Mechanic Village Business Networks and Circular Economy Practices in the Automotive Industry

Abstract

The circular economy (CE) within the automotive industry has attracted the attention of business leaders, policymakers, and scholars in recognition of the negative impacts of the linear economy of ‘take, make, dispose’. In many developing countries, the absence of manufacturers and their approved service providers means that the automotive CE largely depend on informal micro-level CE business actors. These business actors are mostly clustered in networked mechanic villages and provide micro-level CE business opportunities. However, their micro-level CE practices and business potentials has not been explored in the literature. This paper addresses this important gap by drawing on Network Theory to show how the network CE practices of these business actors contribute to waste reduction, resource conservation, and CE eco-innovation. We also show a missing connection between the CE practices of these business actors and existing network business models that can be exploited for their benefit. We discuss our contribution in the context of the nuanced characteristics of the micro-level CE practices and business potentials that emerge from the network of these business actors. Finally, we recommend that automotive industry CE policies focus on integrating the practices of these informal micro-level CE business actors with macro and meso-level approaches.