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Strategies of German Car Companies in China von Schrott, Patrick (eBook)

  • Erscheinungsdatum: 01.02.2014
  • Verlag: Anchor Academic Publishing
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Strategies of German Car Companies in China

In 2009, the PRC overtook the USA as the biggest automotive market in the world in production as well as in sales. With economic problems like stagnating real income, rising raw material prices and credit-driven consumerism in the industrial countries the importance of the Chinese market for car companies will even grow. Saturated passenger car markets in the USA and Western Europe and low rates of motorization in new automotive markets like China focus the attention of the market participants on these new, growing markets. The focus of this study is on the passenger vehicle market and lines out why the Chinese market is profitable and attractive for international manufacturers. Moreover, it shows how to deal with the problems and how to use the opportunities regarding the dimensions of internationalization. Firstly, the PEST-Analysis of the Chinese automobile market lines out the political-legal, economic, socio-cultural and technological factors. In such a rapidly changing and growing as well as culturally completely different country like the PRC, the framework conditions and circumstances are of big importance for foreign enterprises willing to do business there. The third chapter deals with possible internationalization strategies for China by showing possibilities of timing and market development strategies plus options for locating business markets. This is also further established in the fourth chapter, in which the internationalization strategies of two German enterprises are analyzed. Furthermore the fourth chapter analyses the internationalization strategies of VW and BMW. At the end of this thesis, the results are summarized in two SWOT-analyses of both firms including measures on how to deal with threats in the PRC and on how to benefit from strengths and opportunities. Patrick Schrott, B.A., was born in 1989 in Lohr, Germany. In 2013 he successfully completed his studies with a Bachelor of Arts in Business Management at the University of Applied Sciences in Aschaffenburg. During his studies he gathered extensive work ex


    Format: PDF
    Kopierschutz: none
    Seitenzahl: 87
    Erscheinungsdatum: 01.02.2014
    Sprache: Englisch
    ISBN: 9783954895861
    Verlag: Anchor Academic Publishing
    Größe: 5312 kBytes
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Strategies of German Car Companies in China

Text Sample: Chapter 2.4, Technological Factors: Especially for a technical-based industry, the framework and infrastructure are of big importance. The technological conditions are strongly influenced by environmental problems, the society and government expects the car manufacturers to respond to this trend. To become 'greener' the participants on the whole market in the PRC invest in the R&D sector. At last, with more and more automobiles in the PRC, the infrastructure has to be adapted. 2.4.1, Technological Trends - The Chinese E-Mobility Programme: In the context of the leading position of the industrialised countries in combustion engines, increasing oil and energy prices, environmental pollution and carbon dioxide legislation, the PRC decided to put the focus on the research and development of Electric Mobility. Especially with carbon dioxide emissions that were eight times higher than Germany's (figure 24) and the growing burden through the transportation sector. The fact that China is an automotive market in an earlier phase is good for sales of alternative fuel technologies because potential clients have no reservations about the new technology like in the Western countries. The head of states in the PRC fund these branches to become the technological leader in the segment of hybrid electric and electric automobiles. The regional proximity is a strategic advantage for the aims. The E-Mobility programme of the governance aims to boost the sales of environmental-friendly, efficient vehicles It creates incentives for alternative power automobiles with small cubic capacities, for instance. For all-electric cars people can get up to Yen 60,000 (?6,690) and for plug-in hybrids Yen 50,000 (?5,575). Secondly, scrapping premiums for old cars from Yen 5,000 (?560) to Yen 18,000 (?2,010) were introduced, depending on the age of the vehicle. At last, the government decided that drivers of small cubic vehicles get tax abatement: If the capacity is lower than 1.6 litres, they just have to pay 2.5% less. Besides the subsidy, in general the PRC has spent USD2.5bn in supportive measures like acquiring busses with electric engines for the public transportation and requirements like public charging points in 13 cities between 2009 and 2011. The number of cities was enlarged in 2010 to 20. The target is to have 30,000 electric vehicles on the roads in 2012. A list with the cities can be seen in the appendix (figure 25). Worldwide, the tendency will go from combustion engines towards more hybrid and pure electrical powertrains. In 2025, gasoline and diesel will still be the number one fuel but bio fuels, natural gas and particularly electricity will catch up: From 2010 to 2025 the share of E-cars will rise from under 1% to between 3% and 12%. The main driver of this will be the PRC. For innovative enterprises, like the German car manufacturers, the tendency to hybrid electric or electric powertrains normally should be a favourable circumstance and the premium car manufacturers seize on the trend: As described in 2.2.2, BMW created the brand 'Zhi Nuo' together with ist partner Brilliance. Even if 'Build Your Dreams' is a pioneer in the E-car segment, Daimler has already had ist first nightmare with ist partner as written in 2.2.2. VW wants to sell about 10,000 E-automobiles between 2014 and 2018, the subsidiary Audi will develop such a car based on the Audi 'A6L' with the Tongji University, too. In summary, the E-Mobility programme is auxiliary, particularly for innovative and creative companies like VW and BMW. 2.4.2, Research and Development Landscape: As a result of the demographic change, China can not only continue to be the world's extended workbench but has to strengthen the research and development area. The fundament of the new economy should be own High-Tech products instead of cheap items. The PRC uses three ways to achieve the required expertise. The first is to force foreign companies to find joint venture partners in

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