...The Growth of Independent Chinese Automotive Companies (Second Draft for Discussion) Jianxi Luo May 6, 2005 International Motor Vehicle Program, MIT Index 1 Overview of Current Chinese Automotive Industry……………1 2 The Burgeoning Independent Chinese Auto Companies………9 3 Case Study: Chery Automobile Company………………………14 3.1 Introduction………………………………………………………… 14 3.2 Characteristic Analysis…………………………………………….. 18 3.2.1 3.2.2 3.2.3 3.2.4 3.2.5 3.2.6 Technical Capabilities………………………………………………….18 Production Management……………………………………………….24 Product Characteristics……………………………………………….. 25 Intellectual Property…………………………………………………... 29 Exportation Strategies……………………………………………........33 Enterprise Culture…………………………………………………….. 36 3.3 Comparative Analysis ……………………………………………....36 4 Conclusions………………………………………………………. 42 References…………………………………………………………….47 1 Overview of Current Chinese Automotive Industry China’s first automobile manufacturing base, FAW (First Automobile Works), was built 50 years ago. From then on for over 30 years, there was no big progress in the Chinese automotive industry on both production and technology sides. Production capacity was low, and technology was outdated. From the middle 1980’s, with the establishments of joint ventures, the Chinese automobile industry began to develop faster than before. So far, all of the world's major automakers, such as General Motors, Toyota, Ford, Volkswagen, DaimlerChrysler, Nissan-Renault, PSA Peugeot Citroen,...
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...Case: R & D Electronics Company (Case adapted from: Heitger, L.E. and Heitger, D.L. (2008)., Issues in Accounting Education, 23(2), 261-272.) The Automotive Electronic Industry R & D Electronics Company is an established manufacturer and has been designing, manufacturing, and supplying electrical supplies in various forms to the automotive industry. The worldwide market for semiconductors in the automotive electronics industry exceeds $10 billion. In addition, wireless data delivery – currently is estimated to be a $20 billion industry, and experts predict that soon 50 percent of all new cars and 90 percent of higherend models will possess telematic-capable devices. Further, many experts estimate that 30 to 40 percent of the production value of all automobiles consist of electrical products. R & D Electronics historically has invested heavily in researching and developing auto-motive electronic technology in order to provide customers with state-of-the-art functionality, safety, and performance. R&D Electronics continues its heavy investment in this research and development arena because the resulting product features quickly devolve from being “cutting edge” features that create a competitive advantage to commodities that customers regard as standard features on all automobiles. R&D Electronics has continued to upgrade its research and development and manufacturing abilities to keep pace with changing technologies. For instance, R&D Electronics designs, produces, and installs...
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...RUSIA : A HUGE EMERGING CAR MARKET ISOLATED FROM OIL CRISIS High oil prices are causing pain for carmakers in America as people there are sacrificing their fancy for pick up trucks and sport-utility vehicles for more frugal small vehicles. In May 2008, General Motors announced a 30 percent fall in car sales, compared with a year earlier; Ford posted a 19 percent drop, and sales of its F-150 pick up fell behind Toyota’s Camry and Corolla for the first time. But far in Russia, the high oil price is powering expansion of the market rather than painful restructuring. Thanks to abundant natural resources, Russia has been witnessing a rising economy since decade ago. With nearly doubled and steadily rising real disposable income, cars are no longer unaffordable for many Russians. Currently, car ownership in Russia is still low at about 200 per 1000 people, compared with the over 500 in most of Western Europe and the around 800 in American (even in other former communist countries in Central Europe, the number is between 300 and 350). But the car market there is expanding : in 2007 Russia's sales of new cars grew 36 percent by volume and 57 percent by value; sales of passenger vehicles exceeded 2.7 million. According to analysts, Russia could out strip Germany as Europe’s biggest market by 2008, with sales reaching around 3.3 million; by 2012 Russians will be buying more than 5 million new cars a year, of which nearly 90 percent will be foreign brands. However, all of the growth has...
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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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...Competitive Strategies and Government Policies ECO/365 Competitive Strategies and Government Policies Change is inevitable. With all of the changes in the automotive industry over the years and the changes yet to come the Ford Motor Company needs to position itself in the market and embrace the changes. In 2013 Ford Motor Company had an outstanding year. Retail sales were up 14 percent and Ford is expecting 2014 to be another great year around the world. Ford is expecting to introduce 23 new vehicles to customers and open three new production plants worldwide. “Our strategy in Asia Pacific is to serve our customers with even more One Ford products, and to increase our capacity to provide these great products with manufacturing hubs in China, India and ASEAN,” said Dave Schoch, group vice president and president, Ford Asia Pacific” (Ford Motor Company, 2013). With these expectations there will need to be some changes to be monitored. The changes in the automotive industry can be broken down into the following areas. There are new companies entering the market, mergers and acquisitions and globalization that affect pricing and sustainability of profits. There are government policies and regulations, currently and in the future, that will affect the industry. With global competition there will be decisions made by management that will change the way we compete in the industry in the future. New Companies Entering Market Major issues to consider with the many companies...
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...Nour Shaker Supervisor: PhD. Jose Ferraz-Nunes Examiner: 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...
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...April TRAINING EXECUTIVE EXECUTIVE BUSINESS SIMULATION MARKET RESEARCH MARKET RESEARCH PACKAGE FOR THE EUROPEAN PASSENGER AUTOMOTIVE INDUSTRY 2009-2010 Release 9 MARKET RESEARCH MARKET RESEARCH PACKAGE FOR THE EUROPEAN CAR INDUSTRY THE EUROPEAN CAR MARKET The European motor industry is the world's largest car market, having exceeded the US market in total units sold (excluding light trucks). It is also an extremely competitive arena. Some of the patterns to emerge from this market over the last few years are listed below. 1. Sales Figures1 Historical and Current The last strong rise in sales was in 1998 (14.3m), continuing into 1999, however, in 2000 sales fell by 2.2% (14.7m) and stayed at this level in 2001. In 2002 sales fell by 3%, 2003 saw an increase of nearly 5% but this was a result of an expanding marketplace, in reality there was another fall of 1% when comparing sales in the same EU member countries. 2004 saw a genuine 2% increase in registrations, remained stable in 2005, showed a substantial 4% rise in 2006 but then the percentage increase dropped to 1% in 2007. In 2008 European car sales figures were easily the worst for over a decade: 14.6m in extended Europe, 13.6m in the core economies, a drop of 8.2% and 8.1% respectively over 2007 figures. Gloomy forecasts for 2009 proved to be well founded with the whole market falling by a further 0.7% to 14.5m, however, the market excluding the new EU countries did show a 0.7% improvement to 13.7m...
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...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 market. iii Acknowledgements There are many people that have offered me extraordinary support...
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...69TH ANNUAL REPORT 2013-14 04 WHAT’S INSIDE CORPORATE OVERVIEW STATUTORY REPORTS 02 Corporate Information 44 Notice 03 Mission, Vision and Values 53 Directors’ Report 04 Chairman’s Message 69 Management Discussion & Analysis 08 Board of Directors 104 Corporate Governance 12 Tata Motors at a Glance 14 Major Launches during the Year 125 Secretarial Audit Report Chairman’s Message 16 Presence across Markets To ensure long-term competitiveness of Tata Motors, the company also took several steps under the Horizonext strategy. FINANCIAL STATEMENTS 18 The NEXT Level in Design 20 The NEXT Level in Driving Experiences 22 The NEXT Level in Fuel Economy 14 24 The NEXT Level in Connectivity 26 Corporate Social Responsibility at Tata Motors Standalone Financial Statements 126 Independent Auditors’ Report 130 Balance Sheet 131 Statement of Profit and Loss 132 Cash Flow Statement 134 Notes to Accounts 30 Awards and Accolades 32 Financial Performance Our products represent the Horizonext philosophy with best-in-class offerings. 170 Independent Auditors’ Report 36 Summarised Balance Sheet and Statement of Profit and Loss (Consolidated) Major Launches during the Year Consolidated Financial Statements 172 Balance Sheet 38 Summarised Balance Sheet and Statement of Profit and Loss (Standalone) 40 Funds Flow - Last Five Years 41 Financial Statistics 173 Statement of Profit...
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...R e se a rc h a n d Stat i s t i c s B r a n c h working paper 16/2009 Impact of the Global Economic and Financial Crisis over the Automotive Industry in Developing Countries UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION RESEARCH AND STATISTICS BRANCH WORKING PAPER 16/2009 Impact of the Global Economic and Financial Crisis over the Automotive Industry in Developing Countries Peter Wad Copenhagen Business School UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Vienna, 2010 This paper was prepared by Peter Wad, UNIDO consultant and backstopped by Nobuya Haraguchi, UNIDO staff member, Research and Statistics Branch, Programme Coordination and Field Operations Division. Iguaraya Saavedra provided administrative support. The designations employed, descriptions and classifications of countries, and the presentation of the material in this report do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations Industrial Development Organization (UNIDO) concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries, or its economic system or degree of development. The views expressed in this paper do not necessarily reflect the views of the Secretariat of the UNIDO. The responsibility for opinions expressed rests solely with the authors, and publication does not constitute an endorsement by UNIDO. Although great care has...
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...69TH ANNUAL REPORT 2013-14 04 WHAT’S INSIDE CORPORATE OVERVIEW 02 Corporate Information 03 Mission, Vision and Values 04 Chairman’s Message 08 Board of Directors 12 Tata Motors at a Glance 14 Major Launches during the Year 16 Presence across Markets 18 The NEXT Level in Design 20 The NEXT Level in Driving Experiences 22 The NEXT Level in Fuel Economy 24 The NEXT Level in Connectivity 26 Corporate Social Responsibility at Tata Motors 30 Awards and Accolades 32 Financial Performance 36 Summarised Balance Sheet and Statement of Profit and Loss (Consolidated) STATUTORY REPORTS 44 Notice 53 Directors’ Report 69 Management Discussion & Analysis 104 Corporate Governance 125 Secretarial Audit Report Chairman’s Message To ensure long-term competitiveness of Tata Motors, the company also took several steps under the Horizonext strategy. FINANCIAL STATEMENTS Standalone Financial Statements 126 Independent Auditors’ Report 130 Balance Sheet 131 Statement of Profit and Loss 132 Cash Flow Statement 134 Notes to Accounts Consolidated Financial Statements 170 Independent Auditors’ Report 172 Balance Sheet 173 Statement of Profit and Loss 174 Cash Flow Statement 176 Notes to Accounts Subsidiary Companies 207 Financial Highlights 210 Listed Securities issued by Subsidiary Companies during FY 2013-14 14 Major Launches during the Year Our products represent the Horizonext philosophy with best-in-class offerings. 38 Summarised Balance Sheet and Statement of Profit and...
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...Proton: Its Rise, Fall, and Future Prospects For Dato’ Haji Syed Zainal Abidin Tahir (Syed Zainal, hereafter), Managing Director of Proton, recent headlines such as “Auto Sector Faces Numerous Challenges” and “European Carmakers Zoom in”[1] were simply reminders of the challenges his company faced. Proton had been troubled by its declining share of the domestic auto market (Exhibit 1) and consequent dwindling profits and margins. Without taking into account the government’s R&D grant in 2007/2008, the company suffered three straight years of losses from 2007 to 2010. Its finances recovered a little in 2009/2010, thanks to the government’s “cash for clunkers” incentive programme, a MYR143 million (USD48 million)[2] R&D grant from the government, and some improvement in sales. However, its net profit margin barely reached 3% — very low by industry standards — and most of its performance measures lagged behind those of the industry leaders (Exhibits 2 and 3). The stock price of Proton’s listed parent, Proton Holdings Berhad (Proton Holdings Limited), had been substantially lower than its net asset value for several years (Exhibit 3). Because of its low market to book ratio and the heavy government subsidies paid to Proton, Mr. Syed Zainal was under tremendous pressure to turn around Proton’s performance. Adding further pressure, the changing institutional environment had exposed Proton’s inability to compete. Since 2005 when the government committed to reducing import tariffs...
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...Foreign 99 Chapter III Direct investment by China in Latin America and the Caribbean A. Introduction Since 2008, China has become one of the world’s largest sources of direct investment. These flows first reached significant levels in Latin America in 2010, when it is estimated they surpassed US$ 15 billion. Chinese companies have in fact burst on the scene in the region so recently that several of the biggest projects were still being finalized in early 2011, or had only just been put into operation. Most investments have been made in natural resource extraction, but over the medium term this is expected to diversify into other sectors such as manufacturing and infrastructure construction. Paradoxically, there is a lack of data on this extremely important phenomenon, which poses a constant problem for policymakers and analysts studying Chinese foreign direct investment (FDI). Appraisals of the possible opportunities and challenges presented by this increased investment flow therefore tend to lack supporting empirical evidence. The aim of this chapter is to make some progress on this issue, at least as far as investment in the region is concerned. A variety of sources have been consulted, including investment announcements in the media and interviews with Chinese company managers and Latin American and Caribbean government authorities. Despite the evident limitations of this kind of material in terms of data quality and reliability, this course of action does provide...
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...CONTENTS CORPORATE OVERVIEW (1-31) Board of Directors Senior Management Corporate Information Chairman’s Statement Designed to Deliver Product Range Global Presence Milestones Winners From Tata Motors Customer Satisfaction Green Mobility Human Resources Corporate Social Responsibility FINANCIAL HIGHLIGHTS (32-45) Pace in Performance Summarised Balance Sheet and Statement of Profit and Loss (Standalone & Consolidated) Fund Flow Statement Subsidiary Companies: Financial Highlights Financial Statistics STATUTORY REPORTS (46-122) Notice Directors’ Report Management Discussion and Analysis Report on Corporate Governance Awards and Achievements FINANCIALS Standalone Financials (123-168) Auditors’ Report Balance Sheet Profit and Loss Statement Cash Flow Statement Notes to Accounts Consolidated Financials (169-206) Auditors’ Report Balance Sheet Profit and Loss Statement Cash Flow Statement Notes to Accounts Attendance Slip and Proxy Form ANNUAL GENERAL MEETING Date: Friday, August 10, 2012 Time: 3.00 p.m. Venue: Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg, Mumbai 400 020. 2 6 7 8 12 14 16 18 20 22 24 26 28 Tata Motors began operations in 1945. Since that time, we have remained committed to our values and our stakeholders. We have maintained a consistent focus on strengthening our organisation, and expanding our presence. Today, through our subsidiaries and associate companies, we already operate in the UK, South Korea, Thailand, Spain and South Africa. Our forays...
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...A Case Study of the Acquisition of Swedish Volvo by Chinese Geely Author: Lieke Wang Supervisor: Thomas Danborg Master's Thesis in Business Administration, MBA programme February 2011 Abstract The acquisition of the famous Swedish Volvo by the unknown Chinese Geely has attracted a lot of attention in the world-wide medias, particularly in Sweden and China. It is the largest overseas acquisition ever by a Chinese company, which marks a beginning of a new era that the fastest growing China has become a superpower in the world economy. Because this acquisition is such a complex business where two involved companies are so much different, it is of high interest to make a case study of this in the business research area. The thesis begins the study by looking at the basic facts of these two companies: the products, market, finance situation, brand and technology, etc. It was found that these two companies have very little in similarity, but a huge difference in product segment, technology and brand, inter-culture, language, etc. Therefore, there is no immediate cost saving through the integration of two companies and the sharing of the common components, which indicates that the risk of failure of this acquisition is relatively big. However, there do exist some opportunities lying ahead. The most obvious opportunity is the possible rapid expansion in the growing Chinese market as Volvo’s second home market. To be successful in China, Volvo must address several issues: quickly...
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