— Automotive in Transition Challenges for Strategy and Policy Edited by Andrea Stocchetti, Giulia Trombini, Francesco Zirpoli
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Automotive Strategy and Organization 1 — Automotive in transition Challenges for strategy and policy edited by Andrea Stocchetti, Giulia Trombini, Francesco Zirpoli Edizioni Ca’Foscari Automotive Strategy and Organization 1 Automotive in transition Challenges for strategy and policy edited by Andrea Stocchetti, Giulia Trombini, Francesco Zirpoli © 2013 Edizioni Ca’ Foscari - Digital Publishing Università Ca’ Foscari Venezia Dorsoduro 1686 30123 Venezia edizionicafoscari.unive.it isbn 978-88-97735-37-3 Research funded by the Italian Ministry of Research under the 2008 Program of Scientific Research of Relevant National Interest (03/22/2010 - 22/09/2012), prot. 20089b3ccw_002. The authors are responsible for the contents and opinions expressed within their own chapters. 7 Introduction Vincenzo Zezza Part 1 Perspectives on firms’ strategy and organization in the global automotive industry 19 Innovation processes in the car industry: New challenges for management and research Giulia Trombini and Francesco Zirpoli 37 Are carmakers ready for the «peak car»? Andrea Stocchetti 57 The impact of electric motorizations on cars’ architecture and supply chain relationships within the automotive industry Anna Cabigiosu 77 Towards a new business model for automotive distribution Leonardo Buzzavo 99 New ventures in old industries: disrupting or embedding? Vladi Finotto Part 2 Perspectives on industrial policy and local development 119 The evolving features of the automotive industry Francesco Garibaldo 139 Industrial policies for sustainable mobility in the leading european automotive countries Giuseppe Calabrese 161 Crisis in the automotive industry and territorial development: Fiat and its suppliers in Southern Italy Francesco Pirone 179 Local industrial policy for the automotive industry in Italy: Innovation, export support and the crisis of the Fiat Group Davide Bubbico 197 The crisis and the survival of the Italian automotive suppliers Aldo Enrietti and Giuseppe Calabrese Introduction Vincenzo Zezza Italian Ministry of Economic Development dg for Industrial Policy and Competitiveness This work comes from the worthwhile initiative from Andrea Stoc- chetti and Francesco Zirpoli, that, willing to commemorate the mas- tership of Bepi Volpato, in the autumn of 2012 collected, in the won- derful background of the Ca’ Foscari University in Venice, a pool of scholars and researchers, all devoted since several years to the automotive industry analysis, under different perspectives. This panel, that probably considered it also a moral obligation due to the same Volpato lesson, kindly invited myself, as a practitioner in the area of industrial policy for the automotive sector, in order to try to stimulate their discussion. I kept very proudly since the first moment the chance to collect a lot of insights and new ideas for my work, and moreover a lot of reflections, questions and answers came to me from the reading of all the chapters of this book. The main questions that arose since the first meeting were all around the sometimes clear, sometimes less clear, consciousness that we are affording a phase that is surely of crisis for the automotive sector, but, as always in the case of a «transitional» phase, a phase of great oppor- tunities. All the doubts were posing indeed questions like: - Are we experiencing the automotive sunset, both like a reference product and a reference industry, for an advanced economy? And, if the answer would be positive, how to explain the rapid growth of the product and the industry in the fast growing economies like China, India, Russia, Turkey, etc.? - How is the «mobility model» evolving, with reference for example to «individual, or personal, vehicles», and new public transport modes (i.e. car sharing, company cars, etc.), and which is the role of tradi- 7 automotive in transition tional drivers for the sector like the «driving pleasure», the «freedom feeling» or the «social status» represented by luxury cars? - Are those technologies like for instance electrification (on the prod- uct side), or process flexibility by automation (on the manufacturing side), or ict and «virtualization» (on the design side), representing an «evolution» or a «revolution» path? And if the answer goes for the latter, why are they exploiting right now, ten or twenty years later their first appearing? - How are the manufacturing technologies, or those applied to the new product development process (npd), impacting on work organization inside the car maker (oem), between it and its suppliers, or even in the framework of the global capital markets? Only to summarize the most of them… A fter having read the different papers it comes to me the reflection that the automotive crisis in the years 2008-2009, that took place at the global level but specially for the countries were a stronger and long- standing tradition in the car making was in place (Europe, usa, Japan) went overlapping afterwards, in those three economies, on three very different phenomena, roughly: - a general rethinking of the development path in the usa, where the Obama administration gave a clear steer toward manufacturing, from the previous «mantra» of dematerialization and development of the service sector (a refocusing that in Europe has decisively been adopt- ed also from the uk); - a «systemic» crisis in Japan, strongly related to the China growth, and seriously impacted by the terrific tsunami of 2011; - the up to now useless effort of Europe to harmonise its very different economies in terms of models and performances. As one can deduce from the fact that those considerations are at the same time suitable for the automotive sector as well as for the economy as a whole, two main conclusions can at least be sketched out: - the first one is that the automotive production and market still repre- sent, on the global scenario, one of the most important, if not «the» most important, indicator of the «real economy» trend; - the second is that the combined effect of globalization and technology innovation has since a four to five years reached the top of the «in- dustrial production pyramid», i.e. the car, that is indeed the industrial 8 vincenzo zezza automotive in transition production iconic product, so bringing us in a phase of radical changes as well as in terms of consumption attitudes (the sustainable mobility), technologies (electrification, fuel cells, natural gas, etc.), industry global structure (new Asian or South America entrants, merger and acquisitions, etc.). Therefore it seems as the present situation shows a series of analogies with that of a century ago, when the car was barely appearing on the world scene. This make very complex and tricky the task for the policy maker, that, as a good theory and practice, should avoid to intervene in those situations characterized by high «uncertainty» (lack of data, or conflicting information) and «ambiguity» (signals with multiple and different interpretations). On the other side it is true as well that in those situation it is especially needed from the business sector any kind of address or orientation from the policy side, in order to settle out a more clear development path and to ignite with a stronger emphasis a growth dynamic. Therefore it is worthwhile to mention that in those situation the typi- cal policy measure that is largely spreading, and universally accepted, is that of establishing some form of public-private «fora» from time to time called «industrial (or technology) platforms», «public-private- partnership», «joint technology initiatives», «high-level-groups» and so on (like those for instance launched by the European Commission), or «Councils», or even «Circles» (e.g. the Automotive Council in the uk), where to let «germinate» from the discussion between all the stakehold- ers, adequately guided and coordinated, those needed indications. Looking at the Italian case, the above mentioned considerations take an even more net shape (as well outlined by Enrietti and Calabrese): a car market that steadily grew at a good pace for almost forty years, even if with some episodic falls, from time to time sustained by mean of public subsidies,1 that induced a mobility model dominated by individual pri- vate cars (Italy has one of the highest motorization rate in the world, as well as one of the oldest fleet in Europe and one of the smallest company cars fleet in Europe), but also a car market that felt by 48% in the last five years period (but without a sensible effect on the motorization rate!), igniting a production fall of 56% in the same period, also because the 1. A brief reference can be found in the chapter elaborated by Bubbico, with the sole omission of the last one, the scrapping incentives scheme launched in the years 2009-2010, coordinated with those launched almost all over Europe, and that summed up to almost one billion euro of Italian taxpayer money. introduction 9 automotive in transition same production substantially rely on one single car maker (sole case in Europe), but by apparent paradox maintaining almost unaffected the parts and components industry, that diverted up to 50% of its produc- tion to export. Even if, as the work of Enrietti and Calabrese shows, a concentrating trend between the suppliers arose. The valuable papers of this book can then help in understanding how and why Italy seems to represent, once more, an effective living labora- tory, for testing, verifying and validate some trend that are actually in place on the global scale. For those reasons, the considerations and problems elicited from the present work can became a valid reference for someone with the aim to support the policy making process, specially in the view of the forthcom- ing «Italian Automotive Council», that has already been announced and should be putted in place in the next months. One should indeed reflect on the impact over the Italian automo- tive industry (oems and suppliers), its business processes, and its new product development processes, as described by Trombini and Zirpoli, coming from the trend in product platform standardization (e.g.