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A Profile of the Global

Auto Industry

A Profile of the Global


Auto Industry
Innovation and Dynamics
Mike Smitka
Peter Warrian

A Profile of the Global Auto Industry: Innovation and Dynamics


Copyright Business Expert Press, LLC, 2017.
All rights reserved. No part of this publication may be reproduced, stored
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brief quotations, not to exceed 250 words, without the prior permission
of the publisher.
First published in 2017 by
Business Expert Press, LLC
222 East 46th Street, New York, NY 10017
www.businessexpertpress.com
ISBN-13: 978-1-63157-296-8 (paperback)
ISBN-13: 978-1-63157-297-5 (e-book)
Business Expert Press Industry Profiles Collection
Collection ISSN: 2331-0065 (print)
Collection ISSN: 2331-0073 (electronic)
Cover and interior design by S4Carlisle Publishing Services
Private Ltd., Chennai, India
First edition: 2017
10987654321
Printed in the United States of America.

Abstract
This is the first book on the global auto industry viewed through the lens
of technology. We start by tracing how innovation shaped the first century
of its history. We then examine the industrys shifting footprint in Europe
and North America, and the rise of new producers, particularly China.
Succeeding chapters emphasize the role of suppliers in what is now a
high-tech industry. We describe new forms of collaboration that c hallenge
traditional supply chain relations, analyzing regulation as a driver of
innovation, and the enabling role of the materials science revolution, such
as the shift of steel from a commodity to a highly engineered product.
We cover innovations in management, from computer-aided e ngineering,
roadmapping, and just-in-time methods to the evolving role of workers
and public policy. We finish with an overview of electric vehicles, shared
mobility, and autonomous vehicles, concluding that they will not prove
disruptive.

Keywords
Automotive, Environment, Industry, Innovation, Supply Chain, Technology

Contents
Preface...................................................................................................ix
Acknowledgments..................................................................................xiii
Chapter 1 Introduction: The Global Auto Industry Through
the Lens of Technology......................................................1
Chapter 2 History 1: The Rise of Oligopoly.......................................7
Chapter 3 History 2: The Collapse of Oligopoly...............................23
Chapter 4 Changing Economic Geography......................................33
Chapter 5 China and the Rise of New Producers..............................47
Chapter 6 Automotive Innovation Model and the Supply
Chain: PACE Awards.......................................................67
Chapter 7 How Companies Innovate: Intellectual Property
and Roadmaps.................................................................79
Chapter 8 CAFE Standards and Materials Competition...................95
Chapter 9 The Rise of Digital Manufacturing and the
Boundaries of the Firm..................................................111
Chapter 10 New Technologies: Productions Systems,
Management, and Labor................................................127
Chapter 11 New Technologies: Disruptive or Evolutionary?.............143
References............................................................................................151
Index..................................................................................................153

Preface
We both are fascinated by the interaction of technology and industry.
Warrian has followed the steel industry for a half century witnessing the
transformation from the introduction of the basic oxygen process and
electric arc mini-mills. Automotive is today steels biggest customer.
Smitka has been visiting automotive suppliers for 30 years, primarily
in Japan and the US, while focusing on research and teaching on the
Japanese and more recently the Chinese economies. The auto industry
looms large in our respective home areas, the Greater Toronto area in
Ontario, and Detroit Michigan, though after a series of plant closings it
is no longer important in rural Virginia, where Smitka resides. Through
encounters at the Industry Studies Association, we coauthored a paper on
technology in the auto industry. That led to this book.
Viewing the industry through the lens of technology is unique, and
pulls together an array of themes. In the beginningthe late 19th and
early 20th centurythe auto industry was high-tech, replete with
thousands of startups, and the contemporary equivalent of venture capital. Within 20 years, a dominant product architecture emerged, as did
new production technologies, management methods, and distribution
strategies. By the 1920s in the US, and with different timing, in Europe
and Japan, dominant players emerged. By the late 1930s, the role of labor
was being restructured, with the rise of unions and personnel departments. High profits eventually attracted entry, abetted by management
that had come to focus on internal competition for power and not on the
market. This is a familiar industrial dynamic where technology is central.
Over the past 30 years, the industry has returned to its high-tech origins,
in which new vehicles are built using steels and other materials that did
not exist in 1980, with the drivetrain and safety systems replete with sensors and other electronics, all controlled by 100 million lines of software.
We pick up that thread in our conclusion: will electric cars, autonomy,
and new mobility models (Uber and others) prove disruptive?

x PREFACE

The role of suppliers is another theme that arises naturally through


a focus on technology. In the early years, the presence of suppliers facilitated entry. It is doing so again today, as evidenced by firms such as Tesla
in the US and Geely in China. Car companies are by and large not in the
business of writing software, or developing new sensors, or making new
materials. The auto companies have spun off most of their internal parts
manufacturing, focusing on vehicle design, final assembly, marketing,
and technology integration. In such a decentralized system, what drives
new technologies, and how are R&D efforts coordinated? We believe this
book contributes to an understanding of those issues.
Technology does not consist of blueprints, but rather is embodied
in production systems, in teams of engineers, and in management structures and methods. This broad perspective is crucial in several ways. First,
it leads to a focus on the new geography within markets, and globalization across markets. Just-in-time management technologies underlie
the growth of concentrated production regions in Europe and North
America, reflected in the US, for example, in the closing of plants on the
coasts and a recentralization of suppliers and assembly in an auto alley.
In the background are changes in shipping technologies, from the growth
of trucking to the development of containerization and roll-on/roll-off
ships that facilitate movement across borders.
Technology is also central to understanding the rise of new producers. More than half of global production and consumption now takes
place outside of the high-income markets of Europe, North America, and
Northeast Asia. Two of the new national players, Mexico and Eastern
Europe, are incorporated into the new geography of their neighboring
higher-income regions. Their growth reflects the rise of a global industry,
with centrally developed platforms using a common set of materials and
components around the world. Technology can and is transferable, but
that occurs through a gradual process of on-the-job training, complemented in some countries by formal apprenticeship programs and classroom training. That has led to a switch away from hire-and-fire factory
labor to what Jrgens and Krzywdzinski (2016) term New Worlds of
Work with low turnover and high skill content.
China is representative of new producers, with high levels of protection
for the domestic market. As in many other countries, this led to rampant

PREFACE
xi

entryin 2016 several dozen producers remained in businessand gross


inefficiency. Despite that, the sheer size of the domestic m
arketit is
larger than either North American or Europehas allowed an array of
firms to achieve scale. What will the role of China be, going forward?
It is already engaged in low levels of exports on the basis of product differentiation, as specific Volvo and Buick models are only made in China
and are exported to other markets. But that is a general phenomenon: the
BMW plant in South Carolina is the sole global source for certain models
and exports 70% of its output. The real question is rather one of technology: with R&D centers in Shanghai for virtually all of the major players
in the global industry, suppliers, and assemblers, will China emerge as a
third pole of global car development?
We have enjoyed pulling our thoughts together on these issues, and
have labored to present them in a readable manner. This is not an academic book, so we have not burdened it with footnotes and references.
It does, however, remain grounded in the work of researchers in an array
of disciplines, as well as a sensitivity to management perspectives from
interviews and engineering presentations at dozens of companies, from
work experience inside factories, and from an interestand in the case of
Warrian, hands-on experiencein the realm of public policy. The latter
is reflected in our willingness to take a stance on issues. We hope that also
makes this a more compelling book.

Acknowledgments
Mike Smitka wishes to acknowledge and thank Gerpisa Conference and
Industrial Studies Association workshop participants as well as sabbatical funding from Washington and Lee University and research assistance
from Reem Kandil and Gyung Jeong. Peter Warrian thanks the ISA, colleagues at the Innovation Policy Lab, University of Toronto and the Automotive Policy Research Centre, McMaster University.
We both must also thank our wives, Gloria and Margret, for their support, patience, and endurance through too many pedantic conversations.

CHAPTER 1

Introduction: The Global


Auto Industry Through the
Lens of Technology
In the first two decades of the 20th century, the automotive industry was a dynamic, high-tech industry frequently gracing the pages of
Scientific American. Outside investors provided seed money to hundreds
of ventures, almost all of which soon failed. The occasional success generated great wealth, filling the Detroit Institute of Art with the works of
European and American masters, and outside the United States enriching
the founding families of Fiat, Citron, Honda, and Volkswagen. Other
fortunes were made by parts suppliers and distributors. Today the industry is again technologically dynamic, replete with brash new entrants,
venture finance and a host of playersparticularly supplierswith R&D
levels typical of other high-tech industries.
Yet the industry remains dominated by large, incumbent firms, the
youngest of which have been producing cars for 50 years. While the industry has been international almost from its inception, for a century
multinational operations were either extensions of domestic operations,
or as with GMs Opel subsidiary in Germany, decentralized, stand-alone
enterprises. Today the industry is increasingly global, with major players expecting to undertake production and sales of vehicles in multiple
markets. Designing and engineering now seek to reflect the tastes of
middle-class consumers inside and outside the home market as well as the
ability to source identical materials and components around the globe.
The car companies themselves now occupy only a small share of the
value chain. Most production costs and manufacturing jobs are accounted
for by suppliers. Even more jobs are downstream, with the distribution,

A PROFILE OF THE GLOBAL AUTO INDUSTRY

local marketing and the financing of inventory and sales handled through
independent dealerships. Assemblers provide only 20 percent of the industrys total value added. Given this web of firms and function, will new technologies result in incremental change to existing vehicle architectures and
product market segmentation? Or will we see a reorganization of the value
chain, with for example new suppliers for electrical components displacing
piston and transmission suppliers, while new business models for vehicle
ownership and transportation services undermine the role of dealerships?
Our answer is definite: change will be incremental, as we elaborate in
Chapter 11. To develop that case, we analyze the historical development
of the industry from its inception in the late 19th century through today
using technology as a running theme. Inventions and breakthroughs
including new business models, such as the electric car sharing of Autolib
are the stuff of headlines. From the perspective of real businesses, however,
the process of innovationdeveloping ideas into commercial products,
that is, putting better cars on the roadis a slow process, moving from
an initial implementation to commercially meaningful products through
a gradual process of learning by doing.
A set of simple models provides a framework for our analysis. First is
industrial organization, using the concepts of monopoly, oligopoly, and
monopolistic competition to illustrate long-run change in the competitive structure of the industry. A second is an emphasis on typologies of
technology that emphasize its embodiment in the knowledge and working practices of teams of people. Invention may capture headlines, but
bringing a product to market entails complementary innovation of many
interrelated systems to enable such inventions, and then their refinement
via good engineering. Technology, however, is not only limited to physical products and their production, but also to how products are conceived
and configuredmarket niches and commercial strategyand how they
are distributed and used. To use basic economics jargon, how organizations are internally organized, the employment of novel business strategies and improved marketing, and alternate ways of coordinating across
the value chain change the production possibilities frontier. Third and
finally, transportation systems are embedded in a complex array of institutions that include roads and regulations, and how we organize around
mobility. Of particular concern are regulations regarding safety, fuel

INTRODUCTION: THE GLOBAL AUTO INDUSTRY

efficiency, and emissions, which we analyze from a technology perspective in Chapters 6-8.
These abstract ideas can be linked to concrete issues. First, over the
past 50 years entry into the industryincluding the creation of new
brands and product segments such as minivans and more recently crossover vehiclesexpanded the number of new vehicle models available to
consumers three-fold. In the process, both margins and per-vehicle sales
volumes shrank. Can new vehicle producers obtain acceptable returns,
sufficient to fund operations on a continuing basis? Even worse for incumbents, will the reliance of car companies on suppliers for key technologies
batteries, power controls, radar, transmissionsfacilitate the entry of
new players? Think here of Great Wall, the leading producer of SUVs
and crossovers in China, which is now the worlds largest motor vehicle
market. Similarly, will improved simulation-based engineering tools and
more flexible manufacturing technologies allow firms to develop new
models more quickly and cheaply? The start-up Local Motors takes this
to its logical extreme, proposing to sell crowd-sourced designs with the
body printed to customer specifications using additive manufacturing
technologies. These changes make earning profits even more challenging.
New technologies often prove disruptive. Will the development of
electric vehicles undermine existing players, and facilitate the entry or
growth of relatively new firms, such as Tesla in the United States or BYD
and Chery in China? Innovations are not limited to hard technology:
ride sharing and autonomous vehicles, lumped under the catch-phrase of
Mobility 2.0, could reduce the need for individual vehicle ownership.
Yet one more set of issues lie in the nitty-gritty details of how the value
chain is structured. What drives innovation? Here there are both enablers,
the material science revolution and digital engineering, and new regulatory
pressures, in competing demands for energy efficiency, low emissions, and
enhanced safety. How do firms reorganize internal operations and interfirm
coordination to meet these new demands with new business models including global design and production? This also has the potential to shift
the locus of core functions, from where manufacturing locates, particularly
assembly plants, to where engineers reside. For example, will this lead to a
recentralization of functions with Detroit at the center of engineering for
a global manufacturing footprint, or will engineering be dispersed across

A PROFILE OF THE GLOBAL AUTO INDUSTRY

multiple regions including the North American auto alley, the European
auto corridor and some as yet unnamed counterpart in China?
We believe the presentation of these issues is enhanced by taking a
stand. In Chapter 11 we sketch why we believe the industry is not undergoing a transformative revolution. Key is our understanding of technology
as the knowledge of how to do things, embedded in complex structures
from how production is organized across firms to perceptions of cars as
symbols of status and enablers of personal independence. Blueprints may
capture the hard components of a finished vehicle, but the know-how
required to develop the next model resides in teams of engineers backed
by specific digital tools and their ability to work with leading suppliers.
Manufacturing likewise consists not only of a particular layout of specialized machinery, but also in the tacit knowledge including trade secrets for
how to utilize and improve that layout to produce high-quality parts in
volume and on time. How dealerships are organizedwho controls the
customer interface, who sells the finance package and warrantiesand
how the sales operation responds to the ebb and flow of demand for specific models is also a form of technology. The idea that this is simple and
that assemblers can sell the vehicles they produce directly to consumers
has been disproved time and again and in multiple countries since the
franchised dealership system developed a century ago.
Critical to our view is that new technologies are generally expensive
in their first implementation. Moving toward the autonomous vehicle,
for example, entails increasing costs. At the same time, the normal economists argument points to diminishing returns from expanding the set
of product attributes. Keeping in your lane in good weather, and automatically braking as necessary to maintain a safe following distance on
an expresswaythose technologies are already on the road, and bring
clear safety benefits. How valuable is extending that capability to all sorts
of inclement weather, or for downtown driving where construction,
double-parking and pedestrians require much more expensive technologies? Although there are niche applications, at present the business case
for greater vehicle autonomy is unclear. While vehicle-to-vehicle (V2V)
communication and smart infrastructure can help overcome such obstacles, implementing that would require a wider social commitment
to finance such improvements. Likewise Mobility 2.0 points to the low

INTRODUCTION: THE GLOBAL AUTO INDUSTRY

utilizationperhaps 4 percent of the dayof a very expensive asset, encompassing a range of proposals to monetize this parked capital good.
However, to be viable, vehicle sharing and other ideas require shifts in
long-standing habits of not needing to wait, social attitudes where vehicle ownership is a powerful communicator of status, and institutional
changes in licensing, insurance, and so on. In sum, increasing costs for
new technologies run into diminished marginal benefits. The incentive to
make any single change in isolation is thus weak, while benefits require
multiple simultaneous innovations. Existing systems are well-adapted to
the status quo. The coordination issue is thus a very real barrier to revolutionary change.
In summary, our historical approach will suggest why we do not believe that we are seeing a revolution in the automotive industry. It will also
provide a framework that offers insights into topics from the process of
globalization and related shifts in the geography of the industry, to the organization of R&D, and the shift in the structure of the value chain that
is enhancing the role of suppliers while continuing to improve productivity. Even if there is no revolution, cumulative change does matter. As illustrated in Figure 1.1, gradual improvements in labor productivity mean

Figure 1.1 U.S. Automotive Productivity: Workers per 100 Vehicles

A PROFILE OF THE GLOBAL AUTO INDUSTRY

that despite a return of output to its peak of the late 1990s, manufacturing employment remains one-third below pre-2008 levels. Furthermore
this is in a market where vehicles are larger and far more complicated than
a quarter century ago. Worse, and not specific to the automotive sector,
manufacturing compensation no longer moves in line with productivity.
But the industry remains important: the sector employs 900,000 workers
in the United States alone, and the numbers are similarly large in other
producing countries.
We trust you will find the story as fascinating as we do.

Index
Accountability, 20
Acura, 32, 105, 108
All-steel auto body, 9899
American Business Abroad: Ford on Six
Continents (1964), 18
American Motors (AMC), 2324
Amino, 117118, 125
ArcelorMittal, 65, 104108, 110
S-In-Motion project, 121125
ASEAN, 44
Assemblers, 2, 4, 10, 13, 1516, 20,
43, 45, 49, 56, 58, 63, 68,
127, 136138
Audi, 10, 3334, 4445, 52, 87, 140
Auto Pact (2005), 43, 136
Automobile industry
business model, 19th century,
1217
early years, 711
engineering operations, 36
initial ventures, 1112
innovation diffusion, 116117, 125
learning by doing, 49
oligopoly market, 1821
Automotive News PACE Awards
BorgWarner, 8789
criteria, 6970
Delphi, 8487
examples, 7072
Federal-Mogul, 8284
innovation analysis, 7278
Bacon, Roger, 7
Battery electric vehicles (BEVs),
5657, 62, 97
Beijing Auto Show 2016, 57
Beijing Automotive Industry
Corporation (BAIC),
52, 56,60
Benz, Karl, 7, 1112
Big Three. see GM (General Motors,
Chrysler and Ford Motor
Company)

Black Belts, 131


Bland styles, 24
Block Exemption, 42
BMW, 32, 33, 4445, 64, 69, 87
Boosterism, 17
BorgWarner, 79, 8789, 113, 115
Bosch, 12, 3536
Bosch, Robert, 12
Brands/branding, 3, 1920,
27, 3032, 34, 42, 50,
5657, 6061, 64, 66, 82,
130132, 140
Budd Company, 19
Buick, 10, 19, 54, 63
Buick Sail, 54
Business models, 23, 1213, 1718,
20, 93, 110, 116, 125
BYD, 3, 56
Cadillac, 10, 19
Canada, 23, 36, 3839, 4344,
4748, 90, 102, 107, 119,
124, 133134, 136, 141
Car companies, 1, 3, 1314, 1617,
26, 34, 36, 42, 44, 65, 7677,
99100, 107, 118, 124, 133
Carriage trade, 7, 12, 133
CATIA, 113
Chandler, Alfred, 20
Chery, 3, 56
Chevrolet, 10, 1819, 65
Chevy, 32
China, 34, 28, 3436, 4546, 47,
96, 119, 124, 127, 130131,
133, 140, 142
distorted market, 5557
distribution, 6364
growth of auto industry, 4950
joint ventures, 5455
origin, vehicle production, 5054
parts suppliers, 5859
political economy, 63
technology, use of, 5963

154 INDEX

China Association of Automobile


Manufacturers (CAAM),
57, 63
Chrysler, 10, 1819, 21, 23, 26, 38,
46, 87, 133134, 141
Chrysler, Walter, 10
Citron, 1, 14, 49, 52, 141
CO2 emissions, 71, 74, 95
Commercial strategy, 2, 8, 1112, 57,
61, 7072, 7678, 8485,
87, 91, 93, 108
Compact cars, 2326, 28
Computational Fluid Dynamics
(CFD), 101, 111, 112
Computer-Aided Engineering (CAE),
111, 112, 113, 116
Computer-Aided Manufacturing
(CAM), 86, 111, 112,
114, 116
Corporate Average Fuel Economy
(CAFE), 29, 95110
Corporate politics, 24
Cosma, 105108, 122, 124
Crossover utility vehicles (CUVs),
2932, 61
Curved Dash model, 13
da Vinci, Leonardo, 7
Daewoo, 45
Daihatsu, 27
Dealerships, 2, 4, 16, 24, 50, 6364,
130, 140
Delphi, 3536, 60, 65, 71, 77, 79,
81, 8487, 89, 102, 135
Delphi Software Package, 113114
Detroit Athletic Club, 20
Detroit Institute of Art, 1
Detroit Three, 2021
end of oligopoly, 2327, 29, 31
in Canada, 43
quality, 130131
unionization, 133135
Diesel, 2829, 46, 71, 74, 80,
8384, 88
Digital engineering, 3, 33, 73
Digital manufacturing, 111125
Distribution, 1, 16, 6364, 102
Distributors, 1, 65
Divisional autonomy, 20

DMG Mori, 119


Dongfeng Motors, 50, 5253, 56, 60
Double-parking, 4
DuPont, 20, 99
Durant, Billy, 10, 20
East German Trabant, 28
Economies of scale, 23, 27, 30, 35,
37, 41, 4748, 55, 64, 98
Electric vehicles, 3, 78, 11, 6162,
71, 97, 100
Employment, 2, 6, 53, 58, 66, 127,
134, 136137, 142
England, 7, 18, 27
Europe, 10, 1216, 19, 2731,
3336, 3839, 4142, 4647,
55, 60, 6364, 68, 70, 72, 80,
96, 119, 127130, 133135,
140142
F&I (finance and insurance), 64
Federal Mogul, 36, 71, 79, 8183,
89, 113, 114115
Fiat, 1, 10, 12, 15, 40, 46, 87,
140141
Finite Element Analysis (FEA), 101,
111, 112
First Automotive Works (FAW),
5053, 56, 60
Ford Motor Company, 10, 1415,
2021, 2526, 28, 32, 3638,
4042, 45, 48, 69, 87, 99100,
118119, 124, 133136
end of classic work structure,
141141
model T, 14, 1819
monopoly market (in U.S), 1819
vertical integration, 135
Ford, Henry, 8, 10, 1314, 16,
1819, 133
Four-wheel buggies, 12
France, 78, 10, 15, 23, 28, 36, 49,
88, 107, 124
Panhard system, 12
unionization, 140141
Fringe firms, 28
Fuel efficiency
goals, complications, 9698
regulation, 9596

INDEX
155

GATT, 40, 42
Geely, 46, 56, 5961
Germany, 7, 10, 12, 29, 34, 36, 41,
45, 54, 70, 88, 119, 137140
Global markets, 3334, 4446, 93
Globalization, 5, 4243
GM (General Motors), 10, 2021, 25,
28, 3031, 3840, 43, 45, 50,
5456, 5859, 6163, 84,
112113, 117, 131, 134, 136
vertical integration, 135
Graham-Paige, 23
Hino, 27
Honda, 1, 2627, 32, 45, 65, 87,
95, 10406, 108109,
123124, 130
Horch, August, 10
Hudson, 23
Husky Injection Molding, 119
Hyundai, 27, 32, 35, 87, 124
Import Substitution Industrialization
(ISI), 4749, 55, 62
Innovation, 23, 5, 12, 20, 60, 65,
6778, 79, 8393, 99100,
105, 110, 116117,
125126, 129
Insurance, 5, 17, 34, 64, 107, 124,
133134
Insurance Institute of Highway Safety
(IIHS), 124
Internal combustion engines (ICEs),
7, 1112, 2021
International Motor Vehicle Program
(MIT), 27, 127
Invention, 2, 8, 13, 67, 70, 73, 77
inventory, 2, 1617, 129
Isuzu, 2627, 138
Italy, unionization, 7, 10, 46,
140141
Japan, 12, 1516, 19, 2528, 31,
3436, 38, 4042, 4445,
4748, 55, 5859, 64, 72,
92, 96, 107, 117, 119, 124,
140142
lean production, 128133
unionization, 137139

JCI, 35, 58
JD Powers Initial Quality Survey,
130131
Job One, 131
John Deere, 87
Joint ventures, 4950, 5261, 6466
Just-in-time manufacturing, 17
Krafcik, John, 127
Lean production/manufacturing,
130132, 138, 140141
role of labor, 127128
Leapfrogging, 62
Levassor, 12
Lexus, 32, 34
Licensing, 5, 28, 40, 52, 59, 89, 93
Lincoln, 32, 118
Local marketing, 2, 16, 41
Local Motors, 3
Luxury brand, 32
The Machine that Changes the World,
26, 127
Malaysia, 55, 59
MAN, 87
Management revolutions, 127142
Manual labor, 128
Manufacturing for Design (MfD), 123
Manufacturing jobs, 1, 93
Manufacturing process management
(MPM), 115
Market integration, 4243
Market niches, 2
Market structure, 2829
Mass production, 14, 18, 9899,
127, 133
Materials competition, 95104
Maxwell, 10
Mazda, 26
McDonnell Douglas aircraft, 119
Mercedes, 29, 32, 38, 42, 45
Metallurgy, 102, 104, 107, 121
Mexico, 3839, 4243, 47, 136, 140
labor costs, 34
Mitsubishi Motors, 2627, 59
Mobility 2.0, 34
Model proliferation, 2932, 35,
37, 127, 132

156 INDEX

Monopolistic competition, 2, 2931


Monopoly, 2, 1819, 55
NAFTA, 28, 3536, 39, 4344, 55, 95
Nash, 23
National Network for Manufacturing
Innovation (NNMI), 92
New technologies, 25, 2932, 44,
70, 79, 9394, 110, 127142
management tools, 8991
Nissan, 15, 2627, 31, 34, 39, 46, 51,
87, 138

Products, 2426, 29, 32, 36, 40,


4244, 46, 49, 52, 59, 61,
69, 72, 8283, 86, 8889,
9394, 96, 101, 111, 114116,
119121, 128, 133, 136
Proton, 59
PSA, 87

OEMs, 76, 82, 84, 96, 102, 105, 111,


113, 116117, 121, 124125
Oldsmobile, 1314, 19
Oligopoly, 2, 1820
collapse, reasons for, 2332
Opel, 1, 8, 45, 54

R&D (Research and Development),


1, 5, 50, 58, 6566, 68, 73, 79,
81, 85, 89, 91, 93, 107, 127
Rasmussen, Jrgen, 19
Reagan, Ronald, 26
Regulatory change, 2829
Renault, 23, 2728, 46, 49, 87, 140
Research-Design-ManufacturingSales-Service-Recycling, 116
Retailing, 1617, 42
Return-on-investment (ROI), 20

Packard, 23, 136


Pan Asia Technical Automotive
Center (PATAC), 60
Peugeot, 13, 15, 141
Plastics injection molding
(casestudy), 119121
Poland, 39, 142
Pontiac, 19, 118
Porsche, 1011, 29, 133
Porsche, Ferdinand, 10
Power source, 12
Presidents Council of Advisors on
Science and Technology
(PCAST), 92
Price leadership, 20
Product cycle, 24, 32, 41, 9697, 113
Product differentiation, 13, 30, 44, 63
Product integration, 4243
Product life cycle management
(PLCM), 113116
Product segments, 3, 46, 85
Production costs, 1, 1820, 53,
91, 132
Production part approval process
(PPAP), 122
Production possibilities frontier, 2
Productions systems, 127142
materials and, 99100

Safety issues, 24, 17, 30, 35, 67,


7275, 79, 81, 85, 95, 100,
105, 107109, 111112, 124
Scientific American, 1, 89
SEAT, 28, 140
Shanghai Automotive Industry
Corporation (SAIC), 50, 52,
54, 5657, 60
Shanghai VW (SVW), 5354
Sheet hydroforming, 117119
Siemens, 113114
Six Sigma, 115, 131
Skoda, 28, 140
Sloan, Alfred, 20
Small and Medium Enterprises (SMEs),
9193, 116119, 125
Small cars, 24, 39, 41, 45, 52, 66, 135
Smaller firms, production strategy,
2324
Solid Edge CAD software
(Siemens), 114
Special export zones (SEZs), 51
Sport utility vehicles (SUVs),
3, 2930, 32, 61, 70
Start of production (SOP), 69, 122
State-Owned Enterprises (SOEs),
5253, 60
Steel industry, 19, 9697, 121

INDEX
157

Steel Market Development Institute


Roadmap, 113
Steel versus aluminum, 102104
Streetcars, 7, 13, 17
Studebaker, 23
Subaru, 27, 36
Suburbanization, 7
Supply chain, 63, 6778, 79, 91, 93,
101102, 104105, 110, 111,
113, 116, 120122, 136, 142
Suppliers, 15, 1415, 17, 3338, 40,
4445, 49, 5354, 5863, 65,
6769, 7172, 7678, 7984,
87, 89, 9193, 95, 101102,
105, 109110, 111112, 116,
119, 121, 123, 125, 127, 129,
131132, 135139, 141
Suzuki, 27, 36
Tacit knowledge, 4
Technology, 121, 45, 49, 52, 5963,
65, 6768, 7879, 81, 8793,
9697, 104105, 107109,
117119, 124, 127
Technology roadmaps, 68, 7981, 85,
89, 108
ArcelorMittal, 107108
Door Ring project, 104107
Honda, 108109
Magna Cosma, 108
Tesla, 3, 17, 57
Thailand, 44, 55
Tier I supplier, 101, 105, 116, 125,
131132
Tier II supplier, 110, 131, 132
Tier III supplier, 110
Toyota, 1516, 2627, 31, 34, 45, 87,
103104, 129131, 138139
TQM, 131
Transoceanic trade, 42

Unibody architectures, 30, 99100,


102103, 106, 121, 124, 132
Unigraphics, 113
Unilateral trade changes, 4344
Unionization, 133, 135137
United Auto Workers, 20, 25, 134
United States, 7, 11, 1314, 16,
2527, 2931, 3335,
3739, 4246, 4748, 50,
52, 57, 60, 6365, 68, 72,
81, 90, 92, 102, 107, 120,
124, 127, 129131,
133134, 138, 142
unionization, 135137
Urban dealers, 16
Usinor, 121
USSR, 50
Value chain, 13, 5, 13, 49, 68, 120,
125, 127, 129130
Vehicle designs, 17, 101, 111
Vehicle identification numbers
(VINs), 17
Vehicle-to-vehicle (V2V), 4
Venture capital, 10
Virtual car, 31, 101
Volkswagen (VW), 1, 10, 2829, 34,
4041, 45, 4950, 5254,
56, 59, 6263, 65, 87,
139141
MBQ system, 45
Voluntary export restraint (VER),
26, 35
Volvo, 42, 46, 50, 61, 63, 141
Welding robots, 31
Willys Overland, 10, 23
Workplace environment, 128, 134, 137
World War I (WWI), 18
World War II (WWII), 15, 23

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