Since the late 1960s the geography of the automotive sector has been fairly fixed, with most car production in the region where the cars were sold. That strategy remains the mantra of many supply chain executives at OEMs today as well.

The exception to this of course has been Japan and Germany, which exported in large numbers to markets across the world. In the 1990s this began to evolve with growing exports from South Korea and major assembly plants opening in new locations, particularly with the emergence of China and India. Yet the export leaders remained Japan and Germany.

Has the recession begun to pick apart this model? In recent months the impacts of currency and market changes have led some carmakers to rethink where they will produce their cars for local consumption and exports.

Mazda’s CEO suggested that it is looking at creating new assembly facilities outside Japan. In an interview with Automotive News, Takashi Yamanouchi said that the company needed to protect itself better against changes in the prices of the yen, but continued saying, “The exchange rate is not the only reason to make a decision to have an offshore plant.”

Ford’s CEO, Allan Mulally has suggested that its US plants may export some of its production. It is rumoured that Kuga production in Louisville could be sold in Europe whilst John Fleming, Ford of Europe CEO, has suggested that Fiesta’s produced in Mexico could support European sales.

Certainly it appears that the competitiveness of Japan for the assembly of vehicles is declining. Whilst the value of the yen is in part to blame for this, the ability of Japanese carmakers to replicate the quality of their assembly operations within major markets, such as North America, Europe and emerging economies, also plays a part.

In contrast North America appears increasingly competitive. There is substantial unused capacity, not least in terms of workers in an economy with unemployment running at 10%. The production base is broad with a growing presence of Japanese, German and Korean carmakers. The dollar has fallen against the euro and the yen, and is likely to fall against the renminbi in the long run. This suggests that the US and Canadian production will grow in the coming years.

There is not yet enough change to make a firm judgement. But the economic fundamentals are suggesting big changes to the geography of the sector.