Auto manufacturing goes global
Country of origin no longer indicates where cars are built
Twenty years ago, car buyers knew that when they purchased a Toyota it was a Japanese car. Volkswagen was German, a Jaguar was English and a Fiat was Italian. Some people bought only Swedish or only American vehicles, adamant that only (insert country here) produced vehicles worthy of their standards of performance, style or reliability.
Those days are over. Welcome to the global automotive world. While today’s trendiest cars still bear names that conjure images of their countries of origin, there is a pretty good a chance that they were built in Kentucky, Mexico or Poland.
Take the Fiat 500’s reintroduction in 2007, more than 30 years after the original stopped production. Unlike its earlier Italian-made iteration, the new 500 is produced in Brazil, Argentina and Poland
Diversification of resources protects the supply chain from assembly slowdown or collapse.
and additional work on the car is done in France, Turkey, Serbia, China and, of course, Italy.
Another comeback kid, the Volkswagen Beetle, was at one point in history a German automotive pop culture icon. A Beetle engine even sounded German. But it is not just Fahrvergnugen anymore.
It’s also La Alegria de Conducir (Mexico) or O Prazer de Dirigir (Brazil). Other countries where Beetles are born, in whole or in part, include Ireland, Indonesia, South Africa, Nigeria and Australia.
Even Japanese icon Toyota manufactures the gas-saving Prius in China, Thailand and other countries in Southeast Asia, and by 2015 Priuses will be assembled here in the good ol’ U.S. of A.
What is behind this major shift in the automotive world? According to Alec Gutierrez of Kelly Blue Book, a leading source for automotive information, the globalization of the car industry is a growing trend as companies open factories in markets around the world to cut down on shipping costs and minimize the risks associated with currency fluctuations. Manufacturers are also producing parts in multiple countries in an effort to hedge against natural disasters and other incidents that might have an impact on production. For these companies, diversification of resources protects the supply chain from assembly slowdown or collapse.
What is different about today’s automotive market is that companies have moved past the foreign-subsidiary model to build truly global vehicles. The world really is getting smaller, at least when it comes to making cars.