Research Department Working Paper n°44

The role of multinational company strategies in structuring global supply chains in the automotive industry

The article analyses the role of the internationalization strategies of global automobile manufacturers in the governance of global supply chains and their impacts on the economic and social upgrading of the countries concerned. Through the analysis of the 17 main world carmakers’ between 2000 and 2014, it characterize two opposed models of internationalization: the global-centralized model where the internationalization process is pushed by global platforms and standards conceived and controlled by centralized engineering; and the multi-domestic-decentralized model where the internationalization processes is pulled by the greater autonomy given to international subsidiaries in the design and production of low-cost vehicles for emerging markets. The article shows that the centralized global strategy remains today dominant in the automotive industry, but the successful deployment of the multi-domestic-decentralized strategy creates better opportunities for functional and social upgrading in emerging countries.