Editeur : Anima/Edisud, notes et études Anima n°11
Auteur : Fabrice Hatem (sous la direction de), assisté d’Anne-Claire Vu
The automotive sector in the euroméditerranean region (2005)
Until recently, the automobile sector played a relatively limited role in Mediterranean economies, which had not developed powerful industries and were thus not able to enforce themselves as major actors at world or even regional level. Still today, production and total exports of the MEDA countries only reaches a relatively modest level, whether for equipment or motor vehicles and their external trade balance remains largely in deficit.
However, the past twenty years have seen a favourable evolution: development of the flow of sub-contracting contracts for the manufacture of certain items of equipment, the installation of mainly European equipment makers, or automobile constructors in the case of Turkey. This country sets the example, for the moment unique in the MEDA region, with the gradual building of a real automobile sector, sparked off by the arrival in the 1970s of a small number of foreign constructors, followed by their suppliers, and finally by the development of an industry of local equipment manufacturers. Today, after the massive boom of the 1990s, this industry covers a growing share of the local market and also exports in increasing quantity, mainly towards Western Europe.
Other countries are also developing their automobile industry, albeit more modestly, especially Tunisia, where the production from a component and equipment activity is intended for the assembly sites in Western Europe and Morocco.
Recently, the constructors and equipment manufacturers active on the European market have shown an increasingly strong interest in a location in the countries south of the Mediterranean and especially in the Maghreb, where there is an abundant labour force with relatively moderate costs. The game is, however, far from over for the MEDA countries. Beyond the fact that only certain of them (especially Turkey, Morocco, Tunisia…) satisfy the pre-requisites of companies in terms of political stability, legal security, quality of infrastructures and/or the level of wage costs, the future of the automobile industry in threatened, even in these countries, by several concomitant movements:
– on the one hand, the rise in importance of the automobile industries of Eastern Europe, towards which massive streams of investment are flowing and sub-contracting contracts from Western Europe are turning;
– on the other hand, the competition from extra-European countries, which should continue to grow in the years to come.
– finally, the rise in the technological content of these activities, which brings with it growing demands in terms of of the quality of labour, the industrial environment, the supply chain networks, etc.
Faced with the twin challenge of increased competition in the European market as well as their domestic markets, the Mediterranean countries should therefore double their effort of modernisation and the creation of an appropriate business environment if they intend to grasp the opportunity which is offered by the current strategies of internationalisation and relocation of those automobile companies which originate in developed countries.
As for the European automobile industry, following the crisis of the 1980s, as a result of the rise in importance of Japanese competition, it has experienced a significant correction, accompanied by a powerful internationalisation movement. The latter took, in part, the form of relocations, likely to benefit more particularly the Eastern regions of the continent. Representing, as it does, an opportunity for the low labour cost countries (e.g., Romania), this movement is symetrically perceived as a factor for the industrial desertification for the countries with high internal costs (e.g., France), and as representing direct competition as well as a direct threat for the MEDA countries which would like to develop the very same sectors.
It is therefore interesting to study this activity in a systemic perspective which throws light both upon the sets of problems of the developed countries of Western Europe and those of the countries situated at various stages of industrialisation such as those in the MEDA region and the countries of Eastern Europe. This is what is proposed in this report, which links the various points of view, so as subsequently to examine to what extent coordinated industrial policies are possible or desirable.
An analysis of the industry does, however, draw attention to the strong specificities of the upstream industrial segments (equipment) as well as those downstream (automobile construction), whose relatively different technico-economic features demonstrate specific location behaviour. It is for this reason that the highly concentrated automobile construction industry will locate more willingly in areas which offer a very well-structured industrial environment, with quality infrastructure close to the end-user market. As for the equipment industries, the location criteria may be highly variable depending on the case. The relatively unskilled labour-intensive activities (e.g. : wiring…) are likely to be more sensitive to the question of wage costs, whereas others, of higher technological content, (e.g.: certain electronic components) will be more attracted by the existence of a high level industrial environment and a satisfactory level of skilled labour. But all will be sensitive to the possibility of rapid and reliable supplies for their assembly sites, which assumes either the existence of quality logistics, or an installation very close to these sites.
In the first part, the analysis will concentrate on the structures of the automobile sector and the overall trends currently at work concerning the supply, the demand and technological evolution. In the second part, an examination will be made of the evolutions underway in the geography of the activities within the Euro-Mediterranean region and their consequences for the different groups of countries concerned, especially those of the MEDA region. The conclusion will put forward a number of courses of action intended to improve the attractiveness of the automobile sector in MEDA countries: intensification of the effort of regional cooperation, improvement of the local business environment, an increase in the effort to understand the markets and to promote the MEDA offer.
An electronic version of this document can be downloaded : http://www.animaweb.org/uploads/bases/document/Et11_Automobile.pdf
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