1st Edition

Automotive Global Value Chain
The Rise of Mega Suppliers

ISBN 9780367374723
Published September 25, 2019 by Routledge
294 Pages 32 B/W Illustrations

USD $52.95

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Book Description

Today, some suppliers have grown increasingly powerful and in certain cases, earn revenues that rival or even exceed that of their automaker clients. In the pre-globalisation period, automakers wielded absolute power over their significantly smaller suppliers. This book reveals the upending of this relationship, with the gradual shift in the balance of power from automakers to their suppliers in this era of globalisation.

The book examines how suppliers in the global tyres, seats, constant velocity joints (hereafter 'CVJs'), braking systems and automotive semiconductor industries have evolved into powerful oligopolies through a mix of acquisition and organic growth strategies. It also highlights how joint ventures could be strategically deployed as springboards to acquisition, as they enable firms to familiarise themselves with their partners’ markets and operations. Moreover, the book analyses the disruption stirred by the entry of well-resourced technology titans into this industry and their inevitable clash with the traditional incumbents.

This book is an invaluable reference for anyone interested in learning more about the automakers’ and now their suppliers’ relentless quest to create market-dominating intelligent driving systems.

Table of Contents

1. Introduction

2. The Global Automobile Industry

3. The Global Tyres Sector

4. The Global Automotive Seats Industry

5. The Global CVJs Industry

6. The Global Braking Systems Industry

7. The Global Automotive Semiconductor Business

8. Comparative Analysis of the five components subsectors

9. Conclusion and Further Research

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Wilson Kia Onn Wong completed his PhD at the Centre of Development Studies, University of Cambridge, under the supervision of Professor Peter Nolan, who holds the Chong Hua Chair in Chinese Development. His PhD research focused on the factors driving the formation of oligopolies in the global automotive components industry, specifically in the tyres, car seats, constant velocity joints, braking systems and automotive semiconductor subsectors. Moreover, his research interests span both quantitative and qualitative studies, with particular emphasis on the empirical analysis of the impact of corporate takeovers on acquirers’ stock returns and the economic history of the rise of key automotive manufacturers and their suppliers over the last five decades.


'This book offers a unique perspective into the shifting power balance of the automotive industry, driven by the rising oligopolistic might of suppliers who are now assuming control over the development of increasingly sophisticated high-tech components. Their growing concentration secured through ruthless consolidation, is spurred by an insatiable need for size, market share and technological breakthroughs. Despite their exalted status within the automotive value chain, many suppliers have little brand recognition with the general public. The writer may be the first to meticulously analyse the arrival and stunning rise of this new business model.'Joergen Oerstroem Moeller, Former State-Secretary, Royal Danish Foreign Ministry and Adjunct Professor at Singapore Management University & Copenhagen Business School

'This lively account of recent industrial change in the greatest industry of the 20th century - automobiles - is a vivid reminder of how unrelenting are the battles to sustain global industry leadership in its second century. No single strategy - enhanced R&D, aggressive acquisitions, canny joint ventures, or developing market penetration - is enough to succeed and, as Wilson Wong describes, market power can subtly shift from demanding client to persistent supplier over the course of less than a decade. We may be surprised that such a mature industry can continue to fascinate us by its constant change and evolution, but it is an important lesson to remember, when we read of another start up with a new, disruptive technological breakthrough, that there are no "free lunches" and "easy wins" in global business.' — The Hon. Matthew Bullock, Master of St Edmund's College, University of Cambridge