• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

China's Automobile Industry. The rapid growth of the automobile market in China has attracted more multinational firms to enter.

Extracts from this document...

Introduction

China's Automobile Industry Although the local government has been actively promoting, in the 1980's China's automobile industry is not an attractive, nor a powerful market. It was relatively small in size. There is a lack of domestic demand, cars are not the major transportation used by the locals, rather it was a privilege for a small number of high-ranking officials. Most vehicles are trucks, and China was only beginning to allow taxi services. Also, there are only a limited number of worthy local firms that can be taken as partners. However, as the economy of China rises, the local's income and living standard upgrades. Creating a vast number of demands for private cars. Furthermore, the Chinese government has shaped their policy to improve their economy through growth of automobile and infrastructure industry. ...read more.

Middle

in China. They are able to take advantage of the scarcity of high-quality vehicles, the persistence of a seller's market and lack of competition in choosing local partners, which leads to a solid market position. However, their success is mostly because of their hard effort. They were proactive and were willing to share a big amount of resources (both financial and technical). Their interaction with the local government, providing help to some extent, plays a role in their success. VW is not afraid to go 'all out', as they even reinvest their profit to develop their production. However, another early entrant, Peugeot faced the opposite. Their failure is not due to lack of early entrant advantage, but rather to the lack of improvements. Their product was outdated, and even though they have generated high profits from selling CKD kits and parts, they did not try to develop their production (that has generated a lot of complaints). ...read more.

Conclusion

China has been successful in many other industries, and it has certainly promoted economic growth that leads to higher local living standards. Local demand for automobile will certainly keep on increasing, as the Chinese government keeps on developing the infrastructure to promote the use of cars (article 2). Not only that, they are making bullet trains inter-countries (China-Singapore) that will push further their economic growth (article 3). Tourism to China will increase, so will the locals income and the demand for transportations (including trains and boats). By being able to capture those potential demands, the benefits of this project will certainly outweigh the risks. Sources Article 1 - Ford's failure: http://www.chinadaily.com.cn/english/doc/2004-10/22/content_384782.htm Article 2 - Highway improvements: http://www.usatoday.com/news/world/2006-01-29-china-roads_x.htm Article 3 - Bullet Train: http://www.npr.org/2011/06/14/137111321/full-steam-ahead-for-chinas-rail-links-abroad Others: "COMPETING IN CHINA'S AUTOMOBILE INDUSTRY", by Qingjiu (Tom) Tao. GB2ECASETaoTomChinaAuto1001.pdf "THE PAST, PRESENT, AND FUTURE OF CHINA'S AUTOMOTIVE INDUSTRY", by Matthias Holweg. www-innovation.jbs.cam.ac.uk/publications/.../holweg_past.pdf "GLOBALIZATION OF THE AUTOMOBILE INDUSTRY IN CHINA", by Lin Gan www.cicero.uio.no/media/1381.pdf ?? ?? ?? ?? ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Management Studies section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Management Studies essays

  1. Marks & Spencer China

    .There is a constant war between the different traders. But this will only escalate because the foreign competition is becoming increasingly important and ferocious. Finally, there is another important point regarding the distribution networks. In fact, traditional traders already have their own suppliers and trust is installed.

  2. fiat & nanjing failure in joint-venture in china

    Every day is dedicated to a saint, this is what we call the saint's day. In China this custom does not exist but there are a lot of examples which do not exist in the Western society. For example, a gift means a request of help.

  1. McDonalds and KFC: Recipes for Success in China

    Their brand name and a vast majority of their operational processes and products were the same as those sold in international markets. However Kaufmann and Eroglu (1999) depict that the diversity of geographical environment exposes multinational organizations to diverse market conditions; therefore a common uniform framework across all geographical locations cannot work.

  2. Innovation For Business Success. It is possible to be innovative in both large ...

    This culture is quite new to Newcrest which has had a new lease on life from top to bottom in recent years, with turnover of its whole board, a new CEO and CFO, and new approaches to value creation through innovation that came with these.

  1. Influences of the Chinese macro environment on the past, present and future employment these ...

    Joint ventures were the preferred form of entry with $44 billion committed and $20.5 billion actually invested2. Further to this in 1992 in an ambition to stimulate export industries, the Chinese government removed even more restrictions to foreign direct investment (FDI).

  2. Reverse Logistics in the Chinese Auto Manufacturing Industry

    more demands about the environment, as the health is the most important things to the human beings. And the car may produce some poisonous gas, which should catch people's attentions as the time passed by. On the one hand, the government should make sure to provide the safe and healthy

  1. Starbucks Foundation and Growth

    This new company got success at its start and acquired Starbucks in 1987. In this way Starbucks became a corporation and Howard Schultz became CEO of Starbucks at the age of 34. Whereas; Baldwin, Bowker left Seattle and went to San Francisco for the purpose of joining Alfred Peet.

  2. Import/Export Economics of China

    Per capita the GDP breaks down to $8,400, up 16% from two years ago (Central Intelligence Agency). While there have been strong improvements in GDP this does not translate to money in pockets, rather the income distribution in China is worsening.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work