1st ICAI 2020

International Conference on Automotive Industry 2020

Mladá Boleslav, Czech Republic

vertical disintegration, which leads to strong backward linkages between lead firms (assemblers) and hundreds of their component suppliers (Humphrey and Memedovic, 2003). Since the 1990s, the automotive sector witnessed a rise of less developed countries, including post-communist Central and Eastern European states (Sturgeon et al., 2008). This was the outcome of the combination of three main factors: company strategies, characteristics of the countries, and public policies (Humphrey et al., 2000). CEE region integrated into automotive GVCs due to comparative advantage in assembly and labor-intensive manufacture of components (Humphrey et al., 2000). Currently, automotive is the major industry in the Visegrad region, and the Group now produces almost 20% of European passenger cars. Although many studies are using new datasets on value added, only a few of them focus on the automotive industry. Following the introduction of OECD-WTO TiVA in 2013, De Backer and Miroudot (2013) published a Working Paper entitled Mapping global value chains. Apart from explaining these new data and indicators, they also explain it in several industries, including the automotive industry. Here, they confirm several statements, such as the importance of intra-regional sourcing within the three main regional blocks (EU, NAFTA, East Asia). They illustrate the importance of vertical linkages between the motor vehicles industry and other industries and also provide evidence that the participation of countries in motor vehicles’ GVCs seems to be strongly driven by the importance of imported intermediates, especially in the CEE region. In a paper by Timmer et al. (2013), some examples of the automotive sector are given based on WIOD data, though the article is rather general. However, the other paper by these authors entitled An Illustrated User Guide to the World Input–Output Database: the Case of Global Automotive Production is focused solely on the automotive industry. Here, among others, they found that domestic value added in German cars decreased rapidly from 79% to 66% between 1995 and 2008, whereas the value added from Eastern Europe increased. This was largely because firms from Germany relocated parts of the production process to these countries. The decline in domestic value added reflected declining contributions from less-skilled domestic labor, whereas the value added by domestic capital and high-skilled workers declined only slightly. However, the change in the factorial distribution of foreign value added did not mirror these domestic changes. According to the authors, this was likely related to lower foreign wages as well as automation. They also record a decline in domestic value added in cars in the majority of developed car-producing countries. Further, they show that the share of global value added is rising more rapidly than regional (EU, NAFTA), although in the EU regional value-added shares were still higher than global shares in 2008. China´s share in global automotive production value has been increasing rapidly, reaching 15% in 2011 (from 3% in 1995). Globally, the income shares for low- and medium-skilled workers dropped by four and five percentage points, whereas income shares for high- skilled workers increased by three percentage points and for capital by six percentage points over the 1995–2009 period supporting the routinization hypothesis. Other papers, based on WIOD and TiVA include Baldwin and Lopez‐Gonzalez (2014). Here an example of value added trade with cars between the US and Mexico is mentioned. OECD-WTO TiVA data have been used by Vlčková (2017). The main

271