Autore
Ciravegna, Luciano

Titolo
Turin's automotive cluster: Fiat crisis and the threat of delocalization.
Periodico
Università degli Studi del Piemonte Orientale 'A. Avogadro' : Facoltà di Economia - Dipartimento di Scienze Economiche e Metodi Quantitativi "SEMEQ" - Quaderni
Anno: 2006 - Volume: 06 - Fascicolo: 12 - Pagina iniziale: 1 - Pagina finale: 75

Abstract Since the 1950s, the Italian automotive industry has revolved around an array of niche producers (Alfa Romeo, Bugatti, Lancia, Lamborghini, Maserati, Ferrari) and one big volume producer, Fiat, that has gradually absorbed most of its smaller domestic competitors but Lamborghini and Bugatti (lately purchased by the VW group). Up to now, partly due to political obstacles to it, there has been no foreign direct investment by automotive original equipment manufacturers (OEMs) in the Italian territory. As a result, the Italian automotive industry has developed and still remains strongly concentrated in the area around Turin, where Fiat, whose brand's acronym is "Italian Factory of Automobiles in Turin" was founded. Until the 1990s, Fiat produced more than half of its annual output in the Turin plants. Fiat's organization of the local automotive value chain determined to a large extent the evolutionary path of the cluster: its linkages with local institutions, its division of labour, the way local actors generated innovation, their spatial configuration, their governance system, and their insertion into global markets. Since the late 1990s, Fiat's sales began to decline, causing a strong reduction in demand for the firms located in Turin's automotive cluster, that had concentrated their sales to one only OEM (Berta, 2006). Newspapers, policy makers, and sectoral organizations began signalling fears of delocalization of Turin's automotive cluster, as Fiat's production volumes declined (Berta, 2006), and as the latter shifted more of its assembly operations to cost - efficient locations far from Turin (Balcet, 2003), such as Melfi, in the South of Italy, Tichie, in Poland, and Betim, in Brazil. What are the consequences of Fiat's reduction of production in Turin for the automotive cluster? How will the local system change if Fiat eventually ceases to make cars locally? Are fears of delocalization justified? The question related to the threat of delocalization of the Turin automotive cluster is a key question for the local economy, as it is symptomatic of the area's transition from a manufacturing - based economy to a more knowledge - intensive economy (Berta, 2006). The productive system that evolved historically to supply Fiat with the necessary inputs to make cars is a highly diverse and complex network of socio — economic actors with specific competencies and locational determinants. Thus, in order to evaluate how such system has reacted to Fiat's progressive delocalization of production from Turin, it is necessary to analyze the organization and structure of the automotive value chain lead by Fiat. In particular, it is important to identify the types of activities performed locally as part of the automotive value chain; distinguishing those that are strictly dependent on Fiat's manufacturing operations from those that are not. Given that the actual configuration of the automotive cluster results from a long evolutionary path, the paper firstly provides a historical insight into the emergence of Turin's automotive cluster, and its governance structure. Secondly, it elaborates a breakdown scheme of the automotive value chain, with reference to Fiat's specific local organizational structures in Turin. On the basis of such value chain, firms are analyzed by dividing them into groups according to the nodes of the chain where they operate. Combining quantitative data from official sources, and qualitative data from a survey and targeted interviews conducted by the author between April and July 2005, the paper argues that the cluster has become more fragmented as a production system after Fiat's decline, and that in the cluster there are signs of emergence of a sub cluster characterized by linkages with global value chains and by high knowledge intensity of the activities performed. This is the agglomeration of firms providing product development services. In the last section, the paper focuses on such cluster within the cluster, attempting to identify the several phases involved in developing the automotive product and process. The picture that emerges from this research is that in Turin there seems to be a complex, highly interlinked network of 200 firms that provide knowledge - intensive design and engineering services to the global automotive industry. Their patterns of insertion into global value chains tend to be different from those prevailing in the rest of the cluster, as their linkages to local universities and R&D centres. The findings provide the basis for further research on this particular group of automotive firms, as to verify how far they are generating a new cluster, and how far such cluster is linked to the broader automotive cluster of Turin.




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