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The goal of this chapter is to summarize the development of the automotive industry in less developed countries. It first briefly reviews its historical development before 1990. It then focuses on its rapid growth after 1990. The chapter argues that despite the traditionally strong role of governments in the development of the automotive industry in less developed countries, its growth since 1990 has been mostly driven by the investment strategies of large core-based assembly firms in their attempts to access new markets and/or lower production costs through export-oriented production in less developed countries. The chapter identifies three basic modes of growth of the automotive industry in less developed countries since 1990. First are autonomous protected peripheries, which are represented by countries such as China, India, Russia and Iran. The state has continued to protect the domestic markets in these countries to support the growth of the autonomous domestic automotive industry, while allowing direct investment by foreign automakers and component suppliers. The growth of the automotive industry in autonomous protected peripheries has been driven by large or potentially large domestic demand. Second are integrated peripheries, which have become integrated in core-based macroregional production networks, such as in the cases of Mexico, Eastern Europe, and parts of North Africa, through large direct investment by foreign automakers and component suppliers from core regions. Integrated peripheries are typified by significantly lower production costs compared to core regions and specialize in the export-oriented production of smaller cars or special models for affluent markets in developed countries. Third are macroregional peripheries, which are composed of less developed countries participating in regional trade agreements. Examples include ASEAN in Southeast Asia and MERCOSUR in South America. The growth of the automotive industry has been based on large inflows of foreign direct investment and has been driven by a large new demand for cars.

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The Development of the Automotive Industry in Less Developed Countries

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  • 发表日期：

    2026年

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  • Petr Pavlínek

摘要

The goal of this chapter is to summarize the development of the automotive industry in less developed countries. It first briefly reviews its historical development before 1990. It then focuses on its rapid growth after 1990. The chapter argues that despite the traditionally strong role of governments in the development of the automotive industry in less developed countries, its growth since 1990 has been mostly driven by the investment strategies of large core-based assembly firms in their attempts to access new markets and/or lower production costs through export-oriented production in less developed countries. The chapter identifies three basic modes of growth of the automotive industry in less developed countries since 1990. First are autonomous protected peripheries, which are represented by countries such as China, India, Russia and Iran. The state has continued to protect the domestic markets in these countries to support the growth of the autonomous domestic automotive industry, while allowing direct investment by foreign automakers and component suppliers. The growth of the automotive industry in autonomous protected peripheries has been driven by large or potentially large domestic demand. Second are integrated peripheries, which have become integrated in core-based macroregional production networks, such as in the cases of Mexico, Eastern Europe, and parts of North Africa, through large direct investment by foreign automakers and component suppliers from core regions. Integrated peripheries are typified by significantly lower production costs compared to core regions and specialize in the export-oriented production of smaller cars or special models for affluent markets in developed countries. Third are macroregional peripheries, which are composed of less developed countries participating in regional trade agreements. Examples include ASEAN in Southeast Asia and MERCOSUR in South America. The growth of the automotive industry has been based on large inflows of foreign direct investment and has been driven by a large new demand for cars.