Reshoring:opportunities and limits for manufacturing in the UK - the case of the auto sector


In recent years, offshoring and outsourcing have transformed fundamentally nationally based auto sectors into global networks of design, production and distribution across the global value chains coordinated by the major automotive Original Equipment Manufacturers (OEMs). As manufacturing activities tended to be shifted to low-labour cost locations in Asia, Africa and Latin America, high-end design, R&D, product development have stayed anchored mostly to high-cost and high knowledge-intensive home economy locations (perhaps with the except of some design and styling activities which are often located in major end markets around the world. However, very recently the weaknesses of and risks inherent in such global value chains (GVCs) have been exposed, triggering attempts to rethink their nature and also raising possibilities to reshore some manufacturing activities to home countries. A combination of a more competitive exchange rate (despite the very recent appreciation of sterling), increased transport costs, rising wages in key areas of China, and a greater awareness of supply chain resilience have all contributed to a perceived change in some business fundamentals. The potential for some supply chain relocalisation also links in with the servitisation of manufacturing including the auto sector and shift to a hybrid model where manufacturing and services are increasingly intertwined. However, there are limits as to how far this can go and these raise some important questions and issues over the possible role for industrial policy.

Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > School of Social Sciences & Humanities > Aston Centre for Europe
College of Business and Social Sciences > Aston Business School
Additional Information: © Revue d’économie industrielle. Publication in open access after a two-year embargo period
Uncontrolled Keywords: automotive Industry,global value chains,manufacturing,onshoring,rebalancing,reshoring,Economics and Econometrics,Industrial relations
Publication ISSN: 1773-0198
Last Modified: 04 Mar 2024 08:13
Date Deposited: 02 Jun 2015 13:25
Full Text Link: http://rei.revu ...
Related URLs: http://www.scop ... tnerID=8YFLogxK (Scopus URL)
PURE Output Type: Article
Published Date: 2014-12-31
Authors: Bailey, David (ORCID Profile 0000-0002-1956-0556)
de Propris, Lisa



Version: Published Version

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