After apprenticeships for foreign automakers for about 10 years, some of China's large state-owned auto companies are trying to accelerate their slightly new overseas expansion. This strategy will threaten their attractive cooperation with foreign companies in China. relationship. At least one Chinese company has mentioned the gearing of global expansion. It is the world’s two largest automotive heads Volkswagen AG and General Motors Corp.’s partner in China – Shanghai Automotive Industry (Group) ) The company (Shanghai Automotive Industry Corp., referred to as SAIC Group). SAIC Group has already started cooperation negotiations with British sports car manufacturer MG Rover Group Ltd. This month, it announced plans to acquire Ssangyong Motor Co., the fourth-largest automaker in South Korea, and it could become the first Chinese automaker to acquire foreign automakers. SAIC also intends to spend $250 million to promote its own brand. According to investment bankers, it plans to start a $1.5 billion global offering early next year. The management personnel of other auto companies in China have also proposed similar goals of exploring the international market and building their own brands. Ford Motor Co.'s Chongqing-based Changan Automobile Group set up a research institute in Italy last year and hired European car designers to help develop its own brand. The smooth appearance of the CM8 minivan is a result. Like Dongfeng Motor Co., Dongfeng Motor Co., which is expected to list overseas early next year, aims to increase the company's global visibility. Although Dongfeng Motor has established joint ventures with several foreign car companies, it expressed its hope to expand truck exports and eventually sell its own car brands overseas. The company is now producing a "little prince" in a tiny, unremarkable car. Dongfeng Motor spokesman Chen Yun said that we hope to fully develop the Dongfeng brand and make him known all over the world. Chinese auto companies are struggling to expand space for their overseas projects, and some have warned that even if these moves do not turn partners into competitors, they will make the partnership even more tense. The marriage between domestic and foreign auto makers is a dazzling scene in the Chinese auto boom. However, most companies still have not experienced the test of strategic transformation and market reversal. Michael Dunne, president of consultancy Group Automotive Resources Asia in Shanghai, said, “These actions in the Chinese auto industry are structural and the contradictions between the two parties are inevitable. I see no other way to go.†Since the early 1980s, the Chinese government has developed the auto industry through the hands of numerous joint ventures. Beijing has arranged many marriages of this type of auto manufacturing, which will allow large investments by foreign companies and the transfer of advanced technologies as exchange conditions for access to the Chinese market. Chinese companies usually provide the labor force, shun political relations, and link the DNA-like auto parts supply chain. According to Chinese law, foreign capital owns half of the ownership of the joint venture, which means that they must contribute 50%. Although some of the initial conditions for cooperation were notoriously harsh, such as the cooperation between American Motors Corp. and Beijing Automotive Works. However, current managers often emphasize that the current conditions for cooperation are very friendly. In private, few foreign companies are keen to talk about the overseas expansion of Chinese partners. Many companies are still at a critical juncture in the fastest-growing automobile market in the world. An executive from the Dongfeng Motor and Nissan Motor Co. joint venture said that Dongfeng Motor could not sell cars overseas in the short term. He believes that the global ambitions of Chinese auto makers are just nice to say. There are political factors behind this trend in Chinese auto companies. After China’s economy has grown at a double-digit rate for 20 years, foreigners are still familiar with Chinese brands. Chinese leaders are concerned about this. Some people see the domestic auto industry as a barometer of whether large Chinese companies can go it alone in the international arena. These companies have learned foreign technology and Western marketing methods. Correspondingly, the Chinese government has extended its preferential treatment to foreign investors. According to China’s new automobile policy, foreign investment in research facilities that are dedicated to the development of China’s own automobile brands will be tax deductible. The "China Auto News", which is in charge of the People's Daily, wrote in an editorial in January that we must care for and support the self-development of China's auto companies. This is extremely important in the economic globalization. With automakers introducing new models and investing billions of dollars in expanding production, overseas markets also seem to be a haven for shunning domestic fierce competition. In the first seven months of this year, the sales growth rate of Chinese cars remained at a strong level of 27%, but it slowed down significantly compared with the 75% increase of the whole year last year. In order to boost sales, many automakers have lowered prices, many of which have cut prices significantly. SAIC's overseas plans are the most daring. The company plans to produce 50,000 private-label cars in the next three years, although it produced only less than 3,000 private-owned cars in 2003, and none of them were in cars. Xiao Guopu, vice president of SAIC Group, said that by 2010, SAIC hopes to rank among the top ten automakers in the world. A spokesman for SAIC Group declined to estimate the company’s current ranking. By selling the brand cars of both Volkswagen and General Motors, SAIC Motors already has a solid economic strength to achieve this goal. Volkswagen and GM rank among the top in the Chinese auto market. SAIC executives have said that the initiative to develop its own brand actually includes the acquisition of other companies. In June, SAIC announced that it was negotiating with Rover to establish a strategic partnership, the latter being the manufacturer of the MG sports car. Although the details of this potential cooperation were not disclosed, according to people familiar with the SAIC Group plan, the company’s goal is to manufacture its own cars in China. A spokesman for SAIC Group Xue Hao declined to comment on the negotiations with Rover. SAIC Motor’s plan to acquire South Korea’s Ssangyong Motors is another measure to upgrade its independent brand and enhance its professional manufacturing technology. Ssangyong Motors owns Mercedes’s license to car technology. The ambitions of SAIC Group may place foreign partners in a more subtle situation. Both Volkswagen and General Motors have formed joint ventures with SAIC, so SAIC actually competes with both companies in China. GM has tried to expand its partnership with SAIC to overseas, including SAIC Group joining a consortium two years ago to acquire South Korea’s Daewoo Motor Co. However, it is not uncommon for auto industry partners to counteract enmity. In 1992, after Daewoo Automobile learned how to build a sedan based on the common Opel model, it and GM’s seven-year marriage came to an end. Today, one of the few independent brands in the SAIC Group has a Sabre light truck. The licensed technology used in this truck sold in Europe comes from GM's Opel. According to Ashvin Chotai, head of Asian automotive research at consulting group Global Insight, “They are using their own technology to nurture their competitors.†A GM executive in Shanghai refused to publish SAIC’s long-term strategy Comments, but she said the company believes that SAIC Group recognizes that the success of the two companies in China is closely related to the success of their joint ventures. Shanghai Volkswagen did not respond to the reporter’s question. However, it may not be an easy task for China's state-owned auto companies to leave. Most companies not only rely heavily on the technology and brand of foreign companies, they also rely on the challenge of resisting the smaller Chinese private auto companies. Unlike these sensitive private car companies, large-scale state-owned auto companies appear to be lackluster in manufacturing their own-brand cars. Dunne of Automotive Resources Asia said, “They have got a lot of water in politics, but when it comes to rolling up their sleeves and contaminating their hands to make cars, the state-owned companies are still unable to do so.â€
Chinese auto companies go abroad for development
After apprenticeships for foreign automakers for about 10 years, some of China's large state-owned auto companies are trying to accelerate their slightly new overseas expansion. This strategy will threaten their attractive cooperation with foreign companies in China. relationship. At least one Chinese company has mentioned the gearing of global expansion. It is the world’s two largest automotive heads Volkswagen AG and General Motors Corp.’s partner in China – Shanghai Automotive Industry (Group) ) The company (Shanghai Automotive Industry Corp., referred to as SAIC Group). SAIC Group has already started cooperation negotiations with British sports car manufacturer MG Rover Group Ltd. This month, it announced plans to acquire Ssangyong Motor Co., the fourth-largest automaker in South Korea, and it could become the first Chinese automaker to acquire foreign automakers. SAIC also intends to spend $250 million to promote its own brand. According to investment bankers, it plans to start a $1.5 billion global offering early next year. The management personnel of other auto companies in China have also proposed similar goals of exploring the international market and building their own brands. Ford Motor Co.'s Chongqing-based Changan Automobile Group set up a research institute in Italy last year and hired European car designers to help develop its own brand. The smooth appearance of the CM8 minivan is a result. Like Dongfeng Motor Co., Dongfeng Motor Co., which is expected to list overseas early next year, aims to increase the company's global visibility. Although Dongfeng Motor has established joint ventures with several foreign car companies, it expressed its hope to expand truck exports and eventually sell its own car brands overseas. The company is now producing a "little prince" in a tiny, unremarkable car. Dongfeng Motor spokesman Chen Yun said that we hope to fully develop the Dongfeng brand and make him known all over the world. Chinese auto companies are struggling to expand space for their overseas projects, and some have warned that even if these moves do not turn partners into competitors, they will make the partnership even more tense. The marriage between domestic and foreign auto makers is a dazzling scene in the Chinese auto boom. However, most companies still have not experienced the test of strategic transformation and market reversal. Michael Dunne, president of consultancy Group Automotive Resources Asia in Shanghai, said, “These actions in the Chinese auto industry are structural and the contradictions between the two parties are inevitable. I see no other way to go.†Since the early 1980s, the Chinese government has developed the auto industry through the hands of numerous joint ventures. Beijing has arranged many marriages of this type of auto manufacturing, which will allow large investments by foreign companies and the transfer of advanced technologies as exchange conditions for access to the Chinese market. Chinese companies usually provide the labor force, shun political relations, and link the DNA-like auto parts supply chain. According to Chinese law, foreign capital owns half of the ownership of the joint venture, which means that they must contribute 50%. Although some of the initial conditions for cooperation were notoriously harsh, such as the cooperation between American Motors Corp. and Beijing Automotive Works. However, current managers often emphasize that the current conditions for cooperation are very friendly. In private, few foreign companies are keen to talk about the overseas expansion of Chinese partners. Many companies are still at a critical juncture in the fastest-growing automobile market in the world. An executive from the Dongfeng Motor and Nissan Motor Co. joint venture said that Dongfeng Motor could not sell cars overseas in the short term. He believes that the global ambitions of Chinese auto makers are just nice to say. There are political factors behind this trend in Chinese auto companies. After China’s economy has grown at a double-digit rate for 20 years, foreigners are still familiar with Chinese brands. Chinese leaders are concerned about this. Some people see the domestic auto industry as a barometer of whether large Chinese companies can go it alone in the international arena. These companies have learned foreign technology and Western marketing methods. Correspondingly, the Chinese government has extended its preferential treatment to foreign investors. According to China’s new automobile policy, foreign investment in research facilities that are dedicated to the development of China’s own automobile brands will be tax deductible. The "China Auto News", which is in charge of the People's Daily, wrote in an editorial in January that we must care for and support the self-development of China's auto companies. This is extremely important in the economic globalization. With automakers introducing new models and investing billions of dollars in expanding production, overseas markets also seem to be a haven for shunning domestic fierce competition. In the first seven months of this year, the sales growth rate of Chinese cars remained at a strong level of 27%, but it slowed down significantly compared with the 75% increase of the whole year last year. In order to boost sales, many automakers have lowered prices, many of which have cut prices significantly. SAIC's overseas plans are the most daring. The company plans to produce 50,000 private-label cars in the next three years, although it produced only less than 3,000 private-owned cars in 2003, and none of them were in cars. Xiao Guopu, vice president of SAIC Group, said that by 2010, SAIC hopes to rank among the top ten automakers in the world. A spokesman for SAIC Group declined to estimate the company’s current ranking. By selling the brand cars of both Volkswagen and General Motors, SAIC Motors already has a solid economic strength to achieve this goal. Volkswagen and GM rank among the top in the Chinese auto market. SAIC executives have said that the initiative to develop its own brand actually includes the acquisition of other companies. In June, SAIC announced that it was negotiating with Rover to establish a strategic partnership, the latter being the manufacturer of the MG sports car. Although the details of this potential cooperation were not disclosed, according to people familiar with the SAIC Group plan, the company’s goal is to manufacture its own cars in China. A spokesman for SAIC Group Xue Hao declined to comment on the negotiations with Rover. SAIC Motor’s plan to acquire South Korea’s Ssangyong Motors is another measure to upgrade its independent brand and enhance its professional manufacturing technology. Ssangyong Motors owns Mercedes’s license to car technology. The ambitions of SAIC Group may place foreign partners in a more subtle situation. Both Volkswagen and General Motors have formed joint ventures with SAIC, so SAIC actually competes with both companies in China. GM has tried to expand its partnership with SAIC to overseas, including SAIC Group joining a consortium two years ago to acquire South Korea’s Daewoo Motor Co. However, it is not uncommon for auto industry partners to counteract enmity. In 1992, after Daewoo Automobile learned how to build a sedan based on the common Opel model, it and GM’s seven-year marriage came to an end. Today, one of the few independent brands in the SAIC Group has a Sabre light truck. The licensed technology used in this truck sold in Europe comes from GM's Opel. According to Ashvin Chotai, head of Asian automotive research at consulting group Global Insight, “They are using their own technology to nurture their competitors.†A GM executive in Shanghai refused to publish SAIC’s long-term strategy Comments, but she said the company believes that SAIC Group recognizes that the success of the two companies in China is closely related to the success of their joint ventures. Shanghai Volkswagen did not respond to the reporter’s question. However, it may not be an easy task for China's state-owned auto companies to leave. Most companies not only rely heavily on the technology and brand of foreign companies, they also rely on the challenge of resisting the smaller Chinese private auto companies. Unlike these sensitive private car companies, large-scale state-owned auto companies appear to be lackluster in manufacturing their own-brand cars. Dunne of Automotive Resources Asia said, “They have got a lot of water in politics, but when it comes to rolling up their sleeves and contaminating their hands to make cars, the state-owned companies are still unable to do so.â€