A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Jürgens, Ulrich Working Paper Characteristics of the European automotive system: Is there a distinctive European approach? WZB Discussion Paper, No. SP III 2003-301 Provided in Cooperation with: WZB Berlin Social Science Center Suggested Citation: Jürgens, Ulrich (2003) : Characteristics of the European automotive system: Is there a distinctive European approach?, WZB Discussion Paper, No. SP III 2003-301, Wissenschaftszentrum Berlin für Sozialforschung (WZB), Berlin This Version is available at: http://hdl.handle.net/10419/49646 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. 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SP III 2003-301 [email protected] ZITIERWEISE/CITATION: Ulrich Jürgens Characteristics of the European Automotive System: Is There a Distinctive European Approach? Discussion Paper SP III 2003-301 Wissenschaftszentrum Berlin für Sozialforschung (2003) Forschungsschwerpunkt: Research Area: Organisationen und Organizations and Wissen Knowledge Arbeitsgruppe: Working Group: Wissen, Produktionssysteme Knowledge, Production Systems und Arbeit and Work Wissenschaftszentrum Berlin für Sozialforschung gGmbH (WZB) Reichpietschufer 50, D-10785 Berlin Telefon: +49 30 25491-272, Fax: +49 30 25491-255 www.wz-berlin.de/ow/wpa Abstract The paper discusses pro and cons concerning the hypothesis of a distinctive European approach regarding its automotive system. Its aim is to develop an international comparison of the structural changes in the international automo- tive industry. A special focus is laid on the ways of coordinating competencies and knowledge. What are the differences that set the European industry apart from its North American and Japanese competitors in this regard? The paper discusses EU market characteristics and particularities of the European de- mand structures, the history of specific European approaches in the area of production systems and new forms of work and the recent changes of supplier relations since the 1990s. The analysis shows that the approach taken in the course of the restructuring of the supplier industry in Europe led to the devel- opment of specific capabilities related to cross company and interorganisational cooperation in the 1990s which partially explains the successful development of the European auto industry in recent time. Zusammenfassung Das Paper diskutiert das Für und Wider der Hypothese eines besonderen euro- päischen Entwicklungsweges in der Automobilindustrie. Ziel ist, die gegenwärti- gen Umstrukturierungen dieser Industrien mit einer international vergleichenden Perspektive zu erfassen. Im Zentrum steht die Frage nach der Koordination von Kompetenzen und Wissen: Welche Unterschiede lassen sich hier im Vergleich der europäischen Industrie mit der in Nordamerika und Japan feststellen? Die Untersuchung zeigt, dass insbesondere hinsichtlich der Reorganisation der Zu- lieferbeziehungen ein besonderer europäischer Ansatz entwickelt wurde, der zur Herausbildung spezifischer Formen der unternehmensübergreifenden und interorganisationalen Kooperation geführt hat. Die damit verbundenen Lernpro- zesse haben zu spezifisch europäischen Konzepten und Kompetenzen geführt, die wesentlich zu der relativ erfolgreichen Entwicklung des Automobilsektors in Europa in den vergangenen Jahren beigetragen haben. Contents 1. Introduction ......................................................................................... 1 2. European Level Automobile Policy ..................................................... 3 3. Market Characteristics ........................................................................ 11 4. The Quest for an Alternative “European” Production System ............. 14 5. Europe’s Supplier Structure and the Direction of Its Restructuring ..... 19 5.1 Strategies towards Modularisation ...................................................... 19 5.2 The Trend towards Specialisation........................................................ 21 5.3 Niches and Specialists Related to the Sports Car/Racing Tradition .... 22 6. Challenges for Cross-company and Inter-organisational Cooperation 24 6.1 Cooperation at the Point of Assembly ................................................. 24 6.2 Cooperation at the Point of Product Development .............................. 27 6.3 Cooperation at the Interface between the OEMs and the Small and Medium enterprises (SME) ................................................................. 29 7. Conclusions ........................................................................................ 32 8. References ......................................................................................... 33 1. Introduction* The European Car Industry has had a strong start into the new century. After three problem-ridden previous decades, this is somewhat surprising. Only ten years ago, the Japanese auto industry seemed invincible, the 1980s saw the French and Italian car industries on their knees, and in the 1990s the German car companies scrambled to regain competitiveness. By the year 2000, the Europeans seem to have re-invented themselves. They were the ones to open the new round of mergers & acquisitions. As a result, the US car industry is no longer the Big Three after the takeover of Chrysler by Daimler, and two of the Japanese Big Five now belong to alliances dominated by European car compa- nies. Admittedly, it is not all roses within the European car industry. This is for instance indicated by the increasing difficulties of Fiat. In addition, the European resurgence may be owed to protectionist factors (such as the 10% tariff on cars imported to the EU versus 2.5% for passenger cars and 25% (!) for light trucks in the case of the USA and 0% in Japan1). However, some of the credit can be ascribed to good decision-making of European management and to differences in the approach the Europeans have taken vis-à-vis the restructuring of the automotive system. What might some of these differences be that set the Euro- pean industry apart from its North American and Japanese rivals? There certainly are characteristic features, which support the hypothesis of a European distinctiveness: – institutional conditions, industry policies of the EU and its member states, industrial relation systems, tax policies, environmental regulations; – the customer structure in terms of social characteristics, income, tastes re- flecting for instance geographical particularities, structures of urbanisation; – the industry structure in terms of OEM supplier, small and big company configurations. On the other hand, a number of factors speak against the hypothesis of Euro- pean distinctiveness: * This paper is based on research carried out at the Social Science Research Cen- ter Berlin (WZB) in the context of a research programme on Coordinating Compe- tencies and Knowledge in the European Automobile System (CoCKEAS) between 2000 and 2002. The CoCKEAS Programme was part of the work activities of the international network of automotive industry researchers, GERPISA, and it was fi- nanced by the European Union in its framework 5 programme (cf. Lung 2001). I am very grateful for all comments made in the context of the CoCKEAS and GERPISA activities. I would like to thank in particular Paul Bailey, Bruce Bel- zowski, Michel Freyssenet, Yannick Lung, Glenn Mercer, Anne Posthuma, Mari Sako, Mario Salerno, Takahiro Fujimoto and Koichi Shimokawa for their thoughtful and productive comments on the previous versions of the paper. I would also like to thank Peter Jansen for his help in compiling this report. As usual, any errors and lacks of clarity remain the responsibility of the author. The paper will also be published in forthcoming issues of the Actes du GERPISA, and, in a shortened version, in the International Journal of Automotive Technology and Management. 1 Cf. Jama (2001: 24). - 1 - – For a long time now, American companies have had a strong presence in Europe. The Japanese automakers have followed, and since recently stepped up pace to increase production inside Europe.2 Thus, today around 1/3 of the European automotive activities are being governed from outside. At least for the American manufacturers, however, it is also true that they have been part of the European automotive system for such a long time that their factories