1st ICAI 2020

International Conference on Automotive Industry 2020

Mladá Boleslav, Czech Republic

focus has been given to the automotive value chains in Visegrad countries. The key findings include the fact that between 1995 and 2011, the domestic value added in the automotive has remained relatively stable in Visegrad countries, though, in the whole manufacturing sector, it has declined. The foreign value added in exports originated mainly in Germany, although the Visegrad countries are also linked to each other in automotive GVCs. Germany and other Visegrad countries are much less important as final markets for automotive exports based on value added data with more important final destinations being China, the United Kingdom, Russia, or the United States. Another paper by Vlčková (2019) describes the automotive sector between 2005-2015. Surprisingly, there was no increase in value added from the electronics industry in motor vehicles. Further, the importance of services was declining, likely affected by the increasing digitization, by offshoring of services and by greater modularization and standardization in the sector. Despite a long-term decline, OECD countries have a dominant position in the automotive sector, especially in terms of value added. The drop is related not only to changes in the distribution of production, but it also points to gradual upgrading in developing countries. In the Czech Republic, the share of domestic value added in exports of motor vehicles has been declining and now stands at 46%. Based on WIOD analysis of Slovakian automotive sector (Ďurčová and Bartóková, 2019) the automobile production does not generate a high value added per unit of output, despite having significant importance for Slovak production. From the demand and supply linkages, none of the monitored export sectors, including the automotive, is vital for the Slovak economy. 4. Conclusion and Policy implications New datasets based on input-output tables have enabled a more detailed analysis of trade and distribution of value added. Despite some of their inadequacies, they provide us with new data not just on the extent of integration into GVCs among countries and industries, but also the share of domestic/foreign value added in their exports. It also helps us to better asses the benefits as well as risks associated with participation in GVCs. These datasets have also been used to map the automotive industry. The key findings from these studies confirm the increasing role of emerging markets not just as producers but also as consumers. Although relocation of production to emerging countries was initially motivated by lower labor costs, emerging countries have been able to increase their share in value added in the automotive industry. However, this is mostly related to China and its unique position (big market, high tariffs, joint venture conditionality for car production). The data also provide evidence of the existence of three major regional blocs in automotive production (EU, NAFTA, East Asia). With the introduction of new datasets, politicians pay more attention to it. The positive as well adverse effects of participation in GVCs are mostly dependent on the nature of the local economies – their knowledge and skill base, the composition of the local labor supply, and overall institutional framework (Dicken, 2015).This affects the embeddedness of TNC’s in local economies, which is crucial for increasing competitiveness and upgrading. Datasets, therefore, do have significant policy implications.

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