This article examines a heretofore underexplored category of automotive‐producing nation known as the semi‐periphery. These nations are neither “core” automotive nations whose power derives from hosting headquarters of major automakers, nor are they low‐cost members of the automotive “integrated periphery” like Mexico or countries in Central and Eastern Europe or North Africa. Through a case study of one semi‐periphery country, Canada, the paper assesses automotive semi‐periphery countries' capacity to transition to knowledge‐based activities more typically associated with “core” automotive nations. In so doing, it raises implications for other “semi‐periphery” automotive‐producing nations as well as those currently categorized as “core” or “integrated periphery.”
For generations, automotive manufacturing has made an outsized contribution to the Canadian economy. The industry's growth was supported by active industrial policy, including an evolving combination of incentives: low-cost, high-quality labour, access to the largest market in the world, and investment inducements; and deterrents: market access and trade-related levers and threats. In recent years, many of the advantages Canada made for itself have eroded. The rise of new competitors, shifting philosophies surrounding trade, cost pressures, and a new paradigm with respect to investment incentives have challenged policy-makers. Several attributes previously considered the preserve of advanced countries like Canada are now evident in lesser developed jurisdictions, a phenomenon that this paper terms the commoditisation of automotive assembly. It is the result of standardised production processes and the automotive industry's ability to recruit top tier talent, particularly in less developed countries. This phenomenon is evident in the convergence of quality results and capital intensity across geographic boundaries and economic strata, expanding production in lesser developed countries, the emergence of luxury vehicle production in those countries, and stagnation of final assembly production in developed countries.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.