Competition and Development in Automotive Global Value Chains: Insights from Thailand, South Africa and Argentina

This article examines the varying outcomes of countries participating in the automotive global value chain (GVC), focusing on Thailand, South Africa, and Argentina. While all three countries had similar starting points in the 1990s, Thailand outperformed the others by achieving greater scale in vehicle production, leading to significant local economic benefits, such as trade surpluses, expanded supply chains, and the localization of R&D activities. The paper introduces the concept of the ‘adding-up problem’ in automotive GVC participation, where lead firms centralize production and R&D to maximize economies of scale, leaving competing countries with limited production volumes and weaker local supply chains. Based on more than 100 semi-structured interviews, along with industry statistics, this study compares the automotive industries of the three countries, focusing on their competition in medium-sized pickup truck production. The paper contributes to GVC literature by refining the understanding of zero-sum dynamics in global production. We demonstrate that countries’ success is constrained by the relational nature of GVC competition, but show that the automotive GVC nonetheless offers substantial economic development benefits for participating countries. Thailand’s superior performance is explained through serendipitous factors like income level and location, as well as first-mover advantages due to strategic industrial policies.