...increasing market with a huge potential. Though there is a huge foreign interest on this market, most foreign investment usually failed. In 2004 company acquire Harbin brewery in China. Foreign companies tend to face problem as provincial regulation are there to protect local companies and furthermore to keep the tax revenues within province. Regulatory roadblocks were designed to keep tax revenues at home. Many recognized global brands were unable to achieve their company goals because the company really didn’t understand the customer taste and preference. Anheuser-Bush entry into China was in 1993 through 5% participation to the capital of Tsingtao brewery, the internationally renowned Chinese brewer based on the East coast and later in February 1995, through a $140 Million acquisition of 80% stake in Zhongde Brewery, a large brewery in Wuhan, in Hubei province, eastern China. The company produced its global brand “Budweiser” in Wuhan and engaged a massive advertising campaign to build the name as a premium brand all over China. The results were not as expected due to the fragmented nature of the market, the severe competitive rivalry in the crowded premium segments and the difficult logistical problems in transportation, warehousing and distribution. The market share of Anheuser-Bush in China in 2003 was around 1%. Finally, we outline three major strategies that AB could follow: market development, horizontal integration, and transnational strategy. Of these...
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...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 | ...
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...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...
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...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 perceived as of low quality. Apart from that, there were logistical, servicing and duty issues as well for...
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...environment of automobile industry in the People’s Republic of China in terms of political, legal, economic, and cultural and ethical traditions. Political 1. Encourage the Automobile Industry Development Policies Having struck by the world-wide financial crisis, the global automobile market currently is facing severe situations. In order to revive the automobile market, the State Department decides to reduce the vehicle purchase tax. This policy will play a major role in raising automobile consumption market while effectively encourage automobile purchase, expanding domestic demands as well as facilitating the steady and rapid development of domestic automobile industry. 2. China’s Road Construction Policy In order to maintain the automobile market to develop, the government enhances plans to provide priority to the construction of express highways and accelerating the construction of the National Express Highway. The ministry is also promoting the integration of unconnected roads. Legal 1. Legal provision relating to environmental population by automobiles and safety measures. 2. Intentions on harmonizing the regulatory standards with the rest of the world. Economic 1. Rapid Development of Economy The economy of the People’s Republic of China(PRC) is the second largest in the world, after the United States. China is the world’s fastest-growing major economy, with consistent growth rates of around 10 percent over the past 30 years. China is also the largest...
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...Articles 1. „Launch a New Car Brand in China, Whether You Like It Or Not“ How Government Officials Push Auto Marketers to Add 'Indigenous' Brands. Mike Dunne, 12.04.2011, http://adage.com/article/global-news/china-officials-push-car-makers-add-indigenous-brands/226949/ 2.China's motor industry - Stepping on the gas Apr 24th 2012, 8:33 by P.C. http://www.economist.com/node/21553327 Articles Asia and South-America are the most rapidly developing regions in the world. With the biggest population – China – still being #2 in the biggest economy ranking, but they are gaining up and pretty soon are going to be at top place. Therefore that region is full of opportunities and that’s why it is attractive for enterpreneurs and corporations. But where are opportunities, there are threats and weaknessess as well (SWOT). At this time the car industry in China is mainly held by well-known car producers. They are co-operating slightly with local enterpreneurs and corporations, but the brandname and the intellectual rights are only theirs. General Motors (joint with SAIC-GM-Wuling), Honda (joint with Guangzhou Automobile Group Co) and Nissan are the exceptions. By now Volkswagen, Hyundai and Toyota are also creating and expanding joint ventures. And there are lots of others going to do the same. The logic behind this is simple – China wants, that on their local market they would have local, not international brands. That’s the reason to pressurize big brands to create joint ventures...
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...Introduction The Automobile Industry registered a 30% increase over the past ten years. This industry plays a significant role in every major market around the globe. In 2012 63,069,541 cars were produced globally, close to 9 million workers were involved nonstop in the manufacturing process of these vehicles and their respective parts; 25% of these cars were built in China alone, in other words 1 in 4 vehicles are manufactured there. This is equivalent to 5% of the globe’s manufacturing sector. For every direct job in this industry at least 4 indirect jobs in the vicinity are created; this is equivalent to more than 40 million jobs worldwide. Jobs in industries such as steel, iron, aluminum, glass, plastics, glass, carpeting, textiles, computer chips, and rubber are some examples of jobs created indirectly by the Automobile Industry. Environmental Scanning of Current Conditions China assembled 25% of the world’s cars in 2012, keep in mind that this is 7 million more cars than Japan (second largest car manufacturer in the world). Its industry growth has been mainly motivated by business friendly policies created by the government, increase in domestic demand, and an emerging middle class. Although this industry has grown lately, it continues to remain dreadfully divided. Furthermore, government officials believe that surplus volume must come to a halt and worry about local government departments impairing the economy due to unrestrained expansions. Therefore, they are aiming...
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...In conclusion, Proton should analyze more on their consumers or even carry out a better research on the consumers nowadays. They should come out with a strategy of market their products. For the economic situation, their currently doing better than before, but they would have to put in much more effort to win people’s heart as Malaysia’s number one car brand. Here are a few more suggestions for myself for proton to improve. First they should hire a professional from automobile industry to give them an advance training on their innovation and designing to win people’s heart. At the same time improve the services in every Proton outlet for the consumers that had already purchase Proton to enjoy after buying services better than other automobile industry. Besides that, proton could go in other fields like giving out sponsorships to people who need them to increase Proton’s fame to create a better brand image. Lastly, use better materials to produce Proton’s automobile to create a better quality of vehicle and make Proton the best car company in Malaysia. 5.0 REFERENCES 1. Retrieved from http://www.themalaysianinsider.com/sideviews/article/protons-problems-lie-in-drbs-hands-maxmonster-analytics, (accessed 2015) 2. Lee W. L. (2012). “Syed Mokhtar’s Proton win raises concerns over wealth concentration.” Retrieved from http://www.tindakmalaysia.com/showthread.php/4347-Finance-DRB-Hicom-takes-over-Proton 3. William Y. (2015). “Proton is dying and Dr. M as a chairman is...
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...PhD. Bengt Kjellen Master’s thesis in International Business 15 ECTS Department of Economics and Informatics University West Spring term 2010 ABSTRACT Over the past two decades, the open-door of the market supply in China has had a massive impact on the automotive market. This development contributes to the globalization of the automobile industry that involved the integration of the Chinese domestic market into the international markets. Among many reasons, motivation to gain access to industrialized markets and to gain access to superior technology, management resources and knowledge are the most driving factors of the Chinese automotive industry for the internationalization and going abroad strategy of China´s automotive industry. This study investigated whether different external globalization drivers and internal organization factors have differential effects on various dimensions of China´s automakers firms’ global strategy. Most of the studies written about global strategies have implemented only either of the internal or the external drivers of the internationalization of the firms. The contribution of the paper introduces a more comprehensive model on the global expansion of a firm. This paper concludes that China´s automotive industry has some competitive advantages such as low cost, while, facing a number of challenges that hinder the internationalization of Chinese automobile companies. It also shows that multiple factors play an important role in firms'...
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...of Passenger Cars in Metropolitan China 1. Executive SUMMARY We found that there is a great potential demand in the family car market of China, cars that sell for under RMB 100, 000 yuan each enjoy the greatest popularity, and price is the main factor that directly influences consumer decision to buy. It is therefore necessary to reduce the price of cars. For this, we recommend that the manufacturing costs be reduced and, step by step, the average price of a family car be lowered to around RMB 50, 000 yuan in five years. 2. INTRODUCTION 1) Purpose This report has been drawn up to look into the necessity of reducing the prices of cars and to recommend suggestions about how to achieve the price reduction objective. The purpose of this report is to look into the necessity and possibility of reducing prices in the family automobile industry in China, and to recommend feasible solutions to this proposition. 2) Background We conducted a questionnaire to generate data on public opinions (see appendices) of owning a family car. We looked into important parameters of Chinese consumers towards owning a car, such as income, housing, and affordability. Meanwhile, we considered the profitability of the passenger car manufacturing industry. Middling Company is one of the pioneer car companies in China, which was also one of the first joint venture players in the Chinese market. In 1983, … Ten years later, our first car manufactured in South China ... Moreover, our outputs and earnings...
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....Introduction: Background of Peugeot and Dongfeng : Peugeot is a major French car brand which is today part of PSA Peugeot Citroën. Peugeot's roots go back to bicycle manufacturing at the end of the 19th century. Its headquarters are located in Paris, avenue de la Grande Armée. Dongfeng Motor Corporation is a Chinese state-owned automobile manufacturer formerly known as China's "second car factory." It’s headquartered in Wuhan, China. Production and assembly of passenger cars, trucks, cars and car parts are the main business of Dongfeng. Traditionally one of the "Big Three" Chinese automakers, it is currently in the top four along with Chang'an Motors, FAW Group, and SAIC Motor. Collaboration background of Peugeot and Dongfeng: China starts opening domestic market to the foreign countries for the trading market access for technology. Finally, China sets up the Open-door policy- the China’s automobile industry was to establish Dino-foreign joint ventures (JVs) with foreign automakers to access foreign capital and technology and develop indigenous Chinese partners into self-sustaining, independent players. The purpose and the partnership of the collaboration: Dongfeng Motor and French counterpart PSA Peugeot Citroen cooperate for developing new car, the main purpose is to meet the rapid growing demand in Southeast Asia. They aim at double production and selling within three years of time. The global partnership of these two companies would eventually pave the way for exports...
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...The Emerging Technology of Autonomous Cars Name Institution The Emerging Technology of Autonomous Cars Introduction The autonomous car is a new and emerging technology that is transforming sedans in the automobile industry. An automatic car possesses the ability to change lanes automatically as it drives itself on the highway. There are car models such as Cadillac and Model S that possess the vehicle-to-vehicle technology with hands-off driving abilities. Such a driverless chauffeuring technology may seem an affront to those who love driving though technology is progressive and irrepressible. Since it is technology-oriented, it sparks mixed reactions among the car users on whether it is implementable or not and the challenges that accompany it. The Emerging Technology of Autonomous Cars The emergent of the autonomous cars in the automobile industry sparks mixed reactions among car users today. Some technology enthusiasts seem to welcome the idea as their ardent counterparts who love driving express skepticism. Autonomous cars have a number of benefits such as steer-by-wire, lane keeping, adaptive cruise control, and stability control. The cars can communicate with each other using vehicle-to-vehicle technology and with the infrastructure. With this technology, individuals who cannot drive will have a way to be mobile. Because of improved technology, many lives that perish on roads due to rampant...
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...Examen #1 1. Are the Chinese domestic vehicle producer’s strategies good enough to be implanted in another country? With this few arguments is very difficult to determine if the strategies used by the Chinese are good enough to be implemented in another country. What is true is that the automotive industry in China represents an extraordinary case of industry development. In recent years, China has become the world’s fastest growing automotive producer despite the global economic situation. the domestic Chinese auto industry has made substantial progress. Many independent domestic automotive manufacturers have emerged and have ambitions to make cars for developed countries. Although they have to overcome difficulties, such as creating their own designs and meeting world standards in terms of product quality, safety, and environmental features, the domestic manufacturers are expanding their market share and moving up the value chain. Moreover, among the leading vehicle producers, China has been the only one showing substantial and continuous growth in its production level. Apparently the quality of Chinese cars is good, because their price devaluation over the years is less than other car from another country, particularly American cars. People all over the world trust Chinese cars. With this being said, I think their strategies are good enough to be implemented in other countries. 2. What type of leader do they need to deal with such strategies? To deal with...
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...Shanghai General Motors The Asian market has been an attractive one for global corporations for many years and of late China has been the region’s crowned jewel of multi-national companies looking to drive revenue and earnings. Therefore, it is no surprise that General Motors saw significant importance in the Chinese market in the 1990s and as such made a concerted effort to penetrate the local automobile industry. But there are several specific reasons why GM found China attractive and as such aggressively pursued. The first, obvious reason is the high population of the country that is currently underserved from an automobile perspective. The country makes up 20% of the worlds’ population but only owns 1.5% of the worlds’ vehicles. The second reason is the high profit margin expected from the market. The Chinese automobile market had an average margin of 30%, while the global auto market was only 5%. The third reason is due to the limited existing competition. There was a limited mix of providers and competitors in the market – and they were not very strong. The final reason was the way the government managed the volume of new entrants. High tariffs and close management of how international corporations could engage meant that if GM could successfully enter the market, the competition would likely be manageable. General Motors took a joint venture approach with SAIC to enter the market, for reasons of benefit as well as government requirement – the latter reason...
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...Management and Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 6613208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2010, Tsinghua School of Economics and Management and Ivey Management Services Version: (A) 2010-04-27 tC In late April 2005, Jack Perkowski, chairman of ASIMCO Technologies, a company headquartered in China and supplying auto components for both Chinese and global customers, was in his office located in the bustling Chaoyang District of Beijing, pondering the next step that his company should take. Whatever the decision, it needed to be made soon, as the Chinese government’s upcoming and much stricter regulations on air pollution — caused by the rapidly increasing number of vehicles on the road — had been confirmed in the news. China’s National Standards III for Auto Emissions, which was dubbed Guo-san, literally “national three” in Mandarin Chinese, was to take effect on August 1, 2008. By that date, automakers would not be allowed, theoretically...
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