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This article presents a case study of the ?roll-out? of a "world car" (the Fiat Palio).
Based on original fieldwork carried on by the author in 6 countries (Italy, Brazil,
Poland, Turkey, Argentina, India), it describes one of the most diverse international
strategies in the recent history of the auto industry and represents an interesting terrain
for analyzing how, in relationship with globalization, outsourcing and modularity play
an increasing role in auto design and manufacturing.
The article addresses the following research questions: 1) Does the "world car"
approach represent a sustainable and robust strategy? 2) Is there a relationship between
globalization, modularization and outsourcing in the auto industry? 3) Can these
concepts be used to map out future developments and transformations in the contracting
structure of the auto industry?
This field study shows that producing and selling in many different places a car that
involves absolute cross-country identity of interior/exterior design, parts, and quality
standards (a "world car") represents an innovative and sustainable strategy. It also
highlights that the robustness of this strategy decreases as the international scope and
time span of the ?global? project increase.
The Fiat Palio story also represents the first in depth analysis of what are, at the firm
level, the dynamics that link globalization, outsourcing and modularization in the auto
industry. The article confirms that modularization a) is a vaguely defined and
ambiguously used term in the auto industry; b) is a broad concept, applicable and
applied to a number of systems (product design, manufacturing, work organization,
etc.); c) has only recently moved its first steps in auto design and manufacturing.
The embryonic applications of modularity in design, manufacturing and organization
reported in this study are used to map out future developments and transformations in
the product architectures and organizational architectures of the auto industry.
The article also suggests that, within a global strategy, modularization and outsourcing,
though remaining conceptually distinct, tend to become, in practice, increasingly
inseparable. The modularization of design, production and organization is intimately
related to how, while trying to save costs, reduce risky investment, and manage the
institutional constraints deriving from globalization, OEMs and suppliers partition their
tasks, defining a new international division of labor. |
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