RAC Cars News


Where Does Your Car Come From?

By raccars Published

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You may think the answer to this question is obvious, if you're driving around in an oh-so-Italian, flirty little Fiat 500, for example, or a thoroughly Teutonic Mercedes-Benz S-Class. You'd be surprised...

With car manufacturing worldwide up by 60% since 1999, it's probably natural for a shift in power to have occurred along the way. China is now the source of around 25% of new cars, and with production at 65,386,596 units last year, that's an awful lot of metal. Most of these are destined for export, with vehicle penetration of some 40 cars per thousand people on home territory versus about 700 cars per thousand capita in the G7 markets.

Few industries have embraced globalisation as enthusiastically as car manufacturing. This has resulted in huge opportunities for countries such as China or India, which has fast become one of the largest car makers in the world and still growing. On the other hand, some of the more traditional auto building hubs have seen their local industry go the way of Northern coal mines in the Eighties. Detroit, for example, once known as the 'motor city' has faced bankruptcy after the global economic crisis of the past few years wrought havoc among the three biggest US auto manufacturers. Australia has been deserted altogether by car manufacturers, which prefer the cheaper costs of production in Asia.

This international level of corporate restructuring is likely to continue as Europe struggles to keep up with the lower costs and higher volumes of production in cheaper locations such as Asia and South America. PSA Peugeot-Citroen, Fiat and Opel-Vauxhall are battling to keep their heads above water against companies such as Hyundai, never considered serious competition in the past, which has become the third biggest car maker in the world. Encouraging as this is for the South Korean economy, it's bad news for Europe.

The result may also be disappointing for car owners. While a car brand may be famously synonymous with its home country, manufacture now often takes place a long way away. The major names in the industry have shifted production to China, India and more and more to Central and South America, particularly Mexico and Brazil. That funky little Fiat 500 in fact comes from Poland, or from Mexico if you're from North America. The main output of the German Big Three (BMW, Audi and Mercedes) is from South Africa, China, India and the USA. If you suffer from badge snobbery, it's probably best not to ponder the issue too deeply...

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