Country of Origin Effect: A Comparative Research of Toyota and PSA Peugeot Citroen

Topics: Peugeot, Toyota, Citroën Pages: 22 (7048 words) Published: January 25, 2010
The home bias in the automotive industry, a comparative research of Toyota and PSA Peugeot Citroën.

TABLE OF CONTENTS

INTRODUCTION  P.3

RESEARCH DESIGN                                                                                                                  P.3

BACKGROUND OF TOYOTA P.4

BACKGROUND OF PSA PEUGEOT CITROËN P.6

RESEARCH RESULTS P.8

DISCUSSION & CONCLUSION P.19

REFERENCES P.21

FIGURE 1: MOBILITY, PEOPLE AND SUSTAINABILITY P.5

FIGURE 2: TOYOTA – R&D INTERNATIONALIZATION  P.9

FIGURE 3: TOYOTA PATENT PORTFOLIO  P.10

FIGURE 4: TOYOTA 20 MOST PATENTED TECHNOLOGIES  P.10

FIGURE 5: CAR BRANDS PATENT DISTRIBUTION  P.11

FIGURE 6: PEUGEOT PATENT PORTFOLIO  P.12

FIGURE 7: TOYOTA R&D LOCATIONS  P.14

FIGURE 8: PEUGEOT R&D LOCATIONS P.17 INTRODUCTION

The last decade has been characterized by an increasing focus on the globalization within the various departments of multinational businesses. The urge of firms to adopt a global business strategy in order to sustain its competitiveness in the current markets is also visible in the R&D area, as many have launched globalization initiatives motivated by the opportunities to attract foreign talent, create competitive cost structures, and create market proximities. Mergers and acquisitions further stimulate the adaptation and integration of R&D activities. The automotive industry, however, is showing a somewhat distinguished picture. As scientific knowledge and technological expertise are becoming increasingly regionalized, and technologies are changing more rapidly than ever, automotive manufacturers are forced to keep a tight eye on their R&D efforts (Calabrese, 2001). This relates to the argument that R&D projects should sometimes be kept within the home base for security reasons. In fact, R&D globalization in the car industry appears to be somewhat limited compared to that of other industries in terms of international duplication and diversification of technology (Calabrese, 2001). This trend, also known as the home bias, is described by Cohen et al. (2009) as applying especially to more important R&D processes. This paper examines the major R&D activities of Toyota and PSA Peugeot Citroën by comparing several indicators and relating these to institutional differences.

RESEARCH DESIGN

Numerous reasons could explain why an automotive manufacturer may not globalize its R&D activities. One problem may relate to corporate inertia; sometimes a gravitational pull can be seen towards the accumulated assets and capabilities (Cohen et al, 2009). Especially when dealing with incremental shifts R&D projects may be biased towards the old knowledge base. Another issue is maturation, since foreign R&D subsidiaries are likely to encounter a certain learning curve, which prevents them from initiating in any core strategic R&D projects until they have gained sufficient experience. Additionally, complexity plays a role because a car consists of over 30.000 parts which need to be put together somehow. Other reasons relate to the requirement for multidisciplinary inputs (design, technology, ICT etc), and the need for prototyping and testing. In order to provide an insight into the home bias and highlight constraining effects caused by national differences, this paper compares the major research and innovation processes of Toyota and PSA Peugeot Citroën, and will discuss the following research question:

TO WHAT EXTENT DO GEOGRAPHICAL CONSTRAINTS CHARACTERIZE THE R&D PROJECTS OF TOYOTA AND PSA PEUGEOT CITROËN AND WHAT EXPLAINS THEM?

Toyota and PSA Peugeot Citroën provide an interesting comparison because they have different countries of origin, and differ greatly in size. Toyota being the largest car manufacturer in the world, and...

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