Costs and Productivity in Automobile Production The Challenge of Japanese Efficiency

In this book the authors analyse the factors that contributed to the comparative cost competitiveness of auto industries over the period 1961-84.

Motor vehicles are prominent among the flows of exports and imports for Canada, Germany, Japan and the United States, and these trade flows are heavily influenced by the basic relative competitiveness of the production processes for automotive manufacturing. In this book the authors analyse in depth the factors that contributed to the comparative cost competitiveness of the four countries' auto industries over the period 1961–84, and disentangle the factors contributing to the Japanese cost and efficiency advantages. Their main contribution is to provide estimates of comparative costs of automobile production (both short-run and long-run) and the sources of these cost differences, based on the econometric cost-function methodology. An innovation is the careful treatment of capacity utilization, one of the most important sources of short-run cost and efficiency differences. This methodology is also used effectively in an analysis of the Canada-US Auto Pact, a unique experiment in trade liberalization.

Preface; 1. Introduction; 2. International differences in output, productivity and wages in the automobile industry: the 1950s to the mid-1980s; 3. The cost-function approach to the analysis of cost and total factor productivity differences; 4. Data base sources and method of construction; 5. Empirical results: estimation of the cost function; 6. Productivity growth in the automobile industry, 1970–84: a comparison of the United States, Japan, Germany and Canada; 7. International comparisons of automobile industry cost and productivity levels: Japan, Germany and the United States; 8. International comparisons of automobile industry cost and productivity levels: Canadian with US, Japanese and German production; 9. Summary and conclusions; References; Index.

Motor vehicles are prominent among the flows of exports and imports for Canada, Germany, Japan and the United States. In this book the authors analyse the factors that contributed to the comparative cost competitiveness of the four countries' auto industries over the period 1961-84, and disentangle the factors contributing to the Japanese cost and efficiency advantages. Their main contribution is to provide estimates of comparative costs of automobile production and the sources of these cost differences.