Globalization, Outsourcing and Modularity in the Auto Industry

The paper discusses the relationship between globalization and, modularization and outsourcing in the auto industry. It maintains that modularity is a broad concept, applicable and applied to product design, manufacturing and organization and that modularization is a strategy aimed at reducing the complexity stemming from globalization of products, markets and production. However, modularity has only recently moved its first steps in auto design and manufacturing and is a vaguely defined and ambiguously used concept in the auto industry. The paper suggests that, in the auto industry, economic and institutional factors related to globalization represent key drivers of modularization as much as technology. Besides, as the auto industry globalize, modularization and outsourcing, though remaining conceptually distinct, tend to become, in practice, increasingly inseparable.