...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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...Radical and incremental innovation vs. Disruptive technology -Shashank Reddy Tummala Compare and contrast the Ford and BMW approach to the future of technology in the auto industry BMW and Ford have been the pioneers in automotive industry for over 100 years. They take the annually held Le Mans race very seriously. Le Mans race tests the endurance and efficiency of these car-makers in a grueling 24 hr race. The technology used to build these cars has dripped down from racing to daily and commercial use vehicles. The use of carbon fiber to build the chassis in F-150 and i3 is an example of interdivisional cross-platform strategy. F-150 and i3 are priced lower (approx $20.000-$40,000) than critically and commercially acclaimed Tesla cars, who effectively built and produced high performing electric vehicles into the market. This is a case of incremental innovation because these changes contributed to increase efficiency and lower the cost of the product. The process to build the BMW i3’s body using clip-on and plastic parts can effectively change the manufacturing and supply chain process in the automotive industry. The industry will be more automated than it currently is. The insurance companies’ willingness to accept these changes will give BMW first-mover advantage in the industry. This is an example of disruptive technology.BMW’s vast financial resources have helped BMW to enter mid-level segment and sustain the market turbulence initially.It was able to carve-out a market...
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...Corporate Finance FIN-325 I. General Overview General Motors, also known as (GM), is an American multinational corporation headquartered in Detroit, Michigan. General Motors was founded on September 16th, 1908 in Flint Michigan by William C. Durant as a holding company, or a wholly owned subsidiary for Buick. The company designs, manufactures, and distributes vehicles on all six major continents under 18 brand names. Some of their well-known brand names include Chevrolet, Buick, Cadillac, GMC, Opel, Vauxhall, Wuling, Baojun, and JieFang. GM also operated the brand names of Saturn, Pontiac, and Hummer until 2009. During this time, GM was emerging from chapter 11 bankruptcy as a result of the 2008 financial crisis, and decided to shed those brands for strategic reasons in order to compete with foreign emerging vehicle distributers in the market. In January 1912, the company decided to incorporate themselves under the GM brand name, and were the gold standard in the automobile industry for almost 80 years. From 1931-2007, GM successfully led global sales amongst every car manufacturer in the auto-manufacturing industry. Currently, the automobile industry is one of the most fierce industries in the market. Not only is GM competing with American car manufacturers such as Ford and Dodge, but also foreign companies such as Toyota, Honda, and Hyundai. II. Financial Statements (attached excel sheet) Anthony Brooks For: Professor Goncalves Corporate Finance FIN-325 Final...
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...Emerging markets Recent history The four BRICs The BRIC’s roller coaster. 2009 Sales dropped in 50%, stabilize in 2010 Annual growth of 15% per year through 2014 Russia China The largest one. Share in 53% in 2008 Share is expected to be 61% in 2014 Brazil The most mature and stable market. Probably remain the second largest to 2014 Outpace both Brazil and China in growth India Summary • • • • • • The 4 BRICs are different There is no standard BRIC car Brazilian favor sporty hatchback Russians – western sedans and SUV Indian seeks ultra-low-cost minicars China – affordable luxury style sedans Brazil • The largest South America’s largest economy • Population close to 200 mln • GDP per capita of US$ 10 300 • The rapid growth of China’s economy has dramatically increased export demand for Brazil’s raw materials Brazil, history • • • • 10 years ago was a less confident place Economic crisis, history of inflation Political disarray with deep structural problems Seemed destined to remain a country with a great unrealized potential Brazil now • Quiet optimism that the country has been set on a more stable path • Still high level of poverty and corruption • But a sense of underlying progress with evidence in official statistics • Incomes are up • The gap between Brazil’s rich and poor has closed a little Brazil now • Locals treat the improvements due to just departing president Luiz Iinacio Lula da Silva (ince 2002) • The country...
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...SAE TECHNICAL PAPER SERIES 2003-01-2307 A Comparative Study of the Production Applications of Hybrid Electric Powertrains Harry L. Husted Delphi Corporation Reprinted From: Hybrid Vehicle and Energy Storage Technologies (SP-1789) Future Transportation Technology Conference Costa Mesa, California June 23-25, 2003 400 Commonwealth Drive, Warrendale, PA 15096-0001 U.S.A. Tel: (724) 776-4841 Fax: (724) 776-5760 Web: www.sae.org All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of SAE. For permission and licensing requests contact: SAE Permissions 400 Commonwealth Drive Warrendale, PA 15096-0001-USA Email: permissions@sae.org Fax: 724-772-4891 Tel: 724-772-4028 For multiple print copies contact: SAE Customer Service Tel: 877-606-7323 (inside USA and Canada) Tel: 724-776-4970 (outside USA) Fax: 724-776-1615 Email: CustomerService@sae.org ISSN 0148-7191 Copyright © 2003 SAE International Positions and opinions advanced in this paper are those of the author(s) and not necessarily those of SAE. The author is solely responsible for the content of the paper. A process is available by which discussions will be printed with the paper if it is published in SAE Transactions. Persons wishing to submit papers to be considered for presentation or publication by SAE should send the manuscript...
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...Strategy for Success in a Hostile Marketplace Genesis of Saturn On a wintry day in Detroit, the CEO of General Motors (GM), Roger B. Smith (Smith) was about to make an announcement. Since he had taken over in 1981, ‘the cherubic chairman’ 1 of GM had already brought about big changes in reorganising GM’s lumbering organisation structure. He had invested in robotics, space satellites and data-processing for which he had bought over entire companies such as Ross Perot’s Electronic Data Systems and Hughes Aircraft Company when he could have just contracted their services. On January 8th 1985, Smith was unveiling Saturn, GM’s first new brand in 70 years. It was to be a lot more than just another car brand. At that time, Smith was famously quoted as stating, “Saturn is the key to GM’s long term competitiveness, survival and success as a domestic producer.”2 As an independent subsidiary that relied on innovative technology and was managed by the workers and management in a joint decision making format, its mission was to “develop and produce an American made small car that will be fully competitive with the best of imports……. (and) affirm that American ingenuity, American technology and American productivity can once again be the model and inspiration for the rest of the world.”3 In the early 1980s GM was still the biggest automaker. In the light of recession, GM was losing money for the first time. The import market increased from 13% to more than 24% between 1970 and...
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...Proceedings of the 2012 International Conference on Industrial Engineering and Operations Management Istanbul, Turkey, July 3 – 6, 2012 Car Recalls: A Problem Unique to Toyota or For All Car Makers? Kamrul Ahsan School of Management and Information Systems, Faculty of Business and Law Victoria University Australia Abstract Often automobile recalls are drawing media and public attention. Influenced by Toyota’s recent automobile recalls 2009-2010 this research conducts an empirical study on historical car recalls. The research uses secondary data from recall websites maintained by public and private organizations. For different car model year and manufacturer the study looks at frequency of recalls, recorded customer complaints, and yearly sales data. Analysis shows recalls are a common event with the majority of recalls initiated by only a few car makers. Though car makers use many eye catching and popular quality and customer care slogans and programs, many popular car makers still face valid customer complaints and consequently face many unwanted recalls. This study identifies that most recalls occur during the first five years of the car model year. This preliminary study of automobile recalls can be further extended at a later stage to identify key causes of recall. Keywords Product recalls, Reverse logistics, car recalls, product returns, closed loop supply chain 1. Introduction Though manufacturers use state-of-the-art operations philosophies, tools and techniques...
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...Transcript * 1. TOYOTA MOTOR MANUFACTURING INC. U.S.A Prepared By – Ashwin Mehta – 313 Pratik Mehta – 314 Ishaan Parekh – 315 Ankit shah – 317 Dishank Shah – 318 Fenil Shah - 319 * 2. Agenda Current Scenario Problems Faced Analysis Suggestions and recommendations Risks and contingencies * 3. Current Scenario • Toyota Motors Manufacturing (TMM) faces increasing problems with its seat supply. • Kentucky Framed Seat (KFS), is a single seat supplier for TMM. • KFS is responsible for the material flaws and missing parts as the major encountered defects. • These problems are increasingly occurring with an increase in varieties and demand for the seats. * 4. Problems Faced • Product proliferation problems with defective seats. • Company’s deviation from its normal production plan and lack of a recovery system. • Run ratio dropped from 95% to 85%. • This means 45 less cars were being produced per shift. • This translated in overtime of workers. • Too many cars needed off-line operations of one type or the another before they could go on shipping. * 5. Questions Raised • Will the sales company get cars on time as promised? • What does it mean to implement JIT and Jidoka principles to this situation? • Is TMM handling seat defects correctly on the line? • Is the current routine for handling seat-defect cars really a legitimate exception to TPS, or could it be a dangerous deviation from TPS? • Is there a way to kaizen TMM’s off-line routine? * 6. Analysis...
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...China’s Auto Sector Development and Policies: Issues and Implications Rachel Tang Analyst in Asian Affairs June 25, 2012 Congressional Research Service 7-5700 www.crs.gov R40924 CRS Report for Congress Prepared for Members and Committees of Congress China’s Auto Sector Development and Policies: Issues and Implications Summary The automobile industry, a key sector in China’s industrialization and modernization efforts, has been developing rapidly since the 1990s. In recent years, China has become the world’s largest automotive producer, with annual vehicle output of over 18 million units in 2011. China is now also the world’s biggest market for automobile sales. Meanwhile, China’s auto sector development and policies have caused concerns in the United States, from automotive trade, China’s failure to effectively enforce trade agreements and laws, to market barriers and government policies that increasingly favor Chinese manufacturers, which could affect business operations and prospects of international companies doing business in (or with) China. China’s auto industry has developed extensively through foreign direct investment, which has come in the form of alliances and joint ventures between international automobile manufacturers and Chinese partners. These international automobile manufacturers, who generally dominate the higher end of the Chinese market, have focused on making cars for China’s large and fastgrowing market. The domestic Chinese automakers, who...
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...From the rich walnut paneling and carved arches to the molded Italian Renaissance patterns on the ceiling, the circa 1925 council chamber room of Akron's municipal hall evokes a time when the America's manufacturing heartland was at the peak of its power. But when the U.S.-China Economic & Security Review Commission, a congressionally appointed panel, convened there on Sept. 23, it was not to discuss power but decline. One after another, economists, union officials, and small manufacturers took the microphone to describe the devastation Chinese competitors are inflicting on U.S. industries, from kitchenware and car tires to electronic circuit boards. These aren't stories of mundane sunset industries equipped with antiquated technology. David W. Johnson, CEO of 92-year-old Summitville Tiles Inc. in Summitville, Ohio, described how imports forced him to shut a state-of-the-art, $120 million tilemaking plant four football fields long, sending Summitville into Chapter 11 bankruptcy protection. Now, a tenfold surge in high-quality Chinese imports at "below our manufacturing costs" threatens to polish Summitville off. Makers of precision machine tools and plastic molds -- essential supports of America's industrial architecture -- told how their business has shrunk as home-appliance makers have shifted manufacturing from Ohio to China. Despite buying the best computer-controlled gear, Douglas S. Bartlett reported that at his Cary (Ill.)-based Bartlett Manufacturing Co., a maker of...
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...electric cars. Henry Ford built the first car in 1896, (Gale, 2003). and then revolutionized the industry when he invented the assembly line.(David Highfill, Matt Baki, Sean Copus, Matt Green, Jennifer Smith, Matt Whineland). This invention allowed mass production which lowered the costs of automobiles for consumers. The industry includes a number of car manufacturers competing with each other in their competitive priorities, and competitive capabilities to capture market share. The major players in the industry are, the big three US automakers, Ford Motor Company, DaimlerChrysler, and General Motors. The major Japanese players who are also a part of the US auto industry are Toyota, Nissan and Honda. Ford, Chrysler and GM account for approximately 76% of US passenger Vehicles, Toyota, Nissan and Honda, Subaru and Mitsubishi account for 18%. The European automakers, BMW and Mercedes makeup nearly 2%. (Global Foresight, Inc. 2006 Report on Industry Trends). Over the years several mergers and acquisitions occurred within the industry and contributed to this global view. Some of the mergers and acquisition are: Chrysler merging with Daimler-Benz, to form the new Daimler-Chrysler; and buying stake in Mazda, Mitsubishi and Hyundai, and Fiat merged with BMW and Mercedes and has formed an alliance with Daimler- Chrysler. Ford purchased Sweden’s Volvo, British Jaguar and luxury line Aston Martin. General Motors bought controlling stake in Isuzu,. These mergers would increase market...
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...and Judd state that the federal stimulus did not change the structure of the intergovernmental system, which requires cities to live within their revenue sources. The bail out of the auto industry was a targeted effort on the federal level to save a critical and important industry in the United States. At the time of the bailout, the auto industry contributed 3.6%, or $500 billion, to total U.S. GDP output (Amadeo, 2015). Some say the auto industry bailout was a political move because it was not really necessary. At the time of the bailout, many analysts felt that Chrysler would go bankrupt, even with a bailout, and Ford didn't really need it (Amadeo, 2015). Therefore, the main impact from the bailout was to save jobs at GM. However, the economic slowdown caused GM to slash its employment and production, whether it received a bailout or not (Amadeo, 2015). Once the recession was over the remaining United States auto...
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...Covering Fourth Quarter 2014 Volume 15, Number 1 San Diego Auto Outlook Comprehensive information on the San Diego County new vehicle market FORECAST Small Increase Predicted for County New Vehicle Market in ‘15 This year’s increase follows the 5.6% improvement in 2014; market is up 90% between ‘09 and ‘14! Forecasting automotive sales is a delicate balancing act. There are frequently conflicting indicators that can provide mixed signals on future market conditions. The trick is identifying these trends, separating the meaningful from the meaningless, and forming a consensus on where the market is headed. Below, we identify the key positive and negative forces that are likely to impact the market in 2015. Forces leading the market higher • Low interest rates and mild inflation growth have kept new vehicle affordability at historically strong levels. Many economists are expecting a slight increase in interest rates in 2015, but wages are likely to move higher and gas prices have fallen, which should give a boost to disposable incomes. • Payrolls grew steadily during 2014, and the majority of labor market economists are expecting this trend to continue in 2015. Employment levels have been posting impressive increases, while the unemployment rate is down considerably from the highs in 2009. Increasing employment is an obvious plus for new vehicle sales. • Pent up demand and benefits to “upgrade” should continue to give the market a boost. The...
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...SUVs, the Environment, Safety, and Stakeholders The Evolution and Devolution of the SUV Market In 1990, the SUV/Light truck market consisted of approximately 4 million units sold out of 14 million total vehicle sales in the United States. By 1999, the percentage of the total market had increased and total sales were higher. SUVs/light truck sales were 8.2 million of 16.4 million units sold.21 47.6 percent of Ford Motor Company's sales are of SUVs, primarily its Ford Explorer and larger Expedition, but also of its even larger Excursion. These vehicles took the place of the truck-like Bronco and smaller Bronco II. The largest players in the SUV market (with the number of units sold in 2000) are as follows: 22 [pic] In 1997, most auto manufacturers expanded their SUV offerings and entered the luxury SUV market. These SUVs, with prices around $50,000, featured in-vehicle televisions and VCRs, leather interiors, and all the amenities of luxury cars. The new market entrants are listed below: [pic] By 2000, the U.S. segment of the luxury SUV market was 80.5 percent.23 At that time, SUV purchases constituted one of every five auto sales in the United States and were the highest-margin products in all the automakers' lineups .24 Profits per SUV averaged $ 10,000 per unit. Profits on the Ford Excursion were at the top of the field at $18,000 per unit. At that time, SUVs comprised 20 percent of all of Ford's vehicle sales and accounted for the majority of Ford's...
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...but in order to make the profit, there needs to be standards that are in place to promote and sustain the consumer’s interest in ecology, ethics, and the economy. Specifically, business needs to be innovative and try to create their products with the minimal amount of environmental impact. In addition, the business needs to be liable for the ethical treatment of all employees including the employees of their suppliers and the sustainability of their suppliers. A company cannot claim to be sustainable and yet their suppliers are causing destruction to the environment or becoming wrapped up in ethical violations of their employees. The following will review the sustainability and ethical practices of two leading brands, General Motors (GM) and Nissan. General Motors is based out of Detroit, Michigan, and produces brands that include Chevrolet, Buick, GMC, Cadillac, and others. Nissan is headquartered in Nishi-ku, Yokohama, Japan. These two companies are fairly different in focus. General Motors relies heavily on truck sales while Nissan released a vehicle known as LEAF that is a zero-emission vehicle. Both companies are concerned for the environment but both push forward and grow in different ways. Examination of these two companies will measure sustainability success, environmental stewardship, sustainable consumerism, and other factors relating to production, supply chains, and other...
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