Changing Economic Geography

Learning from Mexico

During the 2000s, Audi doubled the number of models and variations to roughly 60, adding to overall sales. Meanwhile, global markets grew. As a result, they needed to add assembly capacity. But where? Similarly, where should suppliers locate their engineering operations? At headquarters in their founding location, or in Detroit and Shanghai? This set of issues—where assembly should locate relative to markets, where parts production should be located relative to assembly, and where the engineering services should be based that support both of these—is closely tied to evolving technologies, which range from the costs of transportation to the development of digital engineering.

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