Source: adapted from P. Dicken (2003) Global Production Networks In Europe And East Asia: The Automobile Components Industries, GPN Working Paper 7, University of Manchester.
The Automobile Supply Chain
Vehicles such as trucks and automobiles involve supply chains that are complex, particularly in terms of their level of vertical integration (relations between assembly and the providers of components). A typical car requires 20,000 to 30,000 parts, each usually manufactured in a different facility and by different company groups. This production tends to take place in major clusters with the agglomeration of thousands of small companies supporting large assembly plants. Such clusters are present in the United States (Detroit/Windsor), Mexico, Germany, Japan, Korea and China. Because of all the relations and the multiplying effects it supports, automobile manufacturing is usually a sector that is sought after to develop manufacturing capabilities. It is also a highly competitive sector, implying that major automotive clusters could experience an extensive decline of their level of activity if they lose their competitiveness.