The Export Success of the Motor Industry Development Programme and the Implications for Trade and Industrial Policy

Developments in the automotive industry have received considerable positive publicity over the last few years. Firstly, and most importantly, this is a consequence of rapid export expansion, initially of components, but more recently also of vehicles. A second positive development is that the automotive sector has been the recipient of considerable foreign investment, including substantial fixed investment in assembly plants and component production. Thirdly, productivity has improved rapidly and there is substantial evidence of improvement in a range of benchmarks such as quality and operational shopfloor efficiency (Barnes and Kaplinsky, 2001). Fourthly, employment has remained relatively stable under difficult circumstances. Relative to the rest of the manufacturing sector, the automotive industry's share of sales, value added and investment have all increased over the period 1993-2001. On the whole it appears that the industry has weathered import liberalisation rather well. The above developments have been strongly influenced by the Motor Industry Development Programme (MIDP). The objective of this paper is to probe these developments in greater depth by examining the process of international integration under the MIDP in some detail, focusing on the export experience and its effects at the sub-sector and firm level. The paper also attempts to draw some conclusions as to the broader implications for trade and industrial policy.

  • Authors: Anthony Black
  • Year: 2002
  • Organisation: TIPS
  • Publisher: TIPS
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