Peugeot 307

Although multinational growth extends back to 1920s, when Ford and General Motors established their European subsidiaries, until the 1970s the world auto industry was made up of fairly separate national markets. Each of the larger national markets was supplied primarily by domestic production, and indigenous manufacturers tended to be market leaders. For example in 1970, the Big Three (GM, Ford, and Chrysler) held close to 85 percent of the US market, VW and Daimler Benz dominated the market in Germany, as did Fiat in Italy, British Leyland (later Rover) in the UK, Seat in Spain, and Renault, Peugeot, and Citroen in France. By 2004, the industry was global in scope——the world’’s leading manufacturers were competing in most of the countries of the world. Internationalization required establishing distributors and dealership networks in overseas countries, and often building manufacturing plants. Foreign direct investment in manufacturing plants had been encouraged by trade restrictions. Restrictions on Japanese automobile imports into the North America and Europe encouraged the Japanese automakers to build plants in these regions. Table 4.12 shows some of the North American auto plants established by overseas (mainly Japanese) companies. Similarly, the high tariffs protecting the motor vehicle markets of most Asian and Latin American countries obliged the major automakers to set up local assembly. [Table 4.12 about here] Different companies has pursued different…