Structural change and the Single Market Programme: the case of the UK automotive component industry

Abstract

This paper examines the Single Market Programme's (SMP) effects on restructuring in the UK automotive component industry. The SMP is found to have failed to remove impediments to restructuring, because of areas the programme did not address and because of an inertia to restructuring caused by existing structures and strategies in the multinational dominated industry. However, restructuring is found to be driven by Japanese car transplants, whose initial location decisions are strongly linked to the influence of the programme. The probability that the Japanese will benefit most from the programme has serious consequences for the distribution of effects of the SMP, raising important issues for policy‐makers and the component industries of the EU and UK.