Plant Location Patterns in the European Automobile Supplier Industry

Motor vehicle and motor vehicle parts production tend to exhibit a strong degree of agglomeration. We estimate a location model utilizing detailed plant-level data for over 1,700 European locations of the largest motor vehicle parts suppliers, as well as the location of all light vehicle assembly plants operational in 2010. This unique data set allows us to estimate a location model for the region at a significantly higher level of resolution than the previous literature. The results suggest that the main forces of agglomeration in the European auto supplier sector are highway access and the desire to locate near assembly plants as well as near other parts-producing plants.