Relocation, standardization and vertical specialization: Core–periphery relations in the European automotive value chain

Abstract

The global automotive industry has been exposed to an overproduction crisis for several decades. Under the pressure of restructuring, automotive companies renew both the geographical scope and the technological standardization of their production processes. We analyze the effects this restructuring had on the development of European economies in order to understand whether vertical specializations in the automotive value chain can lead to Central and Eastern European countries' catching up to advanced economies, or whether such specializations reproduce new forms of coreperiphery relations. In order to answer this question, we introduce a new methodological approach to understand vertical specialization in the global value chain from a semi-peripheral perspective. We combine the theory of global value chains with Vernon's product life-cycle theory. In the research we focus on the standardization of the production of electric engines behind the geographical relocation of production between core and periphery.

Upgrading and the geography of the Hungarian automotive industry in the context of the fourth industrial revolution

“…The present analysis indicates a moderate upgrading mostly without strategic functions, defined by foreign subsidiaries, and an industry that is gradually and selectively adapting the innovations of the "Fourth Industrial Revolution". Like other studies (Gerőcs, T. and Pinkasz, A. 2019;Szalavetz, A. and Somosi, S. 2019;McKinsey & Company 2020), the present analysis obtained no proof of a spectacular shift in the productive role of Hungary and in the grounds of its growth in automotive industrial networks.…”

Upgrading in the Automotive Periphery: Turkey's Battery Electric Vehicle Maker Togg

“…major OEMs) have retained asymmetric power (Sturgeon and Van Biesebroeck, 2011; Yeung, 2018), a consequence of several industry‐specific dynamics. For example, OEMs tend to limit standardization of products and processes, which keeps their suppliers captive (Gerőcs and Pinkasz, 2019; Sturgeon et al., 2008). Beyond that, OEMs often require suppliers to co‐locate near final assembly operations to support priorities like just‐in‐time production (Sturgeon et al., 2008).…”

Europe in a changing world: opportunities and challenges

“…The cross-border automotive agglomeration described in the neighbouring regions of Czechia, Poland, Slovakia and Hungary after the turn of the millennium, can be interpreted as the cumulative result of these regional and local location choice logics (Grosz 2006, Pavlínek, Domanski andGuzik 2009). In the explanation of this industrial concentration -beside the above written arguments -the historical traditions (Hardi 2012), the multi-step investments of foreign automotive enterprises as well as the deepening intraregional division of labour (Molnár, Kozma and Pénzes 2015) and the generous state incentives (Pavlìnek 2016, Gerőcs andPinkasz 2019) played a role. The economic crisis of 2008/2011 had temporarily negative effect on the East-Central European automotive industry (Kiss 2012), but after thatdespite the partial relocation of the labour-intensive activities -the position of the region within the European automotive production networks has been further strengthened (Pavlínek et al 2017).…”