The Internationalization of Domestic U.S. Auto Production 910815

Product life cycle theory suggests that there are four major stages in the international movement of production, markets, technology, and capital: market and product dominance by one country; export dominance by that country as world markets develop; development of multiple world markets and production sites; and, finally, a loss of dominance by that one single producing country. Many would argue that the U.S. automotive industry in now in the fourth stage of the product life cycle. World economic development, combined with product and process technology transfer, has produced effective competitors to the once dominant U.S. producers. These competitors challenge the Big Three through exports and/or U.S. production. Japanese and European auto manufacturers' and suppliers' investment in U.S. production capacity has created serious problems, as well as opportunities, for the traditional U.S. auto industry.

Using primary research performed at the Office for the Study of Automotive Transportation and secondary sources, this paper outlines some of the major business strategy, labor, and political issues facing Japanese and U.S. automotive industry management as automotive investment is transferred to various world regions.