3 - Jacobs University

ever, to improve the structure of the presented argumentation, it is meaningful to first introduce the
specifics of the automotive business sector and their implications on quality auditing.
4 Specifics of the Automotive Industry
Strategic decision making in any organization is a complex process which has multiple dimensions
besides the quality aspects (especially important are the financial incentives). It is therefore the
responsibility of quality managers to understand corporate strategies, to identify the quality challenges
resulting from them and accordingly to counteract these challenges in order to guarantee
the effectiveness of their quality management tools and eventually the high quality of final products.
For these reasons the current section introduces the major aspects of the automotive sector, its
driving factors and draws conclusions upon particularly important aspects relevant for the quality
auditing process.
4.1 Internationalization of the Automotive Operations
Until the 1980s major automotive players had their operations concentrated mainly on the local
markets and international presence, even though existing, was quite limited (Veloso & Kumar,
2002). Moreover, most of the automotive sales were generated in the Triad – USA, Western Europe,
and Japan. American automotive producers dominated the American market, Japanese car
manufacturers dominated the Japanese market and the European players were present mostly in
Europe. However, automotive producers had been facing a mature market in the Triad for decades
with limited annual market growth and were looking for ways to expand their customer base. This
is the reason why in the recent a few decades the international presence of automotive producers
increased, which intensified the competition for market share. Local brands were highly affected
by this global expansion. American producers for example lost about 20 percent of their local
market share to Japanese car-makers (Veloso & Kumar, 2002). Similar trends were observed in
Europe as well, though on smaller scale due to stricter trade regulations (Veloso & Kumar, 2002)
and higher quality standard of the European manufacturers.
The increase of international operations, however, was not limited only to the Triad. In the late
1980s and the 1990s a number of new markets outside the Triad opened and offered opportunities
to the automotive players to increase their market share. Governments in South America and Asia
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