Relocation of Car Manufacturers: Wise Solution or Costly Setback?

Marian Liviu Mocan
Politehnica University from Timisoara, Romania

Attila Turi
Politehnica University from Timisoara, Romania

Gilles Goncalves
Univ Lille Nord de France, France

Sorin-Ioan Maistor
Politehnica University from Timisoara, Romania

The paper outlines the current concern of relocation in automotive industry in order to adapt to market conditions by shifting production towards emerging countries. Car manufacturers strive to reduce their operational costs to compensate weak sales in an attempt to overcome the slow market revival and remain globally competitive. The paper focuses on the Dacia-Renault low-cost car policy and uses the case research method to describe differences in consumer behaviour on the French, Romanian and Moroccan car markets. Relevant data and indicators for automotive industry from these 3 countries are analysed and compared by using linear interpolation providing an aggregate indicator with an overview on market dynamics and perspectives. Preliminary results show that drivers of relocation are mainly related to market opportunity, workforce costs and infrastructure. Macroeconomic indicators, acquiring needed skills by local workforce and a good management capacity seem to be more delicate issues. Moreover authorities from emerging countries provide fiscal advantages for car manufacturers willing to relocate their activity or build a new factory as they are a source of wellbeing for its population and economic growth for the country. The research conducts an analysis of advantages and disadvantages of relocation and provides recommendations to improve competitiveness and assure sustainable development of both car manufacturing companies and their supply chain.

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