The geography of the auto industry in Europe is the outcome of a process of organizational change and changing production strategies. The chapter begins with an analysis of the process of restructuring and the theory of the spatial organization of the industry. In particular, we draw on Lagendijk (1997), who argues that there is a ‘merging filière’ in Europe, and Bordenave and Lung (1996) and Lung (2002) who suggest four models for the spatial organization of the industry, which take into account the relative location of original equipment manufacturers (OEMs) and supply chain firms. The extremes might be seen as a ‘Swiss cheese’ model and a ‘Babybel’ model – in which the relative location of firms can be scattered or concentrated. The cluster model, however, has been increasingly referred to as describing the structure of the spatial organization of the industry (Porter, 1998; Blöcker et al., 2009). Therefore, the chapter first offers a general overview of the European auto industry as a prelude to an examination of the geography of the industry as it is currently understood to be constituted. It then presents an analysis of the drivers to change in the industry and the challenges to the industry, in order to consider how far the geography of production in Europe will undergo further change.
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