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Reshoring: Opportunities and Limits for Manufacturing in the UK – the case of the Auto Sector

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  • David Bailey
  • Lisa De Propris

Abstract

?In recent years, ?offshoring? and ?outsourcing? have transformed fundamentally nationally based auto sectors into global networks of design, production and distribution across the global value chains coordinated by the major automotive Original Equipment Manufacturers (OEMs). As manufacturing activities tended to be shifted to low-labour cost locations in Asia, Africa and Latin America, high-end design, R&D, product development have stayed anchored mostly to high-cost and high knowledge-intensive home economy locations (perhaps with the except of some design and styling activities which are often located in major end markets around the world. However, very recently the weaknesses of and risks inherent in such global value chains (GVCs) have been exposed, triggering attempts to rethink their nature and also raising possibilities to reshore some manufacturing activities to ?home? countries. A combination of a more competitive exchange rate (despite the very recent appreciation of sterling), increased transport costs, rising wages in key areas of China, and a greater awareness of supply chain resilience have all contributed to a perceived change in some business ?fundamentals?. The potential for some supply chain relocalisation also links in with the ?servitisation? of manufacturing including the auto sector and shift to a hybrid model where manufacturing and services are increasingly intertwined. However, there are limits as to how far this can go and these raise some important questions and issues over the possible role for industrial policy.?

Suggested Citation

  • David Bailey & Lisa De Propris, 2014. "Reshoring: Opportunities and Limits for Manufacturing in the UK – the case of the Auto Sector," Revue d'économie industrielle, De Boeck Université, vol. 0(1), pages 45-61.
  • Handle: RePEc:cai:reidbu:rei_145_0045
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    Citations

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    Cited by:

    1. Gabor Tury, 2019. "Electromobility in the Automotive Industry. What Role Does Technology Change Play in the Geographic Pattern of Production?," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 7(2), pages 112-120, December.
    2. Młody Michał & Stępień Beata, 2020. "Principles of reshoring development in luxury goods sector," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 56(2), pages 140-158, June.
    3. Barbieri, Paolo & Boffelli, Albachiara & Elia, Stefano & Fratocchi, Luciano & Kalchschmidt, Matteo, 2022. "How does Industry 4.0 affect international exposure? The interplay between firm innovation and home-country policies in post-offshoring relocation decisions," International Business Review, Elsevier, vol. 31(4).
    4. Młody Michał & Stępień Beata, 2020. "Principles of reshoring development in luxury goods sector," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 56(2), pages 140-158, June.

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