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The Automobile Industry in and Beyond the Crisis

Author

Listed:
  • David Haugh

    (OECD)

  • Annabelle Mourougane

    (OECD)

  • Olivier Chatal
Abstract
This paper considers the role of the automobile industry in the current cycle. It shows that the industry is economically important and its cycle is intertwined with business cycles. After casting some light on the sources of the collapse in car sales at the start of the crisis, the policy measures, in particular car scrapping programmes, put in place to support the automobile industry are discussed. The paper also derives short and medium term projections of car sales. While a rebound in car sales is likely in North America, Japan and the United Kingdom, car sales in Germany have been pushed significantly above trend and may weaken going forward. Over the medium term, in mature markets such as Europe and North America, trend sales are likely to remain stagnant. By contrast, rapid increases are foreseen in China and to a lesser extent in India. Medium-term projections suggest that capacity exceeds trend sales by around 20% in the five largest Western European markets considered as a whole. Without an adjustment in capacity, these countries would need to ensure an ongoing strong export performance. By contrast, automakers in the NAFTA area would need to halt their decline in domestic market share or to rely increasingly on exports in order to avoid excess capacity. In order to maintain their high levels of capacity utilisation, Korean and Japanese manufacturers will need to keep up their strong export performance. L'industrie automobile dans et après la crise Ce document examine le rôle de l’industrie automobile dans le cycle économique en cours. Il montre que l’industrie a une importance économique certaine et est interconnectée avec le cycle économique. Après avoir quelque peu détaillé l’origine de l’effondrement des ventes automobiles en début de crise, les mesures publiques mises en œuvre pour soutenir l’industrie automobile, et notamment celles concernant les dispositifs de prime à la casse sont détaillées. Ce document présente également des perspectives à court et moyen terme pour les ventes de voitures. Alors que l’on peut s’attendre à un rebond en Amérique du Nord, au Japon et au Royaume-Uni, les ventes d’automobiles en Allemagne sont nettement supérieures à la tendance, et pourraient de ce fait marquer un fléchissement à l’avenir. À moyen terme sur les marchés parvenus à maturité tels que l’Europe et l’Amérique du Nord, les ventes tendancielles devraient rester étales. À l’inverse, des hausses rapides sont attendues en Chine et dans une moindre mesure en Inde. Selon les projections à moyen terme, les capacités productives du bloc dépassent les ventes tendancielles de quelque 20 % sur l’ensemble des cinq plus grands marchés d’Europe occidentale. À défaut d’ajustement des capacités, il faudrait que ces pays affichent de solides performances continues à l’exportation. À l’opposé, pour éviter les surcapacités, les constructeurs de la zone ALENA devraient mettre un terme au recul qu’ils connaissent sur leur marché intérieur ou s’appuyer de plus en plus sur les exportations. Dans la mesure où les constructeurs coréens et japonais exportent une large part de leur production, leur destin est étroitement lié aux marchés mondiaux. Conserver des taux d’utilisation élevés en Corée et au Japon nécessitera que ces pays continuent de bénéficier de fortes performances à l’exportation.

Suggested Citation

  • David Haugh & Annabelle Mourougane & Olivier Chatal, 2010. "The Automobile Industry in and Beyond the Crisis," OECD Economics Department Working Papers 745, OECD Publishing.
    • Handle: RePEc:oec:ecoaaa:745-en
    DOI: 10.1787/5kmmp8wg6cmq-en
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    Citations

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    Cited by:

    1. Kher, Hemant V. & Kydd, Christine T. & O'Brien, Terrence M., 2017. "Evolution of product quality in European, Japanese and US automotive firms: An exploratory longitudinal analysis," Omega, Elsevier, vol. 73(C), pages 29-36.
    2. Filippo di Mauro & Joseph W. Gruber & Bernd Schnatz & Nico Zorell, 2011. "Where are global and U.S. trade heading in the aftermath of the trade collapse: issues and alternative scenarios," International Finance Discussion Papers 1017, Board of Governors of the Federal Reserve System (U.S.).
    3. Petr Maleček & Ota Melcher, 2016. "Cross-Border Effects of Car Scrapping Schemes: The Case of the German Car Scrapping Programme and its Effects on the Czech Economy," Prague Economic Papers, Prague University of Economics and Business, vol. 2016(5), pages 560-576.
    4. Efraim Benmelech & Ralf R. Meisenzahl & Rodney Ramcharan, 2017. "The Real Effects of Liquidity During the Financial Crisis: Evidence from Automobiles," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(1), pages 317-365.
    5. Agostino, M. & Nifo, A. & Ruberto, S. & Scalera, D. & Trivieri, F., 2022. "Productivity changes in the automotive industry of three European countries. An application of the Malmquist index decomposition analysis," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 216-226.
    6. Mark Hoekstra & Steven L. Puller & Jeremy West, 2017. "Cash for Corollas: When Stimulus Reduces Spending," American Economic Journal: Applied Economics, American Economic Association, vol. 9(3), pages 1-35, July.
    7. Jain, Prachi & Maitra, Debasish & Kang, Sang Hoon, 2023. "Oil price and the automobile industry: Dynamic connectedness and portfolio implications with downside risk," Energy Economics, Elsevier, vol. 119(C).
    8. Müller, Andrea & Heimeshoff, Ulrich, 2013. "Evaluating the Causal Effects of Cash-for-Clunkers Programs in Selected Countries: Success or Failure?," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79802, Verein für Socialpolitik / German Economic Association.
    9. Anderton, Robert & Tewolde, Tadios, 2011. "The global financial crisis: trying to understand the global trade downturn and recovery," Working Paper Series 1370, European Central Bank.
    10. Andoni Maiza & Ricardo Bustillo, 2018. "Analysis of the relevance of China’s development for main European automotive manufacturing countries," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 45(3), pages 403-424, September.
    11. Foley, Aoife & Tyther, Barry & Calnan, Patrick & Ó Gallachóir, Brian, 2013. "Impacts of Electric Vehicle charging under electricity market operations," Applied Energy, Elsevier, vol. 101(C), pages 93-102.
    12. Federico Bassi, 2020. "Chronic Excess Capacity and Unemployment Hysteresis in EU Countries. A Structural Approach," DISCE - Working Papers del Dipartimento di Economia e Finanza def091, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    13. Evanthia A. Nanaki, 2018. "Measuring the Impact of Economic Crisis to the Greek Vehicle Market," Sustainability, MDPI, vol. 10(2), pages 1-12, February.
    14. Panagiotis Stavropoulos & Alexios Papacharalampopoulos & Konstantinos Tzimanis & Demetris Petrides & George Chryssolouris, 2021. "On the Relationship between Circular and Innovation Approach to Economy," Sustainability, MDPI, vol. 13(21), pages 1-16, October.
    15. Jun, Seung-Pyo & Yoo, Hyoung Sun & Kim, Ji-Hui, 2016. "A study on the effects of the CAFE standard on consumers," Energy Policy, Elsevier, vol. 91(C), pages 148-160.
    16. Cody, John,, 2015. "How labor manages productivity advances and crisis response : a comparative study of automotive manufacturing in Germany and the US," ILO Working Papers 994871573402676, International Labour Organization.
    17. Jun, Seung-Pyo & Park, Do-Hyung & Yeom, Jaeho, 2014. "The possibility of using search traffic information to explore consumer product attitudes and forecast consumer preference," Technological Forecasting and Social Change, Elsevier, vol. 86(C), pages 237-253.
    18. Feld, Lars P. & Schmidt, Christoph M. & Schnabel, Isabel & Truger, Achim & Wieland, Volker, 2019. "Den Strukturwandel meistern. Jahresgutachten 2019/20 [Dealing with Structural Change. Annual Report 2019/20]," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201920, February.
    19. Chia-Nan Wang & Xuan-Tho Nguyen & Yen-Hui Wang, 2016. "Automobile Industry Strategic Alliance Partner Selection: The Application of a Hybrid DEA and Grey Theory Model," Sustainability, MDPI, vol. 8(2), pages 1-18, February.
    20. Shivakumar S. Malagihal, 2021. "Strategic Options for Automobile OEMs of Indian Origin to have Sustained Competitive Advantage: A Case of Tata Motors," International Journal of Global Business and Competitiveness, Springer, vol. 16(2), pages 139-152, December.
    21. Homolka, Lubor & Ngo, Vu Minh & Pavelková, Drahomíra & Le, Bach Tuan & Dehning, Bruce, 2020. "Short- and medium-term car registration forecasting based on selected macro and socio-economic indicators in European countries," Research in Transportation Economics, Elsevier, vol. 80(C).

    More about this item

    Keywords

    automobile crisis; car sales; car scrapping schemes; crise de l'automobile; prime à la casse; ventes de voitures;
    All these keywords.

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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