An investigation into offshoring and backshoring in the German automotive industry

Rüdiger Holz

• Publisher: GRIN Verlag
• Year: 2011
• Edition: 0
• eBook ISBN:
  9783640808113
• Topic: Business
• Subtopic: Management
• Index: Business

Doctoral Thesis / Dissertation from the year 2009 in the subject Business economics - Business Management, Corporate Governance, Swansea University, language: English, abstract: Domestic market stagnation, cost pressures, intensified international competition and chances of emerging markets, have forced the German automotive industry to utilize international location advantages and thus production relocations have become the main strategy to survive in a globalized automotive market. These relocation activities are often viewed as being one-way directed and affected jobs are perceived as being permanent losses for the domestic economy. But in reality, relocation activities are becoming increasingly dynamic and since the turn of the century, more and more cases have been discovered, involving businesses that are returning their productions from abroad.This study has involved exhaustive research to investigate the current scope and scale of Offshoring and Backshoring activities within the German automotive industry and its impact to the domestic labour market by means of a questionnaire survey. The results of the more than two hundred survey responses show that Offshoring activities continue to proceed and a strong shift in Offshoring activities at present takes place from the Eastern European to Asian regions, resulting in agglomeration, "band wagon" effects as well asexcess capacities especially in the Chinese market. The study further shows that relocation activities in the automotive industry nowadays do not necessarily result in higher earnings and constant cost savings but rather contribute to an increased competitiveness and to the future survival of the company. Beside ongoing factor price equalization within the age of globalization, a trend in Backshoring activities as stipulated by the media could not be observed so far. Above all, this can be drawn back on the high cost of Offshoring activities and low profit margins within the industry.The findings of the study further concluded that Offshoring has indirectly contributed to the safeguarding of productive and especially non productive jobs at the domestic locations. Althoughanticipated by press and media, Backshoring does not have any impacts on the domestic labour market.