Experience of Localizing Value Chains in the Automotive Industry

Abstract

Aim. The presented study aims to illustrate that by making use of industrial localization tools, the one business space (OBS) system solves the problem of replacing global value chains with local ones, leading to positive innovation-oriented structural sectoral transformations and the development of the economy’s export-oriented potential.Tasks. The authors examine the types of localization and the strategy of an automotive company for the formation and operation of regional sectoral OBS systems over time (2012–2019) through the example of the petrochemical and metalworking industries in the Republic of Tatarstan, showing the possibility of transforming industrial localization into import substitution.Methods. This study uses modern achievements of the theory of knowledge, innovation-driven development, methods of systematization and analysis, empirical research, including the collection, examination, and generalization of practical material, forecasting, analysis of the works of Russian and foreign scientists in the field of technological and non-technological activities, principles of change management.Results. By using industrial localization tools for the formation of multiple value chains in the host region within the framework of a partnership, it is possible to create an industry-wide vertically integrated management system for the innovation-driven development of automotive components production at the regional level. Horizontal integration into the social, scientific, and educational spheres of regions is a mandatory aspect for the development of such systems, which leads, among other things, to the development of scientific potential while also improving the quality of human capital. Within the framework of OBS, regional value chains are formed — from the extraction of raw materials to the final assembly of the car — with a total average annual turnover of 25 billion rubles. A significant number of jobs are created, as well as new automotive components and materials with unique properties for the Russian industry. This facilitates the production of Russian analogues in the interests of other OEMs and consumers, as well as the transformation of industrial localization into import substitution. In addition, products of localization are beginning to replace their analogues in the global supply chains of automotive components, thereby developing the export-oriented component of the regional economy.Conclusions. In certain cases, industrial localization in OBS systems is transformed into import substitution, significantly increasing the efficiency of industrialization in the region and the country as a whole.