Chrysler Joint Venture in China: A Case Study

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Chrysler: Joint venture in China Virtually every major international automotive company has prioritized China as a desirable market, given China's relatively untapped base of consumers. Although Chinese car ownership has experienced a dramatic increase in the past decade, many consumers have yet to purchase their first vehicle or desire to purchase a second vehicle. To better position itself within China, Chrysler is considering a joint venture with several major Chinese auto firms. Dongfeng Automobile Company is one potential partner. Dongfeng specializes in "the development, design, manufacture and sales of Dongfeng series of light commercial cars and Dongfeng Cummins series of diesel motors" (Welcome, 2012, Dongfeng). It has deemed to be in the interest of Chinese automobile manufacturers to engage in such a merger, given "the army of Chinese manufacturers, many of them regional players propped up or partly owned by local governments, is leaving a legacy of wasteful investments in excess capacity, while frustrating Beijing's plans to build up a few national champions that could compete globally" (No shotgun weddings for China autos, despite slowdown, 2008, Reuters). Although sales of automobiles remain relatively strong in China, Chinese manufacturers have been beset by charges of poor quality, and American manufacturers are the preference of most middle class Chinese automotive consumers. One reason GM is doing so well in China is because of the Chinese appetite

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