Value chains, networks and clusters: reframing the global automotive industry

In this article, we apply global value chain (GVC) analysisto recent trends in the global automotive industry, with specialattention paid to the case of North America. We use the threemain elements of the GVC framework—firm-level chain governance,power and institutions—to highlight some of the definingcharacteristics of this important industry. First, nationalpolitical institutions create pressure for local content, whichdrives production close to end markets, where it tends to beorganized nationally or regionally. Second, in terms of GVCgovernance, rising product complexity combined with low codifiabilityand a paucity of industry-level standards has driven buyer–supplierlinkages toward the relational form, a governance mode thatis more compatible with Japanese than American supplier relations.The outsourcing boom of the 1990s exacerbated this situation.As work shifted to the supply base, lead firms and supplierswere forced to develop relational linkages to support the exchangeof complex uncodified information and tacit knowledge. Finally,the small number of hugely powerful lead firms that drive theautomotive industry helps to explain why it has been so difficultto develop and set the industry-level standards that could underpina more loosely articulated spatial architecture. This case studyunderlines the need for an open, scalable approach to the studyof global industries.