edf40wrjww2CF_PaperMaster:Desc
Main: “Auto makers set up in Asia as West wobbles” Reuters - Apr 20, 2008
http://www.reuters.com/article/businessNews/idUSPEK22785620080420?pageNumber=3&virtualBrandChannel=10005
Supporting: “Chrysler seeks partner for China, says talks progress” Reuters - Apr 20, 2008
http://www.reuters.com/article/idUSPEK26355120080420?virtualBrandChannel=10005&pageNumber=1
"I say this internally all the time, but the company that gets China right is going to be the
dominant player for the next 25 years,"
Rick Wagoner (GM & CEO, GM)
___________
Chinese government regulation requires foreign OEMs to enter in joint venture with domestic
car companies in order to produce cars in China. As a result, non-Chinese OEM’s are fighting for
capacity and relationship with domestic car makers in order to get their brand established first.
Ford - Changan Automotive Group
GM - Shanghai Automotive Industry Corp. (SAIC)
Chrysler - Chery Automobile Co.
Fiat - Nanjing Automobile/ Chery Automobile Co.
Behind the background of a stagnating US economy, we want to analyze the advantages and
disadvantages of a Leader in(to) the Chinese car market.
Framework used:
The Leaders (Dis) Advantage [Coughlan, P.J., HBS, 2002]
First mover advantages First mover disadvantages
Economies of scales & scope: high volume, same
platform for multiple cars - Dodge Caravan, Chrysler
Minivan example
Demand Uncertainty: While projections are
good – they are still projections.
Network, Learning Effects (!): Creating a
reliable dealer and supplier network, Learning
effects – e.g. workforce, regulatory environment)
Pioneering Costs: Education of suppliers &
workforc ...