Regional Strategy and Performance in the Global Automotive Industry

Twenty years ago, Kenichi Ohmae (1985) published Triad Power, a path-breaking book, which has become a classic in the international business literature. Ohmae concluded that the world was far from global, but rather regionally organised, with the United States, Europe and Japan as the ‘triad powers’, dominating world trade and investment. Extending this line of thought, Rugman demonstrated that the vast majority of trade is intra-regional (meaning it takes place within either North America, the European Union or Asia), rather than inter-regional (Rugman, 2000, 2005). The following statement on the automotive industry is illustrative:… more than 85% of all the automobiles produced in North America are built in North American factories owned by Japanese and European MNEs as well as by General Motors, Ford and Daimler-Chrysler. In Europe the story is the same, as it is in Japan. (Rugman, 2000, p. 2)