Automobile - International Trade

The globalization of the automobile industry has obliged car manufacturers to adopt new positions and re-think their strategy. The stakes are all the more important as world production overcapacity is estimated at 20 million vehicles, with production at 66 million.

In the developed countries, car manufacturers in a position of oligopoly, especially American, Japanese and German ones, are confronted with market saturation and have to meet stricter and stricter environmental and safety standards. They have embarked on a technological race in order to preserve their market share and their margins. The main lines concern research on materials, the efficiency of means of propulsion, weight reduction, the protection of the environment. The rise of world energy prices forces them, from now on, to devote their efforts to research on more economical vehicles but ones that are also based on new technologies concerning types of engines: hybrid engines, bio fuel engines, electric batteries.

In the emerging countries, especially China or India, many car manufacturers have moved into the low cost car segment to fulfil the expectations of their populations. The environmental aspect is often neglected, the short term aim being to satisfy the needs of a middle class which wants to access the comfort of a car as quickly as possible.

Cutbacks in production costs are inevitable, as new investment concentrates more on Asia, Central Europe or Latin America. This process of concentration will continue: between car manufacturers in emerging countries and between car manufacturers and car parts manufacturers in developed countries.