20.04.2017

The Automotive Sector in Emerging Economies

The ever-growing automotive sector of emerging countries nurtures hopes and concerns for the future, reports a new study by FES

Photo: iStock.com / RicAguiar

A new study by Friedrich-Ebert-Stiftung puts the current trends and perspectives of the automotive industry into spotlight, examining its impact on national and global market dynamics, industrial relations and trade union work.

The automotive sector is among the most vulnerable to changes in the economy, be it due to recessions or booms. Despite a constant growth throughout the last decades, the automotive industry has experienced evident structural changes.

One of the latest developments to be observed are the steadily expanding supplier companies that have, meanwhile, reached sizes comparable to their original equipment manufacturers themselves.

It is no news that today the car industry is dominated by broad transnational companies from a few countries that increasingly outsource certain divisions of their vehicle production process across borders, thus impacting the national markets of other countries as well.

This development has provoked reactions from different stakeholders in the car industry, topic of The Automotive Sector in Emerging Economies: Industrial Policies, Market Dynamics and Trade Unions, an edited volume by FES that brings together perspectives from Brazil, China, India, Mexico and Russia.

Accordingly, country governments see themselves less and less competent to keep under watchful gaze the consequences arising from production procedures, capacities and properly regulated investments, as the dimensions of the growing car industry have exceeded their political sphere of influence.

Trade Unions observe the current developments with mixed feelings. For them, further intensified globalisation and its impact on the lives of workers, must be taken carefully into account. Yet, these structural changes also harbour new opportunities and hopes for capacity building and the formation of a transnational solidarity.

For countries with emerging economies, the constant growth of global value chains in the automotive sector opens the chance to secure itself a strategic economic pillar. Considering their endeavours to promote their own development, they see the possibility to gain a large slice of the global production capacity, originally seen as a natural domain of the so called Global North.

Starting point for the study was an international workshop in Sao Paulo, co-organised by the FES offices in Russia and Brazil, in November 2015.

Have a look and download the entire paper here.

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