First, terminology. Just as “mobility” has replaced “transportation” and “disruption” has replaced “competition” in general use, so “global” has replaced “international.” Speaking of that last pair, I am not sure there is much difference between the two adjectives, but technically (according to sources I looked at) a global company operates as a single integrated worldwide entity with standardized processes, while an international company operates more independently in different countries, adapting its approach to local conditions.
Be that as it may, there has been a lot of talk lately about de-globalizing, as in firms retreating to their home markets, moving production from far shores (e.g., China) to near (e.g. Mexico), selling off foreign subsidiaries, etc. It’s above my pay grade to weigh in on how real this trend is across industries, but we can take a look at the car business.
Here we have a great recent chart from UBS1 giving us a snapshot of major OEMs’ sales by region around the world, in 2023-24 - in units, not currency. (I do not know why Stellantis is not here.)
One can make at least three sweeping generalizations from this chart:
The Asian producers are the most global, if by that we mean evenly spread across regions of the world.
The European producers have made big bets on China - even bigger than on North America, I was surprised to see (though I would like to see this chart redone in currency, where I would expect significant shifts).
The two Americans are the least global, with each having one foreign outpost (Europe for Ford, and Latin America for GM)
What a change this represents for the Americans: goodbye to Volvo and Jaguar and Land Rover (and more) for Ford, goodbye to Saab and Opel (and more) for GM. For these two the Age of Empires is over, with a retreat back to the (admittedly-lucrative) home market. Circle the wagons, men!
While it somehow feels disappointing to sail back from foreign shores, at the present time it is proving an (inadvertent?) wise move for the Americans, as the European market is stuttering and Chinese consumers are turning their backs on foreign products. We all know about the hard, hard choices facing VW right now, in particular.
In the long run, a more diversified portfolio such as the Asians possess must make the best sense (just as it does in the stock market), but right now Staying Home seems to be a better plan for the Detroit Two than Going Global.
Of course, all this may shift dramatically once Tariff Man is in place. Buckle up!
APAC Focus: reduction, reposition and repurposing in China, Paul Gong et al., UBS, September 11, 2024