The principal objective of this chapter is to enhance our understanding of patterns of strategic partnerships in the automobile manufacturing industry from economic, organizational, and strategic management perspectives. This chapter describes the strategic links of automobile manufacturers by providing insight into their international partnerships and critical issues they experience during such endeavors. This chapter highlights the advantages of global alliances between automobile manufacturers as well as non-manufacturers by describing the present trends and dynamics of interfirm cooperation and by analyzing the motives and processes of such ventures. To fully understand interfirm partnerships in automobile manufacturing, we must first grasp the industry’s dynamics and then describe the alliance patterns and processes.
The global market represents about 44 million vehicles per year in sales. 1 This number is expected to grow to about 64 million by 2002. The biggest growth is expected in China, India, the Pacific Rim, South Africa, and South America. The global market in the automotive industry is well more than $1 trillion and involves more than 10 million employees, meaning that it is the world’s largest manufacturing business. 2 The major producing countries are the United States with 23 percent, Japan with 20 percent, and Germany with 10 percent. The largest single market is the United States with annual sales of about 15 million units.