driven by the Covid-19 pandemic and escalating geopolitical tensions. It reveals how China has become the global leader in NEV production, surpassing multinational car companies in market share. The text explores the vertical disintegration of traditional automotive value chains, where specialized producers of core components like batteries have emerged as key players. This transformation is compared to the break-up of Fordist and post-Fordist models in the IT industry, highlighting the emergence of new production networks centered around batteries, digital driving systems, and automotive semiconductors. The chapter also examines the historical and political context of China's automotive sector, tracing its evolution through three major phases of transformation. It discusses the role of industrial policy, the impact of the Covid-19 pandemic, and the rise of new players in the NEV sector. The analysis extends to the lithium battery industry, detailing the vertical restructuring and globalization of production networks. The chapter concludes by exploring future scenarios for the automotive industry, including vertical disintegration, refurbished vertical integration, and flexible specialization, and the implications for industrial policy and global competition.AI Generated
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AbstractThis chapter explores the transformation of China’s automotive industry amidst the challenges of the Covid-19 pandemic and increasing geopolitical tensions, particularly with the United States. The research investigates the shift from traditional car manufacturing, characterized by joint ventures between state-owned enterprises and foreign corporations, to a more fragmented and specialized production model. The major research questions are how the geopolitical and pandemic-driven disruptions have accelerated the vertical disintegration of the automotive value chain in China and how they transformed the production networks, particularly in the battery sector. The findings suggest that China’s New Energy Vehicle sector has not only become a global leader but also exhibits a new form of production organization. Specialized producers of key components, especially batteries, dominate important parts of the value chain and challenge the role of established car manufacturers, leading to the formation of new alliances and competitive dynamics. However, this shift also poses significant economic and social challenges, including overcapacity, monopolistic tendencies, and vulnerability to protectionist policies and geopolitical conflicts. -
Chapter 10. Industrial Trajectories in the Brazilian and Indian Auto Sectors
Praveen Jha, Hansjörg Herr, Bruno De Conti, Christina Teipen, Helena GräfThe chapter explores the intricate dynamics of the automotive sectors in Brazil and India, focusing on their integration into global value chains and the impact of technological advancements, particularly the shift towards electric vehicles (EVs). It underscores the role of government policies in shaping industrial trajectories, with a particular emphasis on the creation of new comparative advantages through comprehensive industrial strategies. The analysis reveals that while both countries have experienced economic growth and technological transfers, the integration into global value chains has not been sufficient for significant catching-up with high-income countries. The chapter delves into the contrasting experiences of Brazil and India, highlighting the influence of historical economic policies, the presence of domestic lead companies, and the varying degrees of trade union power. It also examines the responses of these sectors to the COVID-19 pandemic and the potential for functional and social upgrading in the context of vehicle electrification. The comparative study of Brazil and India offers valuable insights into the complexities of industrial development in emerging market economies, shedding light on the interplay between global value chains, technological change, and national industrial policies.AI Generated
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AbstractThe automotive industry has experienced significant globalisation since the 2000s, particularly through the integration of Global Value Chains (GVCs). However, this has led to ambivalent outcomes for catching-up. The Indian and Brazilian automotive sectors represent two industries in large emerging economies that have not successfully caught up to core countries, in contrast to China. In this chapter, we examine economic and social upgrading in the Indian and Brazilian automotive industries. We consider historically developed positions, industry characteristics and current key developments, including the impact of the Covid-19 pandemic, companies’ strategies and the role of state programmes, particularly industrial policy—with a primary focus on the current key trajectory towards electrification. We conclude that India has achieved stronger market success and earlier electrification than Brazil, but has a significantly worse record in terms of social upgrading. In contrast, the Brazilian sector lacks substantial economic upgrading but shows historically developed strong social upgrading. Later in the chapter, we provide explanatory factors for these findings. -
Chapter 11. The Impact of Global Shifts in the Automotive Industry in the United States
Bernard F. Swiecki, Kristin DziczekThe U.S. automotive industry, once a pioneer in mass production and technological innovation, now finds itself playing catch-up in the global shift towards electric vehicles (EVs). With EV adoption rates lagging behind Europe and China, the United States faces significant challenges in both consumer adoption and supply chain development. The chapter explores the intricate political and economic landscape that influences the transition to EVs, highlighting the dominance of China in global EV battery manufacturing and the strategic investments made by the U.S. to bolster its domestic EV supply chain. The analysis delves into the role of U.S. industrial, environmental, and trade policies in shaping the future of the automotive industry, examining how recent legislative measures, such as the Bipartisan Infrastructure Act and the Inflation Reduction Act, aim to accelerate EV adoption and production. The chapter also discusses the implications of these policies on employment, labor, and the broader economic landscape, providing a nuanced view of the opportunities and challenges that lie ahead. Furthermore, it examines the global competition for critical minerals and materials essential for EV production, underscoring the strategic importance of securing a resilient and sustainable supply chain. The chapter concludes by highlighting the potential risks and uncertainties that could impact the continued electrification of the U.S. automotive industry, offering insights into the future prospects and policy challenges that must be addressed to ensure a successful transition to a low-carbon transportation system.AI Generated
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AbstractThis chapter provides an overview of the status of the U.S. automotive industry’s progress toward electrification, as well as the policy drivers and implications involved. The pace of electrification in the United States has trailed that of Europe and China, driving urgency in government policies intended to incentives automakers and consumers to make the change, while penalizing products with negative environmental impact. This chapter explores the implications of global shifts toward vehicle electrification in the United States, the complex political and economic considerations of an electric vehicle battery supply chain that is currently dominated by China, and recent U.S. trade, environmental, and industrial policy responses. The research examines how the shift in policies currently supports the growth of EV and battery manufacturing in the United States as well as resulting investment patterns and their regional distribution. -
Chapter 12. From Automobile Industry to Mobility Industry? New Mobility Concepts and Policies in Japan
Holger BungscheThis chapter delves into the transformative shifts occurring in Japan's mobility landscape, driven by the need for more efficient, sustainable, and inclusive transportation solutions. It begins by examining the socio-economic factors, particularly demographic changes and urbanization, that are reshaping Japan's mobility needs. The analysis reveals how these factors are influencing the domestic production and sales of cars, pushing manufacturers to innovate and adapt. The chapter then explores the evolving policies and concepts from both the government and industry, highlighting the pivotal role of the Japanese Automobile Manufacturers Association (JAMA) and leading companies like Toyota. It discusses the transition from traditional automobile manufacturing to a broader focus on mobility services, exemplified by Toyota's Woven City project. The chapter also reviews past and present programs aimed at spreading electric vehicles (EVs) and fostering new forms of mobility, providing a historical context for Japan's current initiatives. Furthermore, it assesses the implications of these new mobility concepts for the global strategies of Japanese manufacturers, emphasizing the unique opportunities and challenges presented by Japan's domestic market. The chapter concludes by summarizing the main findings and assessing whether Japan's automobile industry is indeed moving into new territory, offering a forward-looking perspective on the future of mobility in Japan and beyond.AI Generated
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AbstractIn October 2020, the Japanese government committed to achieving carbon neutrality by 2050. Alongside digitalization and the new post-pandemic living and working normality, carbon neutrality constitutes the third mega-trend the Japanese automobile industry must adapt to. However, the industry is confronted with serious socio-economic challenges in the domestic market. Japan’s demographic structure is changing dramatically. The unprecedented aging of its society will also accelerate the fast-proceeding urbanization processes of the three metropolitan areas, Tokyo, Nagoya, and Osaka, and the continuous depopulation of rural areas. Both processes will further diminish the importance of the car for individual mobility and the importance of the domestic automobile market for Japanese manufacturers. Against this background, the Japan Automobile Manufacturer Association began to develop new mobility concepts more than a decade ago. Key to all these concepts is automated driving technology. This chapter raises three questions. How are socio-economic changes affecting the Japanese automobile market and the development of new mobility concepts? What impact will these new mobility concepts have on the electrification of the car market? And how will they influence Japanese manufacturers’ global strategies? -
Chapter 13. Africa’s Automobile Sector—Development Opportunities in a Rapidly Changing Industry
Tilman Altenburg, Justin Barnes, Anthony Black, Mbongeni NdlovuThe chapter delves into Africa's peripheral yet burgeoning role in the global automotive industry, which accounts for just 1.3% of the global vehicle market and production. It explores the continent's vast potential for growth, driven by population expansion and economic development, amidst rapid technological changes and shifting global production landscapes. Key questions addressed include strategies for pursuing global, regional, and domestic markets, the impact of electrification on automobile manufacturing and the battery industry, and the opportunities presented by multimodal transport solutions. The analysis reveals that while Africa's automotive production is currently concentrated in Morocco, South Africa, and Egypt, the continent's market potential is substantial, with 50 million adults projected to afford new vehicles by 2035. The chapter also examines the challenges posed by the dominance of pre-owned vehicle imports and the need for economic stability and governance reforms to capitalize on global recovery and improved commodity prices. It discusses the implications of regional integration through the African Continental Free Trade Area (AfCFTA) and the potential for Africa to leverage its resource wealth in the battery value chain. Additionally, the chapter highlights the emergence of innovative mobility solutions and the role of urban conglomerations in supporting advanced mobility services. The transition to New Energy Vehicles (NEVs) and the development of two-wheeler markets are also explored, along with the opportunities and challenges in battery production and mobility-as-a-service (MaaS) models. The conclusion underscores the need for tailored automotive industrial policies to exploit the various economic development opportunities arising in a rapidly transforming global industry.AI Generated
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AbstractAfrica currently occupies a peripheral position within the global automotive industry. Apart from South Africa and Morocco, vehicle assembly is mainly small-scale, and the continent relies heavily on used vehicle imports. However, the market potential is substantial, and regional integration initiatives, such as the African Continental Free Trade Area (AfCFTA) are improving prospects for large-scale investment. Consequently, several countries are developing strategies to promote domestic and regional production. These developments are taking place at a time of rapid technological transition. While African demand for New Energy Vehicles (NEVs) is still low, there are several encouraging developments. These may be in manufacturing vehicles for export and/or import replacement, in the two-wheeler or truck and bus segments, or in the minerals-to-battery value chain where a key question is the potential for adding value to Africa’s abundant critical minerals. In Africa’s rapidly growing urban centres, innovative ‘Mobility as a Service’ (MaaS) business models are being rolled out leading to many local innovations. These opportunities need to be developed in line with each country’s national development priorities, market access potential, and the broader structural transformation trajectory of their economies.
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Conclusions
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Chapter 14. Global Shifts in the Automotive Industry. Outlining the New Arrangements Between Technology, Policy, Firms, and Markets
Grzegorz Lechowski, Martin Krzywdzinski, John Humphrey, Tommaso PardiThe global automotive industry is undergoing a profound restructuring driven by the transition to low- and zero-emission vehicles, particularly battery electric vehicles (BEVs). This shift is catalyzing significant changes in sectoral competition, global value chains, and the international hierarchy of car-producing regions. The chapter explores how technological innovations, government policies, and market dynamics are reshaping the industry, with a focus on the roles of both established and emerging players. Key topics include the regional diversity in technology adoption, the impact of government interventions on electrification, and the strategic responses of incumbent OEMs to new entrants. The analysis highlights the evolving geography of automotive production, with China emerging as a dominant hub, and the complex interplay between high- and low-wage locations in established markets. The chapter also delves into the future trajectory of the industry, considering the persistence of regulatory pressure for low- and zero-emission powertrains and the Western response to China's leadership in electromobility. Through detailed case studies and empirical evidence, the chapter provides a nuanced understanding of the ongoing transformations and their implications for the global automotive landscape.AI Generated
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AbstractThe global automotive industry is currently undergoing major restructuring processes as a result of fundamental changes in product technology—in particular, the shift to low- and zero-emission drives. This final chapter of the edited volume summarizes the main dimensions along which the evolution of the global automotive production system can be captured. We highlight the following four aspects of the ongoing transformation: (1) the globally heterogeneous trends in the adoption of new automotive technologies, particularly the shift from the internal combustion engine to new powertrain technologies; (2) the return of industrial policy and the strong regulatory government involvement in shaping the trajectories of regional vehicle markets; (3) the changing competition patterns between the globally dominant carmakers in the face of the entry of new competitors specialized in the production of electric vehicles and their key components; (4) the evolving geography of automotive production, with significant adjustments to the pre-existing landscape of regionalized but globally interconnected production hubs. While the future structure of an emerging global automotive system focused on the production of alternative powertrain vehicles remains open, these four dimensions help us understand the logic of the ongoing shift.
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- Title
- Global Shifts in the Automotive Sector
- Editors
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Martin Krzywdzinski
Grzegorz Lechowski
John Humphrey
Tommaso Pardi
- Copyright Year
- 2025
- Publisher
- Springer Nature Switzerland
- Electronic ISBN
- 978-3-031-80641-4
- Print ISBN
- 978-3-031-80640-7
- DOI
- https://doi.org/10.1007/978-3-031-80641-4
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