Beyond ‘1992’: The Evolution of European Community Policies towards the Automobile Industry

Abstract

Two processes figured prominently on the European Community's policymaking agenda during the 1980s and into the early 1990s. These were the single internal market programme, and the economic challenge from Japan. The automobile industry was particularly closely involved in these, because of the extent of Japanese exports and direct foreign investment in the sector, and the range of national state interventions, most of which ran contrary to the ‘1992’ programme. In this paper therefore the issues which underpin the role of the industry in the drive to create a single internal market and to respond to the expansion of ‘transplant’ assembly capacity are considered first. The policies which have been adopted by the EC in this context are then examined, and the author goes on to identify the limitations upon the policies which have emerged. The paper concludes with reflection on the evident tensions between national state policies and those of the EC and argues that (partly because of these) the political debate has excessively concentrated upon the strategies of vehicle assemblers. This is unfortunate because it obscures the deeper implications of change for the automotive components industry where, it is suggested, there is greater scope for a more effective EC policy response.