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Ten years of modularity: empirical evidences on the restructuring of the auto part industry (In French)

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  • Vincent FRIGANT

Abstract

This article reviews the carmaker-driven industrial restructurings that positioned First Tier Suppliers (henceforth FTS) at the heart of the world’s automobile system. It also draws necessarily temporary conclusions about their performance. The article is organised into three main sections. The first recaps the major transformations induced by modularity that affected inter-firm vertical relationships and highlights the challenges facing FTS. The second uses a ranking of the 30 leading automobile suppliers to analyse the instability of their global hierarchy. The final section focuses on three questions that became key for suppliers: profitability; R&D spending; and internationalisation. Most analysis involves a statistical study of a sample of 20 companies. The three sections converge to reveal a diversity of automobile supplier trajectories, in terms of both their intrinsic performance and the new kinds of operational modes they have operated within their vertical relationships.

Suggested Citation

  • Vincent FRIGANT, 2007. "Ten years of modularity: empirical evidences on the restructuring of the auto part industry (In French)," Cahiers du GREThA (2007-2019) 2007-15, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    • Handle: RePEc:grt:wpegrt:2007-15
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    File URL: http://cahiersdugretha.u-bordeaux.fr/2007/2007-15.pdf
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    1. Vincent FRIGANT (E3i, IFReDE-GRES), 2004. "The globalization of the automotive First Tier Suppliers: an empirical study (In French)," Cahiers du GRES (2002-2009) 2004-16, Groupement de Recherches Economiques et Sociales.
    2. Giuseppe Volpato, 2004. "The OEM-FTS relationship in automotive industry," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 4(2/3), pages 166-197.
    3. Vincent Frigant & Yannick Lung, 2002. "Geographical proximity and supplying relationships in modular production," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 26(4), pages 742-755, December.
    4. Gary Herrigel, 2004. "Emerging Strategies and Forms of Governance in High-Wage Component Manufacturing Regions," Industry and Innovation, Taylor & Francis Journals, vol. 11(1-2), pages 45-79.
    5. Vincent Frigant, 2007. "Between Internationalisation and Proximity: the internationalisation process of automotive first tier suppliers," Post-Print hal-00257463, HAL.
    6. Takahiro Fujimoto, 2001. "The Japanese automobile parts supplier system: the triplet of effective inter-firm routines," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 1(1), pages 1-34.
    7. Mario Sergio Salerno, 2001. "The characteristics and the role of modularity in the automotive business," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 1(1), pages 92-107.
    8. Vincent Frigant, 2004. "L'internationalisation marchande et productive des équipementiers automobiles : une évaluation empirique," Post-Print hal-00257472, HAL.
    9. François Fourcade & Christophe Midler, 2005. "The role of 1st tier suppliers in automobile product modularisation: the search for a coherent strategy," Post-Print hal-00262872, HAL.
    10. Vincent Frigant & Jean-Bernard Layan, 2009. "Géographie d'une industrie automobile modulaire : le cas des équipementiers français en Europe de l'Est," Revue d'économie régionale et urbaine, Armand Colin, vol. 0(4), pages 711-737.
    11. Joy Batchelor, 2006. "Modularisation and the changing nature of automotive design capabilities," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 6(3), pages 276-297.
    12. Asanuma, Banri, 1989. "Manufacturer-supplier relationships in Japan and the concept of relation-specific skill," Journal of the Japanese and International Economies, Elsevier, vol. 3(1), pages 1-30, March.
    13. Francois Fourcade & Christophe Midler, 2004. "Modularisation in the auto industry: can manufacturer's architectural strategies meet supplier's sustainable profit trajectories?," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 4(2/3), pages 240-260.
    14. Jorge Carrillo, 2004. "Transnational Strategies and Regional Development: The Case of GM and Delphi in Mexico," Industry and Innovation, Taylor & Francis Journals, vol. 11(1-2), pages 127-153.
    15. Fujimoto, Takahiro, 1999. "The Evolution of Manufacturing Systems at Toyota," OUP Catalogue, Oxford University Press, number 9780195123203.
    16. Jean-Jacques Chanaron, 2001. "Implementing technological and organisational innovations and management of core competencies: lessons from the automotive industry," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 1(1), pages 128-144.
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    More about this item

    Keywords

    Modular production; auto industry; First tier suppliers; industrial restructuring; profitability; internationalisation;
    All these keywords.

    JEL classification:

    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures

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    1. Studies on the automobile industry

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