Optimizing the Location of R&D and Production Activities: Trends in the Automotive Industry

Abstract

This article analyses the location strategies pursued by multinational corporations. The empirical study is based on automobile MNCs of Triad nations, which need to optimize the location of their activities in order to remain competitive. The main objective of the paper is to determine to which extent automotive MNCs are globalized or regionalized. The analysis focuses on production and R&D activities, which play a strategic role in the global value chain of companies. The arguments presented show that, whilst most car manufacturers used to concentrate a large part of production and R&D activities in their country of origin or home region, they currently accelerate the geographic diversification of investments. Thus, the importance of production and, to a lesser extent, of R&D facilities based abroad is constantly growing, especially in emerging markets, which can be considered particularly attractive territories for MNCs. In a context in which the attractiveness of countries and regions appears to be in a state of constant change, the present study contributes to a better understanding of the location choices made by automotive MNCs.