scholarly journals THE EMERGENCE OF THE AUTOMOTIVE INDUSTRY IN CHINA

2021 ◽  
Author(s):  
Olga Krause ◽  
◽  
Nadiya Golda ◽  
Iryna Pinyak ◽  
◽  
...  
Keyword(s):  
Automotive Industry ◽  
Automobile Industry ◽  
Economies Of Scale ◽  
Joint Venture ◽  
Developed Countries ◽  
Engineering Industry ◽  
General Motors ◽  
Small Range ◽  
Foreign Companies ◽  
Car Market

The engineering industry, including the automotive industry, belongs to the strategic branches of the country’s economy and to a large extent determines the level of development. The Chinese automobile industry dates back to 1953, and the first automobile factory, the First Automobile Works (FAW), was started in Beijing. Over the next few years, several more car factories were established in Nanjing, Khanhai, Jinan and Beijing. The requirements of funds, technologies and automotive modernization stimulated the attraction of external investment. A number of restrictive measures have been adopted to curb external competition, reduce car imports and attract innovative technologies, including high tariff and non-tariff barriers, screening, and restrictions on foreign capital, Limiting market share to foreign companies. When signing the joint-venture agreement, the Chinese side insisted on technology transfer and subordination to the Chinese leadership. Volkswagen first built a car factory in China. Today almost every progressive car company is represented in the Chinese car market, such as Mercedes-Bens, Ford, General Motors, Suzuki, Daihatsu, Honda, Subaru, Citreon, Toyota. Most of them have partnerships with one of China’s top three car manufacturers. American, European, and Japanese automakers see China as a promising market as demand for vehicles in the US and Europe shrinks. To the Chinese automobile market, the cars are made according to the requirements of the local consumer – conservative, with high-quality design, low and middle price segment. Since 2009, foreign automobile companies have accounted for 85% of the Chinese car market. About 60% of the cars sold in China are locally produced. However, China’s automobile industry is highly fragmented and mostly consists of small companies that produce a small range of components. Such production is labour-intensive with relatively low use of advanced technologies compared to car manufacturers in developed countries, often lacking economies of scale. Research expenditure accounts for a large part of the expenditure structure. Most companies produce low-tech parts with significant import presence.

Chang'an Automobile and the Chinese automotive industry

2011 ◽  
Vol 1 (4) ◽  
pp. 1-30 ◽  
Author(s):  
Michael Roberto ◽  
Grace Chun Guo ◽  
Crystal X. Jiang
Keyword(s):  
Automotive Industry ◽  
Economies Of Scale ◽  
Joint Venture ◽  
Central Government ◽  
Emerging Market ◽  
Auto Industry ◽  
High Growth ◽  
Foreign Firms ◽  
Content Type ◽  
The Usa

TitleChang'an Automobile and the Chinese automotive industry.Subject areaInternational businessStudy level/applicabilityUndergraduate/graduate/executive education.Case overviewChina has become the world's largest producer of automobiles, surpassing the USA and Japan. The Chinese auto industry differs quite significantly from those countries though. While the industry exhibits a substantial degree of concentration in the USA and Japan in early 2011, it remained highly fragmented in China. The Chinese Central Government had announced a desire for consolidation, yet it remained unclear whether a significant shakeout would occur in the near term.Like many Chinese automakers, Chang'an partnered with well‐known global auto makers to develop, produce, and distribute its products. In the coming years, Chang'an hoped to develop more independence from its foreign partners, including the production and distribution of self‐branded cars. However, the company grappled with how it could strive for independence while managing its existing joint ventures. Executives worried too about how to compete with foreign automakers who had achieved global economies of scale.The case provides a rich description of the evolution of the Chinese auto industry, and it documents how the Chinese industry differs from other global markets. Readers can analyze the extent to which they believe scale economies provide foreign firms an advantage over smaller Chinese rivals, and they can evaluate the conventional wisdom regarding the industry's minimum efficient scale. The case also provides a detailed account of Chang'an's rise to prominence. The case concludes by offering an in‐depth description of the firm's key rivals, and it presents the key questions being considered by Chang'an executives in 2011.Expected learning outcomesEnables students to examine how and why an industry's structure can differ substantially across geographic markets. Enables students to examine whether the need to achieve economies of scale may cause substantial consolidation in the Chinese auto industry. Provides an opportunity to evaluate the pros and cons of the joint venture strategies employed in China. Provides an opportunity to examine how a relatively small firm can position itself against large multinationals in a high‐growth emerging market.Supplementary materialsTeaching notes.

Russian car market must wait for economy to improve

2015 ◽  
Keyword(s):  
Foreign Investment ◽  
General Motors ◽  
Consumer Spending ◽  
Content Type ◽  
Car Industry ◽  
Corporate Strategies ◽  
Foreign Companies ◽  
The Past ◽  
Car Market ◽  
Economic Slowdown

Subject The Russian car market. Significance The car industry has undergone enormous changes, with foreign companies at the forefront of the transformation. Foreign involvement has risen over the past decade as policies promoting localisation of production attracted foreign investment. However, Russia's economic slowdown has led to some companies -- most notably General Motors (GM) -- announcing a reduction in their Russian operations. Over the last few months, other major Western brands have also reduced production in Russia. Russia's bleak economic prospects may cause other companies to replicate GM's policies, as a slowdown in consumer spending could cause the market to shrink further. Impacts Some manufacturers' decisions to halt production in Russia will cause some local unemployment. However, volumes of foreign production in Russia's will remain high -- companies that stay may benefit from enhanced market share. Some companies have placed Russia at the centre of their wider corporate strategies and will be reluctant to leave.

Leveraging Technological Capabilities across Polarized Cultures: Shanghai Delco Electronics Limited

2006 ◽  
Vol 10 (01) ◽  
pp. 27-54
Author(s):  
Lucy A. Ojode
Keyword(s):  
Automotive Industry ◽  
Joint Venture ◽  
New Technology ◽  
General Motors ◽  
International Joint Venture ◽  
Instrument Cluster ◽  
General Motor ◽  
Implementation Challenges ◽  
Automotive Systems ◽  
The Government

Rallying its units for an impending spin-off from General Motors, the Delphi Automotive Systems division cleared the Delphi Delco Electronics (Delphi-D) unit to begin planning for entry into China in 1994. Delphi saw China as ideal for leveraging its technological and innovation capabilities as well as the enormous General Motor heritage and reputation from years of experience delivering quality products to the automotive industry. Delphi-D found a perfect partner in Shanghai Changjiang YiBiao Factory (SCY) (name disguised to protect the firms) that held nearly 50% of the Chinese automobile instrument cluster market. SCY was keen on acquiring new technology to meet increasingly sophisticated customer demands in order to retain market lead as well as to tap into the international market. After rounds of negotiation the two firms formed a fifty-fifty joint venture, Shanghai Delco Electronics Ltd. (SDE) in August 1996. However, SDE started experiencing problems almost immediately. The Delphi-D team at SDE assumed their SCY counterparts would willingly integrate proposed technology and the requisite processes at the joint venture. However, the SCY team resisted prescriptions from the Delphi-D team that they sometimes perceived as "haughty". Broiled in culturally-loaded misunderstanding in a market that was becoming complex by the day as the government legislated new regulations and other manufacturers jostled for a piece of the market, SDE's management sought focus by developing a five-year plan that captured the partners' goals in 1998. However, as the end of 2002 approached, SDE's five-year plan remained largely unrealized. This case shows how implementation challenges can affect the realization of joint venture objectives and illustrates specific challenges that can mar even a well-formulated technology intensive international joint venture strategy.

Can Maruti Suzuki’s wagonr steer through the repositioning drive?

2021 ◽  
Vol 11 (4) ◽  
pp. 1-26
Author(s):  
Komal Nagar
Keyword(s):  
Automobile Industry ◽  
Joint Venture ◽  
Brand Management ◽  
Passenger Vehicle ◽  
It Use ◽  
Content Type ◽  
Analytical Skills ◽  
Academic Level ◽  
Car Market ◽  
Market Leader

Case overview Maruti Suzuki India Limited (MSIL), a joint venture between Maruti Udyog Limited, India and Suzuki Motors, Japan, is considering repositioning its WagonR brand amidst issues of overall decline in sales in the automobile industry. With a market share of more than 53%, MSIL is the market leader in passenger vehicle segment in India, yet it is facing difficulties in driving up sales. The company’s portfolio comprises entry-hatch, mid-hatch, premium-hatch, sedan, SUV/MUV, crossover and van. The case dilemma involves the decision that MSIL’s management should take for the repositioning of WagonR, a compact hatchback, at a time when the automobile industry is showing no signs of recovery. Is it opportune to reposition WagonR, given the current situation of the passenger car market in India? If yes, what can MSIL learn from its past positioning efforts and how can it use insights about consumers’ current perceptions of WagonR’s brand image to arrive at a repositioning decision? Leaning objectives Using the case will help address the following objectives: to expose students to the challenges of repositioning an established brand; appreciate the need for and importance of repositioning established brands; evaluate existing positioning and market conditions for making a sound decision; and develop analytical skills that will prepare them to make decisions in real business scenarios. Complexity academic level The study is suitable for Masters level students in courses on Marketing Management, but it can also work well in elective courses such as brand management. Supplementary materials Teaching notes are available for educators only. Subject code CSS 8: Marketing.

Technology Acquisition in Korea’s Automobile Industry

2018 ◽  
Vol 17 (4) ◽  
pp. 408-428
Author(s):  
Ga Hyung Kim ◽  
Jai S. Mah
Keyword(s):  
Automobile Industry ◽  
Direct Investment ◽  
Joint Venture ◽  
Early Stage ◽  
General Motors ◽  
Technology Licensing ◽  
Technology Acquisition ◽  
Production Technologies ◽  
The Government ◽  
Gain Access

Abstract The automobile industry developed very rapidly in Korea from the mid-1970s onwards. In the early stage of its development, it used both foreign direct investment (FDI) inflows and technology licensing contracts to utilize advanced foreign technologies. The government mainly preferred technology licensing to FDI inflows to gain access to production technologies. A specific case of FDI is displayed in the joint venture between General Motors and Daewoo Motors. Although there were several improvements and assistances provided to the latter, its performance was relatively unsatisfactory. In contrast, Hyundai Motors relied on technology licensing, which turned out to be successful. Korea’s experience of technology acquisition in the automobile industry shows that for a developing country considering development of its own automobile industry, it would be beneficial to utilize technology licensing rather than FDI inflows.

The Impact of the Sanctions and Crisis on the Automotive Industry in Russia

2016 ◽  
Vol 4 (5) ◽  
pp. 54-58
Author(s):  
Сабери ◽  
Behzad Saberi
Keyword(s):  
Automotive Industry ◽  
Automobile Industry ◽  
Technological Capabilities ◽  
Russian Market ◽  
Car Market ◽  
The Social ◽  
Vehicle Production ◽  
National Industry ◽  
The Impact ◽  
Final Consumer

In many countries auto industry is a strategic sector of the economy, representing, together with related industries and supporting part of the national industry, providing employment and implementing the technological capabilities of the country. The present study focuses on the description of the impact of sanctions on the development of the crisis, the automobile industry, car manufacturers and the market of cars of Russia. As a result, US and EU sanctions against Russia among the first to pass the sanctions hit the country´s automotive industry. During the period of sanctions Russian car market is characterized by falling sales and reduced production. Sanctions crisis has affected the entire chain from production to bring the car to the final consumer — the drop in demand for cars in the domestic market and reduction of vehicle production; the decline in production was achieved by the suspension or closure of plants, which affected the social sphere, increasing unemployment and reducing the incomes of workers and automotive professionals. Thus, the article examines the impact of the sanctions impact of the crisis on the enterprise on production of cars, as well as trade in cars in the Russian market.

In Search for Consolidation: The Political Economy of Industrial Restructuring in China's Automobile Industry

2009 ◽  
Vol 12 (2) ◽  
pp. 151-175
Author(s):  
Khan-Pyo Lee
Keyword(s):  
Automotive Industry ◽  
Automobile Industry ◽  
Economies Of Scale ◽  
Industrial Structure ◽  
Economic Effect ◽  
Firm Level ◽  
Reform Era ◽  
Enterprise Groups ◽  
China's Automobile Industry ◽  
Capital Intensive

This paper, through examining the emergence and evolution of industrial structure in China's automotive industry, have attempted to assess the degree to which the country has succeeded in restructuring the overly fragmented and dispersed pattern of industrial organization in a capital-intensive industry featured by high economies of scale, the loss in economic efficiency due to fragmented structure of which is therefore greater. The result of the analyses shows that the fragmented industrial structure that emerged during the Cultural Revolution period, populated by numerous firms of sub-optimal scale that are scatted in all but a few regions of the vast country, have not only persisted throughout the reform era but in fact has become more fragmented both in terms of lower concentration ratios at firm level and greater geographical dispersal of production. Although there exist some signs of gradual progress in consolidation at the level of enterprise groups, the real economic effect of such restructuring, however, seems to be quite limited due to the lack of effective coordination and integration of operation between affiliate automakers nominally under umbrella of the same group.

scholarly journals Mastering the Production of Electric Vehicles as One of the Modern Instruments for the Development of the Iranian Automotive Industry

2021 ◽  
Vol 4 (4) ◽  
Author(s):  
Behzad Saberi ◽  
Morteza Heydari
Keyword(s):  
Everyday Life ◽  
Electric Vehicles ◽  
Automotive Industry ◽  
Automobile Industry ◽  
Internal Combustion Engines ◽  
Internal Combustion ◽  
Combustion Engines ◽  
Promising Direction ◽  
Foreign Companies

The article analyzes the problems of introducing electric vehicles, as wellas their difference from cars with internal combustion engines. This type oftransport has long been included in our everyday life. Today, in the era ofthe heyday of technology, a person understands that cars with an internalcombustion engine (ICE) are almost on the edge of their existence. Atpresent, the development of the production of electric vehicles should beconsidered as a promising direction of the Iranian automobile industry. Atthe moment, this market in Iran is not yet occupied by foreign companies,and therefore national companies have a chance to use the strategy of“growth together with the market”.

Noordin Sopite, Chew Lay See and Lim Siang Jin (eds.). ASI:.""AN at the OOSSToads: Obstacles, Options and Opportunities in Economic Cooperatjon. Malaysia: Institute of Strategic and International Studies (ISIS) 1987.577 pp.Price: (hardbound edition) USS 25.

1988 ◽  
Vol 27 (2) ◽  
pp. 219-222
Author(s):  
Khwaja Sarmad
Keyword(s):  
Economies Of Scale ◽  
Joint Venture ◽  
Main Concern ◽  
International Studies ◽  
Industrialized Countries ◽  
Preferential Trade ◽  
Governmental Organization ◽  
Asean Member ◽  
Long Time ◽  
Preferential Trading Arrangements

The Association of Southeast Asian Nations (ASEAN) was established In 1967 as a loosely structured inter-governmental organization, which provided a framework for discussing problems that required a regional solution. For a long time, the reduction of regional political tensions remained the main concern of ASEAN. Serious efforts towards promoting intra-regional co-operation began in 1976 with emphasis on trade liberalization and industrial co-operation. But apart from a few cases, involving the regional economies and collective external bargaining, the record of economic co-operation has been poor, because of different levels of economic development of the member countries, mutually competitive exports.. inward• looking industrial policies and heavy dependence on the industrialized countries for investment, technology and trade. So far, there have been only three intra-ASEAN agreements to promote market sharing and a pooling of resources: the preferential trade arrangements, the industrial complementation agreement, designed to develop links in certain industries to achieve greater economies of scale, and the industrial joint venture agreement, which provides preferential treatment for products of joint ventures involving the companies of at least two ASEAN member countries. However the joint venture scheme has had only limited success because of delays in implementation, while the scope of the preferential trading arrangements has been limited by the consensus approach in solving outstanding issues and by the concern of higher-tariff member countries to protect domestic production and employment. As a result, tariffs have been reduced only on intra-regional trade of selected non-sensitive items. Most of the items covered in the preferential trade agreements have low trade content and minimal trade potential. The arrangements have also been difficult to manage because of problems of administering the rules of origin.

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