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The Motor Vehicle Industry –
A Consumer Industry
This is 1 of the world’s most important industries. It is dominated by TNCs with production mainly in
MEDCs where there are markets. However there is an increasing amount of production in Brazil & SE
Asia due to new markets & good infrastructure.
Fordist Mass Production (Just in Case)
Mass production developed to produce a people’s car – cheap. An assembly line is used to bring the
components together & each worker performs a specific, repetitive task for economies of scale.
However only a small range of models can be made. They are now looking for new locations to reduce
costs & find new markets.
Lean Production Method (Just in Time)
Combines the benefits of mass production with increased flexibility. There is a reduction in costs, an
improvement in quality & a greater range of products. There are also a number of sub-assemblies.
Workers are guaranteed long-term employment & good wages.
Comparing Mass production & lean production
Mass Production
Technology
Complex & rigid. Time & cost
penalties involved in switching
products
Labour Force
Semi-skilled or unskilled
performing a repetitive task
Supplier
Distant relationship. Large stocks
Relationship
held at the plant "Just in Case"
Production Volume Extremely High
Production Variety Narrow range of standardised designs
Lean Production
Highly flexible, modular
component systems
Multi-skilled
workers in teams
Very close relationship
Extremely high
Increasingly wide range of products.
Role of Government in Location of industry
Government has a very important role in the location of industry.
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State policy – Some governments may have a direct stake in the company e.g. Fiat. There may
also be controls on how much foreign firms can access domestic markets to help their own firms
e.g. France gives only limited access. Tariffs can force companies to set-up branch plants to access
the markets.
Local Content – The government may insist on a substantial number of parts being made
domestically to ensure there is a beneficial multiplier effect e.g. Brazil 50%
Concessions & incentives – Governments want to encourage investment as it provides economic
stimulus & competition for domestic firms. Incentives may also be offered by local regions to
attract companies there.
Supranational governments
Policies influenced by joint policies between countries e.g. EU single currency has created the world’s
largest single market. Therefore Japanese companies use UK as launch pad for Europe.