The Chinese Vehicles Industry is Driving West Prof. M. Fetscherin Prof. M. Sardy Rollins School Division of Worldwide Bu - PowerPoint PPT Presentation

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The Chinese Vehicles Industry is Driving West Prof. M. Fetscherin Prof. M. Sardy Rollins School Division of Worldwide Bu PowerPoint Presentation
The Chinese Vehicles Industry is Driving West Prof. M. Fetscherin Prof. M. Sardy Rollins School Division of Worldwide Bu

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The Chinese Vehicles Industry is Driving West Prof. M. Fetscherin Prof. M. Sardy Rollins School Division of Worldwide Bu

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  1. The Chinese Automobile Industry is Driving West Prof. M. Fetscherin Prof. M. Sardy Rollins College Department of International Business

  2. Chinese Cars Years Ago…

  3. …Today They Have Small Cars…

  4. …Sports Cars…

  5. … SUV and Sedans

  6. Agenda • Introduction • Players, power, partnership • First move going global and challenges • Footprint Japanese or South Korean • Chinese auto makers and takers • Strategic options • Conclusion

  7. Introduction • 2005 first Chinese auto companies appeared in global 500 • SAIC with sales USD 12.4 bn • FAW with sales USD 14.5 bn • Production of 6 million in 2006, > German • Third largest auto market • Fragmented market 120 producers, 12 major • Small local manufacturers • Large national with JV

  8. Players, Power…. • 50th anniversary, but infancy • Liberalization of trade policy, import taxes • Key Players

  9. …and Partnership • Two types of Chinese automotive companies

  10. Production Chery production

  11. Parallels to Japan and South Korea

  12. First Move Going Global • Exporting introduction stage (PLC) • In 2003, Honda produces cars to export to Europe and Asian markets • In 2005, 170,000 vehicles exported • Asia, Africa, South America, Europe • Trucks (60%) • Chinese domestic brands

  13. Key Challenges • Currency risk, import restriction • Processes • Lack of sales • Distribution, and • After sales • Product • Quality issue (e.g., safety, environment standards) • Brand How do customers value Chinese cars compared to competitors?

  14. Value Map EXAMPLES • Some SUV

  15. Auto Makers and Takers • Passenger car sales vs. Number JV • Importance of JV? • More JV, more sales? • Importance of building own brand?

  16. Brand Matrix • Passenger car sales (own brand) vs. JV • Extracting sales under own brand • Matrix with 4 categories • Each specific characteristics

  17. Example Rover SAIC has launched its first own-brand car based on technology from the defunct British carmaker Rover.The introduction of the "Roewe 750" (the name means "glory and authority" in Chinese) will be based on Rover 75 technology purchased from BMW.

  18. Conclusions • Domestically, China third biggest auto market • Internationally, Chinese brands are exporting, in introduction phase PLC • Quality issue can be solve • Brand one key challenge • Consumer perception key • Parallels to Japan and South Korea • Independent more likely to export soon

  19. Thank you