Assembler-Supplier Relations in the Auto Industry: Globalisation and National Development

Abstract

Governments in developing countries continue actively to promote the auto industry. However, the benefits derived from this industry are changing as a result of global restructuring. The key relationships in the auto industry are between the major assemblers and a small number of first-tier suppliers with global reach. The latter are increasingly responsible for designing and delivering component systems and sub-assemblies at multiple locations around the world. This restructuring has direct consequences for auto component manufacturers in developing countries. This paper examines the extent to which the practices of standardisation of vehicle designs across countries and the use of the same supplier across many markets are being applied in these countries. It examines the consequences of this change for the auto components industries of Brazil and India.

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