The battle for competitiveness : a case study from the automobile industry

Everyone agrees today that healthy industry is essential for France. French industry is not doing well whereas the opposite is true of the German industrial sector. The French public has still not understood the meaning of competitiveness and how it conditions growth, profits and the creation of jobs. Patrick Pélata suggests casting light on this question by using the automobile industry – where competition is global and fierce – as an example. What role do social security contributions – which are very burdensome in France – play ? How can one explain Volkswagen’s very early industrial relocations, despite the fact that Germany is said to be the country which supports its industry the most ? What about the conquest of emerging markets ? Or trade policy (if one wants to go upmarket, one’s clients have to follow) ? What about the role of innovation and R&D ? It is clear that the battle for competitiveness implies that one has to react coherently and over a long period of time on several fronts, and that it does not adapt well to simplistic measures which might be encouraged by prevailing populism.