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Staying alive in the global automotive industry: what can developing economies learn from South Africa about linking into global automotive value chains?


  • Justin Barnes
  • Mike Morris


The insertion of the South African automotive industry into the global mainstream of vehicle manufacturing highlights a number of valuable analytical lessons for developing country automotive economies. The global value chains that dominate the automotive industry have fostered substantial upgrading within the South African automotive industry but pervasive international trends also limit the opportunities for value addition and more substantial increases in vehicle output. Key trends in this regard relate to tightening market conditions in the developed economies into which South African vehicle producers and automotive component manufacturers supply, excess global production capacity and the emergence of new low cost production locations principally in Asia. The benefits to the South African automotive industry of engaging in global value chains are clear but the long term sustainability and development of the industry remain in question. The importance of industrial policy in shaping any national industry's insertion into global value chains, as well as the need for ongoing upgrading and adoption of world class manufacturing standards is stressed as pivotal to maximising the gains that can be derived from insertion into global automotive value chains. L'insertion de l'industrie automobile sud-africaine dans les flux mondiaux de l'industrie des véhicules permet de tirer un certain nombre de leçons précieuses pour l'industrie automobile des économies en développement. La mondialisation de la chaîne de valeur a encouragé la modernisation substantielle de ce secteur en Afrique du Sud. Mais les tendances internationales limitent par ailleurs les possibilités d'accroître la valeur ajoutée ainsi que la production automobile. A cet égard, les éléments clés sont l'étroitesse des marchés des pays développés clients des producteurs automobiles et des équipementiers sud-africains, un excès de la capacité de production mondiale et l'émergence de localisations de production à bas coût, essentiellement en Asie. L'intérêt de l'industrie automobile sud-africaine à s'engager dans les chaînes de valeur mondiales est clair mais la viabilité et le développement du secteur à long terme demeurent problématiques. L'importance de la politique industrielle dans la détermination de l'insertion d'industries nationales dans les chaînes de valeur mondiales ainsi que le besoin constant de modernisation et d'adoption de normes internationales sont présentés comme des éléments clés pour maximiser les gains tirés de l'insertion dans les chaînes de valeur mondiales du secteur automobile.

Suggested Citation

  • Justin Barnes & Mike Morris, 2008. "Staying alive in the global automotive industry: what can developing economies learn from South Africa about linking into global automotive value chains?," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(1), pages 31-55.
  • Handle: RePEc:taf:eurjdr:v:20:y:2008:i:1:p:31-55
    DOI: 10.1080/09578810701853157

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    Cited by:

    1. Grodzicki, Maciej J. & Skrzypek, Jurand, 2020. "Cost-competitiveness and structural change in value chains – vertically-integrated analysis of the European automotive sector," Structural Change and Economic Dynamics, Elsevier, vol. 55(C), pages 276-287.
    2. Moran, Theodore H. & Görg, Holger & Seric, Adnan & Krieger-Boden, Christiane, 2017. "How to Attract Quality FDI?," KCG Policy Papers 2, Kiel Centre for Globalization (KCG).
    3. Ülengin, Füsun & Önsel, Şule & Aktas, Emel & Kabak, Özgür & Özaydın, Özay, 2014. "A decision support methodology to enhance the competitiveness of the Turkish automotive industry," European Journal of Operational Research, Elsevier, vol. 234(3), pages 789-801.
    4. Narula, Rajneesh & Nguyen, Quyen T.K., 2011. "Emerging country MNEs and the role of home countries: separating fact from irrational expectations," MERIT Working Papers 2011-021, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. Moran, Theodore H. & Görg, Holger & Seric, Adnan, 2016. "Quality FDI and Supply-Chains in Manufacturing: Overcoming Obstacles and Supporting Development," KCG Policy Papers 1, Kiel Centre for Globalization (KCG).
    6. Andreoni, Antonio & Tregenna, Fiona, 2020. "Escaping the middle-income technology trap: A comparative analysis of industrial policies in China, Brazil and South Africa," Structural Change and Economic Dynamics, Elsevier, vol. 54(C), pages 324-340.
    7. Chen, Lujie & Olhager, Jan & Tang, Ou, 2014. "Manufacturing facility location and sustainability: A literature review and research agenda," International Journal of Production Economics, Elsevier, vol. 149(C), pages 154-163.
    8. Rajneesh Narula & John Dunning, 2010. "Multinational Enterprises, Development and Globalization: Some Clarifications and a Research Agenda," Oxford Development Studies, Taylor & Francis Journals, vol. 38(3), pages 263-287.
    9. Narula, Rajneesh, 2010. "Much ado about nothing, or sirens of a brave new world?: MNE activity from developing countries and its significance for development," MERIT Working Papers 2010-021, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    10. Jakob Engel & Deborah Winkler & Thomas Farole, 2016. "SACU in Global Value Chains," World Bank Other Operational Studies 23789, The World Bank.
    11. Giorgia Giovannetti & Marco Sanfilippo, 2009. "Do Chinese Exports Crowd-out African Goods? An Econometric Analysis by Country and Sector," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 21(4), pages 506-530, September.


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