...FCjhANALYZING CHINA’S AUTOMOBILE INDUSTRY COMPETITIVENESS THROUGH PORTER’S DIAMOND MODEL DI WU Bachelor of Management, University of Lethbridge, 2004 A Research Project Submitted to the School of Graduate Studies of the University of Lethbridge in Partial Fulfillment of the Requirements for the Degree MASTER OF SCIENCE IN MANAGEMENT Faculty of Management University of Lethbridge LETHBRIDGE, ALBERTA, CANADA © Di Wu, 2006 (Approval/ Signature page) ii Abstract This paper incorporates Porter’s diamond model to analyze China’s automobile industry. Besides looking at the four determinants of competitiveness in the original model, this study specifically examines the impact of government on industry competitiveness. This study retrieves archival data on multi-measurements used in prior studies. The author incorporates one case study of a Chinese auto firm to illustrate the specific impact of government policy and the responses of auto assemblers and component suppliers. Interviews with experts in auto-related industries are conducted to triangulate the findings. Results show that the Chinese auto industry is still in its early stages of development, whereas product quality and economies of scale of domestic automakers are approaching global standards; thus Chinese auto firms aim at becoming major players in the international market. The government plays an active role in assisting the industry development as the nation transitions from a planned economy to a free...
Words: 30906 - Pages: 124
...analysis of Chery automobile Submitted by: Resham Dhakal instructor : Ian choo Student No. P11016315 (CORP eve) Date: 2011-11-14 1 Introduction The main propose of this preliminary project is to analyses the present situation of Chinese automaker ‘Chery Automobile Co. Ltd. In order to analyses the present situation, we mainly focus on its internationalization process, its domestic market as well as international market, and its strategy of growth. And it is supported with different theories such as SWOT analysis, PEST analysis, Porter 5 Forces, 4Ps. 1.1 Chery at a Glance Chery is one of the Chinese fast growing state owned enterprise founded on 1997.with a capital of CNY 3.68 billion, and its first car came on a production on 1999. At present Chery owns for sub-brands, chery, karry , Rilich and rely. Currently Chery has 16 different module in maket and it possesses an annual production capacity of 900,000 automobiles. (Chery) . With the strategy of ‘Going out’ Chery become the first Chinese automobile company to export its production in overseas, including more then 80 countries. It offers cars, sedans, SUVs, and mini-vans on its different segment. Source – Chery International Co. ltd This figure show that, the total sale of Chery automobile is been increasing in every year, in the year 2008 its sale is 356,000 unit which is decrees by small present comparing to 381,000 on previous year 2007. Competition is the causes as Chery Chairma...
Words: 3039 - Pages: 13
...delivering the highest levels of consumer comfort, safety and convenience at competitive costs. Today’s global vehicle producers want design partners who are quick, innovative, reliable and responsive to change. They expect high quality and cost competitive products & services all delivered from a flexible and proactive business partner. What they want, Futuris delivers. Globally. Futuris is proud to create “the beauty within” for many of the world’s leading automotive brands, including GM, Ford, Toyota, Chery, Daimler, JAC and others. Copyright © Futuris Automotive Interiors. All Rights Reserved. www.futurisautomotive.com Futuris Automotive Interiors is 100% owned by Elders Corporation, a leading and publicly listed Australian diversified industrial. Futuris Automotive Interiors is part of the Futuris Automotive Group, which includes a 35% equity holding in Air International Thermal Systems. Futuris Automotive also has a range of joint venture partnerships globally – Chery Automobile and Pangeo in China, Feltex in South Africa, and MCK Pacific (the parent company of Plexicor) in Australia. main products seating seat systems seat hardware interior trim floor carpets door trims overhead systems trunk trim nvh acoustics products controls steering systems pedal systems modular assemblies...
Words: 391 - Pages: 2
...Chery Auto's Success Story (BSTR 377) ------------------------------------------------- Abstract: China based Chery Automobile is one of the top ten car manufacturers and the leading exporter of cars in the country. Started as an automotive company by the Wuhu government in 1997, Chery designed engines for cars. After finding no buyers for its engines, it decided to build its own car. Chery entered into tie-up with another automotive company which had license to sell cars to retail customers in China. After obtaining its own license, Chery implemented a four-phase strategy to develop its technical strengths. Chery started exporting cars as early as 2001 and became the largest exporter of cars among the Chinese car companies. Chery expanded globally to have its presence in over 70 countries by 2009. | | ------------------------------------------------- Issues: » Study and analyze the competitive strategies of Chinese automobile companies. » Understand how Chery Auto used available resources effectively to manufacture cars. » Examine how a startup company could develop R&D capabilities by collaborating with other firms. » Study the globalization strategies of Chery Auto. » Evaluate the challenges faced by Chery Auto in the near future. ------------------------------------------------- Contents: | Page No. | Introduction | 1 | Background Note | 2 | The Growth Strategy | 3 | Going Global | 5 | The Challenges | 7 | The Road Ahead | 9 | ...
Words: 1815 - Pages: 8
...Chery Motor Company Instructor: Dr. Deena Burris Global Management 398 Amanda Holst 921128 Fall 2015 Introduction Chery Motor Company was founded in 1997 to support the local economy in the underdeveloped Chinese province of Wuhu. Chery’s lack of proper licensing made it impossible for the company to sell automobiles outside the province. In 2001, a 20% share of Chery was purchased by Shanghai Automotive Industrial Association, which allowed the small firm to utilize their retail license and begin its expansion. Also in that year, Chery exported cars to Syria and was then the first company to export cars to the mainland. Chery expanded and was highly successful between 2000 and 2006, when their automobile sales increased by 303,000 units, making them the 3rd largest domestic auto company. To maintain this growth on the global automotive market, Chery has implemented a range of competitive business strategies. Competitive Strategies Chery has followed their guiding principle of “stabilizing through the domestic market, strengthening through the overseas market and developing the domestic market through the overseas market in a flexible way.” Their ‘going out’ strategy lead to the company becoming the first car enterprise exporting complete automobiles to foreign countries in China. Chery Motor Co has implemented a cost leadership strategy to establish and defend their desired strategic position. A cost leadership strategy is an integrated set of actions taken to produce...
Words: 1413 - Pages: 6
...The Growth of Independent Chinese Automotive Companies (Second Draft for Discussion) Jianxi Luo May 6, 2005 International Motor Vehicle Program, MIT Index 1 Overview of Current Chinese Automotive Industry……………1 2 The Burgeoning Independent Chinese Auto Companies………9 3 Case Study: Chery Automobile Company………………………14 3.1 Introduction………………………………………………………… 14 3.2 Characteristic Analysis…………………………………………….. 18 3.2.1 3.2.2 3.2.3 3.2.4 3.2.5 3.2.6 Technical Capabilities………………………………………………….18 Production Management……………………………………………….24 Product Characteristics……………………………………………….. 25 Intellectual Property…………………………………………………... 29 Exportation Strategies……………………………………………........33 Enterprise Culture…………………………………………………….. 36 3.3 Comparative Analysis ……………………………………………....36 4 Conclusions………………………………………………………. 42 References…………………………………………………………….47 1 Overview of Current Chinese Automotive Industry China’s first automobile manufacturing base, FAW (First Automobile Works), was built 50 years ago. From then on for over 30 years, there was no big progress in the Chinese automotive industry on both production and technology sides. Production capacity was low, and technology was outdated. From the middle 1980’s, with the establishments of joint ventures, the Chinese automobile industry began to develop faster than before. So far, all of the world's major automakers, such as General Motors, Toyota, Ford, Volkswagen, DaimlerChrysler, Nissan-Renault, PSA Peugeot Citroen,...
Words: 15842 - Pages: 64
...Chery Automobiles International Business Project Report 2014 Prepared by: Group 8, Section B Megha PGP17/093 Swati PGP17/117 Shreya PGP17/113 Umang PGP17/121 Ved PGP17/123 Contents Background of the company 3 Growth of the company 3 Chinese automotive industry 3 External Environment Analysis 4 Business Strategy 6 Internationalization 6 Competitive landscape 8 Chery automobile - During the recession 9 Chery automobile - After recession 10 Exhibits 11 References: 15 Background of the company Chery Automobile Co. Ltd is a government owned automobile manufacturing company in China founded in the year 1997.The product portfolio of Chery consists of 15 models which includes minivans, passenger cars and SUVs including the QQ compact, the A5 sedan, and V5 crossover. It also offers full electric and hybrid models. The exports of Chery account to 25% of its total production and it is the largest passenger car exporter since 2003. Chery has manufacturing facilities in China and their assembly operations are in around 15 countries. It has factories in Ukraine, Egypt, Uruguay, Syria, China, Iran, Indonesia, Malaysia, Thailand, Brazil, Taiwan, Venezuela, and Vietnam. Apart from that, Chery also focuses on new product development and its R&D expenses accounts to 7 % of total revenue. Growth of the company Due to certain quality issues faced by the auto exports from China, expansion plans of Chery have been challenged. Chinese products were...
Words: 3636 - Pages: 15
...2008 Chery Automobile: Vying for a Piece of the American Pie On the 4th of July 2007, while many Americans were attending Independence Day parades and patriotically celebrating the birth of their nation with family and friends, Yin Tongyao, president and chairman of Chery Automobile Company, was rejoicing over a historical deal he had just struck with the Chrysler LLC. The agreement, ratified at the Diaoyutai State Guesthouse in Beijing, was the first of its kind. It established an alliance whereby Chrysler would sell cars in the United States under the Dodge brand that would be completely manufactured in China by Chery. Yin had told the press earlier that day that he was “prepared to work with the Chrysler Group to expand their small-vehicle lineup with competitive products and accelerate both companies’ international competitiveness.”2 Yin’s elation was short-lived as his head started spinning with questions. He knew that the ten-year-old Chery was just weeks away from rolling out its one-millionth car, and he wondered which opportunities lay ahead for the relatively young automobile manufacturer. Chery was already exporting successfully to over fifty countries, but Yin had his sights set on the lucrative U.S. and European markets. Was this strategic alliance with Chrysler the best strategy for reaching them? How could Chery leverage the Chrysler deal while still staying true to its own goal of becoming a world-class automobile manufacturer? Chery Automobile Chery Automobile...
Words: 490 - Pages: 2
...Case Study I: Chery Automobile Company Situation Analysis Chery Automobile Company, an inexpensive car manufacturer attempt to expand its capacity and enter into a developed country with an expectation to be strong enough to compete internationally and become a global car maker. SWOT Analysis |Strengths |Weaknesses | | | | |Inexpensive car |Un qualified workforce in middle management | |Achieve low cost strategy |Sales satisfaction and customer service are below the industry | |Partner with a global automobile company like Chrysler |standard | |Strong relationship with suppliers |Imitation rather than Innovation | |Strong position in domestic market | | |Opportunities |Threats | | | ...
Words: 847 - Pages: 4
...Questions: 1. How did Chery Motor Co. device a strategic quality change process to improve the organizational performance to compete with the leading global competitors? Evaluate the implication of the change process and design systems to monitor the implementation. (AC 3.1, 3.3 & 3.4). Answer: Chery Motor Co. started off quite small and had licensing issues to sell automobiles outside of their province. In order to compete with global competitors they had to build: i. A strong domestic market for which they required retail license. They achieved this by allowing purchase of 20% ownership by Shanghai Automotive Industry Association in 2001, which allowed the small firm to utilize the SAIC retail license. Their first car export was to Syria in 2001. ii. Once they went international they invested in founding a research institute to improve the production quality, technology, and performance. It has two domestic R&D centers and invests around 7% of its total revenues in product development. They also hired a number of Japanese automotive consultants to assist the auto company in achieving the six sigma/ lean process standard to their Japanese/Western competitors. Not only did this improve their production processes but Chery was also granted ISO/TS 16949:2002 production qualities by 2005, the strictest international production quality certification available. This brought the company in conformance with the international standards of safety, reliability, and serviceability...
Words: 2606 - Pages: 11
...Intellectual Property Theft in the Automotive Industry Scope, Trends, and Mitigating Strategies Table of Contents Introduction………………………………………………………………………………..3 Scope of Intellectual Property Theft………………………………………………………3 Intellectual Property Theft and China……………………………………………………..4 Intellectual Property Theft in the Automotive Industry…………………………………...5 The Subtle Pick-Off……………………………………………………………….5 Piracy and China’s Global Emergence…………..………………………………………..6 Consequences of IP Theft…………………………………………………………………7 Mitigating Strategies………………………………………………………………………7 The Autoweb Intellectual Property Exchange…………………………………………….8 Fusion-DX………………………...………………………………………………9 GlobalSource………………………………………………………………….…..9 Data Integration Services……………………………………………………….…9 GlobalSource...………………………………………………………………….…9 Integrated Translations…………………………………………………………….9 Autoweb Company Overview……………………………………………………10 Bibliography………………………………………………………..……………………11 www.autoweb.net 2 Introduction I ntellectual Property protection in the manufactured goods sector is not a new idea. Laws prohibiting manufactured goods counterfeiting and piracy activities existed as far back as the Middle Ages when bakers, artisans, and craftsmen used distinctive marks to distinguish their products and work from would-be counterfeiters. The general problems associated with modern day counterfeiting and intellectual property piracy have long been recognized, yet today’s high-tech economy has magnified the problem of...
Words: 3125 - Pages: 13
...Case: R & D Electronics Company (Case adapted from: Heitger, L.E. and Heitger, D.L. (2008)., Issues in Accounting Education, 23(2), 261-272.) The Automotive Electronic Industry R & D Electronics Company is an established manufacturer and has been designing, manufacturing, and supplying electrical supplies in various forms to the automotive industry. The worldwide market for semiconductors in the automotive electronics industry exceeds $10 billion. In addition, wireless data delivery – currently is estimated to be a $20 billion industry, and experts predict that soon 50 percent of all new cars and 90 percent of higherend models will possess telematic-capable devices. Further, many experts estimate that 30 to 40 percent of the production value of all automobiles consist of electrical products. R & D Electronics historically has invested heavily in researching and developing auto-motive electronic technology in order to provide customers with state-of-the-art functionality, safety, and performance. R&D Electronics continues its heavy investment in this research and development arena because the resulting product features quickly devolve from being “cutting edge” features that create a competitive advantage to commodities that customers regard as standard features on all automobiles. R&D Electronics has continued to upgrade its research and development and manufacturing abilities to keep pace with changing technologies. For instance, R&D Electronics designs, produces, and installs...
Words: 3174 - Pages: 13
...Psychology- the scientific study of the human mind and its functions, especially those affecting behavior in a given context. That’s the definition given by Google. However, people agree that Psychology is more than a simple study of the mind. Psychology is a complex science, one that helps the Psychologist understand how the human mind behaves at any given time, helps the Psychologist comprehend how the human mind works. Psychology 101 states that Psychology has 5 basic goals, “Describe, Explain, Predict, Control, and Improve.” The goal of describing is to observe behavior and describe what was observed as unbiased as possible. Explaining is when a Psychologist has to analyze what was observed, and imagine the reason behind the actions. Predicting comes when we already know what and why it happens, and we want to figure out what will happen next. The next goal is controlling, which is another way of saying how we can stop what was predicted, to finally Improve the person’s life. Psychology, like every other science, has 2 major sections. Research, which increases knowledge of the subject, and practice, where our knowledge is used to solve problems in the world. Psychology touches many subjects, and has many different fields of study. About.com gives a few, “Biopsychology, clinical psychology, etc.” They also say that “psychology touches on a number of other subjects including biology, philosophy, anthropology, and sociology, new areas of research are continually...
Words: 492 - Pages: 2
...business. Besides, organizational learning is another circumstances that enter and into a joint venture to learn foreign knowledge about the business and skill from another partners. This report has considered several reasons why one succeeded and other one failed of the companies. Daimler Chrysler faced the impact of cultural differences that causes Daimler failure on IJV performance. Language barrier always be the problem of communicating. Moreover, lack of management is one of the failure reasons for Daimler due to the ineffective leadership of the president. Poor management with human resource management can be the main reason of failure. Chery Jaguar Land Rover, the human resource management is providing high standard of service and also attracting talented people to stay is the key success of the organization. The management skill of Chery Jaguar Land Rover is a high top quality management. It is recommended that managers and the partners of Daimler Chrysler must improve the communication skills to understand each other. Communication skills such as face to face communicating can help both sides to solve the problem of conflict because the more you communicate. In addition, they are more comfortable and confident to use own languages and accent to communicate with other people. Furthermore, Daimler Chrysler should find a potential president with effective leading skills and having an early planning on how...
Words: 371 - Pages: 2
...Ngô Nhật Vy 1401025162 – K53CLC3 EFFECTS OF FOREIGN DIRECT INVESTMENT LEADS ON MERCHANISM WHICH CAN LEAD TO SPILL-OVERS FDI has been considered as an important development tool, especially for countries at low level of industrial development. Receiving FDI bears two different sides of effects: positive and negative. One of that effect is spill-overs. Spill-over effect occurs when there is a gap of advanced production technology, managerial knowledge, and working practices between the receiver and the donator. Frequently, transnational corporation (TNCs) required domestic company to adjust new systems in order to remain market share and gain profit. Therefore, spill-over effect can be considered as the result of activity of FDI investor and modifications of local corporations. There are four types of spill-over effect: the labor mobility channel, demonstration channel, the forward and backward linkages and the competition channels. The labor mobility channel The movement of skilled personnel from foreign firms to domestic firms helps transferred advanced technology and management skills. Thanks to labor mobility, positive spill-over can be created by two ways: employees applied what they have learned to domestic companies or established the new ones. The demonstration channel It is one of the most important channel to create positive FDI effect There are three ways to transfer technology * Internal transfer: the transfer between parent company or TNC and...
Words: 1144 - Pages: 5
