End of Globalization & Automotive Industry

Since the end of 2020, the automobile industry has faced many difficulties because the supply chain of various parts that despise semiconductors does not work as before. At first, it was predicted that it would be a temporary situation due to the Covid-19 virus pandemic, but the situation has not improved until a year and a half later. The superficially visible situation shows that large tier-1s such as Bosch and Continental are filing to supply systems to OEMs to produce cars, but the inside story is much more complicated. Factors are such as U.S. pressure to exclude China from the global supply chain, incorrect prediction of demand for automobiles, increased electronic parts used as internal combustion engine vehicles accelerated shift to electric vehicles, and increased demand for electronic devices and semiconductors.

In addition, the Ukrainian-Russian war cast another dark shadow on the automobile industry. The globalization, which began at the end of the 20th century, has had a very positive effect on the automobile industry to expand the market by lowering production costs. However, I feel that the rise of China, the disgruntled United States, and Russia, who wants to join as another axis of power like United States, EU, and China, are slowing down the globalization that has been achieved so far. And in the future, it is strongly expected to drive businesses into a situation where they cannot do business in the same way as before.

Globalized World

From a big perspective, I think that we have finally reached a certain limit of globalization that we have pursued so far. We'll have to wait and see, but if so, not only will we have to give up a lot of the economic and cultural benefits we've enjoyed so far, but we'll also have to partially or entirely tear down the business models that have already been built by companies in the industry. I really hope that the current situation will not be the end of the Golbalization which will cost a lot.