Mutations of Automobile Industry in the European Union in the World Crisis Conditions

MUTATIONS OF AUTOMOBILE INDUSTRY IN THE EUROPEAN UNION IN THE WORLD CRISIS CONDITIONS PhD student Mircea Alexandru RĂDUŢEANU University of Craiova Email: [email protected] Abstract: Global technical harmonization is considered a driver of international competitiveness of the European automotive industry, with improving global competitiveness of European industry and creating automotive jobs in terms of environmental protection and road safety. The global economic crisis, the European Union had to take some measures to protect the automotive sector, using the investment in innovative technologies to facilitate consumer credit, and financial incentives for people who choose to sell old car and buy a new one. Referring to the importance of the issues examined in Europe today, automotive industry become very substantial, competition is fierce and the pace of change is emphasized. Thus, we have presented in this paper the general characteristics of the motor car industry in Europe and how it was influenced by the global crisis, and then to review the evolution of this sector in Romania and how they are feeling the crisis. Keywords: globalization, automakers, crisis. Introduction manufacturers be it European or Asian Globally, the European Union is the Americans. largest producer of motor vehicles, The global economic crisis has left producing over 18million vehicles per its mark on European Union car year and almost a third of the car. industry, so in recent years, industrial Germany is the largest European production fell and signs provide a producer, followed by France, Spain, continuation of this decline. Following Britain and Italy. These five countries, the severe global economic problems, old European Union states, the top five the auto sector crisis spread rapidly in in Europe confirms the importance of Europe. this sector in the economies of these states. European car industry In addition, the auto industry is European automotive industry closely linked to other economic sectors plays an important role regarding in Europe. Sectors such as electronics, European Union competitiveness in its mechanics, IT, metallurgy, chemistry, effort to achieve the major objective of and metals, plastics and rubber are the Lisbon Strategy: the European essential elements of this industry. 20% Union to become the most competitive of European production of steel and global economy. The mere fact that the aluminum 35% of the auto industry European Union more than 12 million goes. people work in the auto industry once Lately, Central and Eastern Europe again demonstrates the important role has become one of the favorite played in the European economy. destinations of major car producers and Sector is characterized by a very manufacturers of auto parts big role for research and innovation, 402 Management&Marketing, volume X, issue 2/2012 investing annually more than 20 billion These companies have significant euros, making it the largest private market presence in Europe, America investor in this sector. European and Japan, and made 80% of world automotive industry has a turnover of production of vehicles; 780 billion euro and value added of 140 9 modular manufacturers (Tier billion, contributing substantially to the 1). Companies located in this category GDP of the European Union. Also, the sell the product directly made exports over imports, resulting in a automobile manufacturer based on firm difference metered trade balance of $ contracts. In this category will get those 60 billion (European Commission 2011). companies that made systems such as Regarding the auto industry as a complete system or board seats or whole they present a number of electronic system. Of the companies features and characteristics (T.J. included in this category may mention Sturgeon, O. Memedovic, 2004) here: Continental AG, Robert Bosch wherever is reported in statistical terms: GmbH, Delphi Corporation, Johnson 9 is an industry characterized by Controls, Michelin Group, Lisa globalization - the global nature is Draxlmaier, Valeo, BOS Automotive, evidenced not only at the Valvetek, Johnson Controls, Sumitomo OEM. Suppliers of parts and Electric Industries Ltd, TRW subassemblies manufacturers followed Automotive, Leoni etc.; and became "global suppliers"; 9 individual component 9 is characterized by a structure manufacturers (Tier 2) (Coficab and firm focused in the idea that a relatively Contitech companies); small number of firms dominate the 9 suppliers of components and global market. Generally when we talk small assemblies (Tier 3). Companies in about the auto industry is talking about this category are small, usually with two types of companies: manufacturers local capital and are not focused of automobile and parts exclusively on the production of goods manufacturers. These two groups of for a particular sector, but achieve an companies have imposed a set of annual turnover of cars. These standards difficult to achieve by other companies often made of components companies. Alliances and/or mergers that go into the final product, different between firms take place in most cases items textile, metal, plastic or electrical within the industry; enter. Of the companies included in this 9 related industry is characterized category may mention here: by a close relationship created between SPUMOTIM, Nefer Prod, Interpart etc. different companies form a chain. Often A major role in the assembly and company producing automotive design of vehicles from the smallest of components manufacturer follows the the modular components, they have location on which it opens; systems and modules manufacturers, 9 is a changing industry, included and manufacturers of parts and the best materials, the improvement of components seeking to relocate near trying to bring in terms of design, safety, the assembly lines, to improve supply fuel efficiency, environmental protection chain and reduce inventories, thus and recycling of end of life vehicles. providing cost savings, increased In the automotive sector we find efficiency and even lower labor costs. several categories of companies: This model of economic 9 original parts manufacturers development may promote the (OEM): General Motors Corp., Ford emergence of clusters in the industry, Motor Co., DaimlerChrysler AG, Toyota as it can lead to development of strong Motor Corp.., Volkswagen AG, Honda partnerships. The main factors (J. Motor Co., Renault-Nissan, PSA etc. Management&Marketing, volume X, issue 2/2012 403 Goldsmith, 2008) behind the mobility of the assembly lines, to improve supply these companies are: chain and reduce inventory. This 9 a need for proximity in relation provides cost savings, increased to the automotive manufacturer efficiency and even lower labor costs. (OEM). In most cases the implantation Relocation of production facilities of a car manufacturer in a particular for motor vehicles or motor assemblies location attracts numerous location in to other areas is not an easy decision the area of automotive components and does not guarantee rapid gains for manufacturing companies, they create companies in the automotive industry. even more jobs than manufacturing The question that arises most often is company it self; that the process be moved? First, the 9 a competition to increase relocation decisions into account the productivity draws a series of efforts by activities that are based on labor. So the companies to face competition, which activities transferred to the new takes the form of the variety of production unit activity related to innovative processes even using an production of assemblies and sub- automatic system of production; assemblies, and the industrial 9 a cost and training human engineering. Also, for some companies resources are major factors underlying the transfer of activities related to back- the decision to locate, especially in office would bring substantial savings. cases where you have chosen the best These components transfer option for the company; activities aimed at targeting sectors 9 a superior technical preparation such as IT, accounting and began weighed increasingly more administration. Activities that are based location decision and to be growing on high competence, such as research demand by companies producing and product development are the last components for the automotive transferred to the new location. With the sector. In this respect often are sought company sells products in the new partnerships with local community and location is important for her to set its education (technical colleges and/or sales and after sales operations universities) that can provide various (service or maintenance). specialized programs: Six Sigma certification programs and the master Sector migration to Central and/or training point (for example, using and Eastern Europe CNC machines). In addition are Last period, especially after joining becoming increasingly popular research the European Union, Central and centers and research projects Eastern Europe has become one of the conducted at local and regional level; favorite destinations of major car 9 existence of an adequate producers and manufacturers of auto transport infrastructure to ensure a high parts manufacturers be it European or degree of mobility is an important Asian Americans. requirement for companies Before 1989, Hungary had its manufacturing components; territory or a factory to produce 9 locating a site for development cars. Poland was second in Warsaw and potential facilities can convince and Bielsko-Biala, Czechoslovakia

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