The Expanded Automotive Value Chain

Publication Type:

Conference Paper

Source:

Gerpisa colloquium, Paris (2021)

Keywords:

finance, fleets, insurance, used vehicles, value chain, vehicle repair and servicing

Abstract:

The analysis of the automotive value chain focuses on manufacturing, though it is often extended to include new vehicle retailing. That is too narrow, as GERPISA has members who focus on end-of-vehicle-life issues, and an array of mobility issues including the motorcycle market in South and Southeast Asia. I argue that it is important to develop a wider perspective, including commercial fleets, finance and leasing, vehicle service and segments within used vehicle marketing such as BHPH (buy-here, pay-here) used vehicle dealerships.

One goal is to simply (or not so simply!) to trace the extended value chain, attaching numbers on employment and revenue to the segments, that if not ignored, are generally not quantified. The second is to trace interactions between pieces of the chain, such as the feedback between fleets, used vehicle, and new vehicle markets, and between finance and used/new vehicle sales. That is, while we are stuck with the term "chain," it is better to think of the industry as composed of multiple segments that do not link together in a straightforward manner. To illustrate the utility of this extended conceptualization, I analyze the interaction of new and used vehicle markets in the US under the impact the COVID-19 pandemic.

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