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Briefly describe the history of the car industry, focussing on its locational changes.

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Introduction

Locational Case Study The Growth and Spread of the Car Industry Briefly describe the history of the car industry, focussing on its locational changes. The first motor car was built in 1885 by Karl Benz, but it was the USA that established early dominance in the industry by introducing production-line assembly. Whilst global production is still dominated by developed countries, a number of developing nations, e.g. Brazil and South Korea are improving their production rates. The industry became multinational in 1911 when Ford chose Manchester as the first location outside of the United States. In the UK, the country was selected by three of the leading Japanese manufacturers (Nissan, Toyota and Honda). After a collapse of production from 1975 to 1982 in the West Midlands, there was room for new industry and companies to move into the area to make use of the experienced labour. Nissan began in Sunderland from 1986, and Toyota and Honda followed in Derbyshire and Swindon respectively in 1992. ...read more.

Middle

Toyota decided to locate in France for a variety of reasons, with political factors having a strong emphasis. * Considered Prague, but poor labour climate put Toyota off. * Toyota was uneasy about uncertainty of Poland's prospects for EU membership and how this could affect future exports, labour and economy. Decided against Poland because it was too much of a risk. * Toyota wanted to 'break' the French car industry. The French said they have a "greater degree of nationalism" because the market is so difficult to break. They prefer to purchase French-built cars. Locating in France would provide a firm base to begin to sell more cars there. * The UK was considered but turned down after Toyota stated "we would prefer to [locate] in continental Europe rather than Britain". They did not wish to place all of their production at one site on the edge of Europe e.g. UK or Poland. ...read more.

Conclusion

* Good regional raw materials * Large pool of skilled labour * Near Santos - huge port complex * Mature industrial contacts * Largest market internally * Sao Paulo hub of road, rail, air and telecommunications * Welcoming state and federal governments * Once Sao Paulo established, other southwest locations developed (Rio de Janeiro and Belo) - 1987 Fiat opened employing 10,000 producing 130,000 vehicles per year * Other regions now attracting investment - high labour costs in Germany forced Mercedes-Benz to locate in Brazil. * Renault, lacking space in Europe, moved to alternative locations within Brazil, for the following reasons: * High quality of life * Improvements in port, with low handling charges * Proximity to large southeast markets * Near expanding markets elsewhere * Low tax Summary: Foreign transnationals assembling components mainly produced in LEDCs for Brazilian market. Then they used Brazil to produce for Brazilian market, and then used Brazil to produce for expanded South American market also. Now exporting parts and vehicles to other LEDCs. ?? ?? ?? ?? Nick Dunn ...read more.

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