Case: IB-91 Date: 09/24/08
HYUNDAI MOTOR COMPANY IN CHINA
At the turn of the twenty-first century, Korea‟s Hyundai Motor Company (HMC) announced ambitious plans to become a global leader in the automotive industry, and established plants in various parts of the world, including Europe, India, and North America. In 2002, HMC turned its attention to China, one of the world‟s largest and fastest-growing economies. China‟s burgeoning demand for automobiles was forecast to become the world‟s third-largest―even as the worldwide auto market was stagnating. In this light, HMC had selected China to be site of its largest, lowest-cost assembly and manufacturing base. So it was that HMC created a separate China Business Division to lead its move
…show more content…
According to Kim, in 2008: The China automobile market has become fiercely competitive, with no company as the dominant market leader. Every automaker in the market has introduced their latest models in an attempt to attain successful market dominance. The excess supply of automobiles in the market has become a worrisome issue as the market entrants have flooded the market with cars. As competition intensified, in 2007 Beijing Hyundai experienced a decline in sales compared to the prior year (Exhibit 3), and by 2008 a full-blown price war in China involved many of the world‟s major automakers. In response, in 2008 Beijing Hyundai launched its second plant in China, along with new plants in India and Russia to complete a global production network across Korea, the U.S, China, India, and Europe. Yung Yu Koo, deputy general manager at China Business Group of HMC, described the thinking at Beijing Hyundai: We are always thinking ahead as to how Beijing Hyundai can achieve sustainable competitive advantages over other major competitors. We continuously revisit forecasts of the future growth of the China automobile market to see what effect this will have in Beijing Hyundai‟s market share both in the short and long term. The first phase of achieving HMC‟s global competitiveness was obtaining production and research capabilities, and the second phase is switching to a market-focused strategy by enhancing marketing skills. While this can be a difficult task, it is not
Honda has continued to embrace the changes that happen around its operations to ensure sustainability and profitability. The current global motorcycle manufacturing sector is full of competition. It, therefore, becomes crucial for every manufacturer to evaluate their strengths and weaknesses and then identify the opportunities to exploit to gain competitive advantage. Honda is Japanese based automobile company; it has numerous subsidiaries in Asia, Europe, and North America. Due to the advancements in technology, Honda will be required to make use of the latest technological trends to stay competitive. The business level strategy at Honda is in line with its enterprise and corporate strategy. The corporation also conducts Research and
Business 's are the most crucial factor to the Australian economy. Without them, the economy would not be. Their core purpose is to meet the ever-growing demands of consumers, both nationally and internationally, through the production of goods and services. The business this report will be focusing on, which not only operates in Australia but in various countries around the world, most notably; New Zealand, however, also with a slowly expanding market-share in both Asia and the Middle East is the Holden/General Motors group, a well established Australian car manufacturing company, in which holds one of the top market shares for the car industry in Australia.
General Motors is an inescapable organization in the United States that contributes heavily to the wealth of the U.S economy. Well known for the assembling of auto parts, trucks and cars also Finance and insurance is one of the occupied areas of general motors. Considering their SWOT analysis is very essential to identify its Strengths, Weaknesses, Opportunities and Threats for a continuous growth.
us that are old, enough to remember how the Big 3 automakers almost collapsed back in the late 70's, early 80's, the world was made aware of the troubles in these plants. The autoworkers seemed to be sucking the companies dry with their extravagant labor agreements, while their levity, quality and design of their product was lackluster. The oil embargo that OPEC orchestrated also revealed a problem with U.S. automakers, they were unwilling to adapt to the changing environment around them. Meanwhile the Japanese automakers were busy making fuel-efficient, smaller, less expensive vehicles; the Big 3 resisted this change with their very fiber. They continued to crank out their muscle cars, and their gas-guzzlers. Consumers lost confidence in the U.S. automobile and quickly switched to the cheaper more fuel-efficient Japanese models.
USA, UK and Europe. However, the demand has been rising steadily in India and China – both the world’s fastest growing economies. Thanks to Shanghai GM, a successful joint venture with the Chinese company SAIC, GM’s sales in China increased by 68 percent to 230,048 vehicles in
The Auto Industry in the United States has flourished ever since it’s revolution in the early 1900s. “Although the blueprint for the modern automobile was perfected in Germany and France in the late 1800s, Americans dominated the industry in the first half of the twentieth century. Henry Ford innovated mass-production techniques that became standard, with Ford, General Motors and Chrysler emerging as the “Big Three” auto companies by the 1920s (Foner & Garraty 1991).” Henry Ford’s focus was to produce an automobile that could be accepted by middle class Americans. The American automobile industry is subject to global competition like any other industry. As stated earlier, the automobile was first perfected in Germany and France. In 1995, the United States and Japan made a trade agreement that provided more dealer outlets and allowed easier replacement part selling in each other’s countries (Nauss 1995). This makes auto parts and auto-replacement parts for Japanese cars easier to access in the United States and vice versa. Not only does this provide for more US jobs, but it also provides for more Japanese jobs in the auto industry (Nauss 1995)! But furthermore, it increases the global competition. “Japanese automotive manufacturers include Toyota, Honda, Daihatsu, Nissan, Suzuki, Mazda, Mitsubishi, Subaru, Isuzu, Kawasaki, Yamaha, and Mitsuoka. Cars designed in Japan have won the European Car of the Year, International Car of the Year, and World Car of the Year awards many
After a self-satisfied period, American auto manufacturers encountered formidable competition from the Japanese (the most intense competitor, holding a combined U.S market share of approximately 25%) & German manufacturers. American market share was lost to these foreign brands as a result of better gas mileage, attractive design features & affordability provided by these foreign entities. Consequently, U.S car sales struggled in the European market while these foreign auto makers established production facilities & or expanded their already existing facilities (the Japanese manufacturers) in the U.S. Japanese manufacturers have instituted innovative productions by modifying U.S. manufacturing models, adapting & utilizing technology. Even so, the U.S. have merged with & established strategic commercial partnerships with other
The current business model for auto manufacturers is to locate their assembly plants as close to the market as possible. As such, most manufacturers have plants located regionally near the countries they are selling and marketing their vehicles. The hard and soft costs associated with transporting large shipments of vehicles around the globe (time in transit as well as the cost of moving the goods) means foreign automotive manufacturers must build their vehicles in the U.S. if they are to be competitive. (Coffin, 2013)
After a one-year long and difficult negotiation, on March28 2010, the China Geely Group went where no Chinese auto firm has gone before, buying a luxury car brand, Volvo, for $1.8billion from Ford, including the 100% shareholder and the relevant assets. It was China's largest overseas automotive industry acquisition, which was also the first wholly-owned merger. Besides, it was the first time for a Chinese own brand to merge a luxury brand. This deal proved to be a most ambitious action for the Chinese automaker’s desire to transform itself into an international auto player and wrote a new chapter for the Chinese automotive industry.
Global COMPETITION in the industry: Global competition has expended in the auto industry because of an increase in global trade. This has resulted in the decline of sales in the American auto industry whilst sales in the Asian industry especially China has increased. In 2009 sales in the U.S. hit their lowest point meanwhile, it doubled in Asia generally, especially in China. (loc.gov. 2014). One of the reason for this decline in the American Auto sales is because the Japanese automakers have altered the U.S. manufacturing models and are selling it in the global market at a less expensive rate. The price and innovation is attracting a lot of customers’ to this part of the world leaving the American industry to suffer.
At the beginning of twenty centuries until now the American auto industry has been growing and in demand. Henry Ford innovated mass-production techniques that became standard, with Ford, General Motors and Chrysler emerges as the “Big Three” auto companies by the 1920s. Manufacturers funneled their resources to the military during World War II, and afterward automobile production in Europe and Japan soared to meet demand. Once vital to the expansion of American urban centers, the industry had become a shared global enterprise with the rise of Japan as the leading automaker by 1980. And Americans dominated the industry in the first half of the twentieth century. Hence, from the
In 1913, Henry Ford revolutionized product manufacturing by introducing the first assembly line to the automotive industry. Ford’s hallmark of achievement proved to be a key competence for the motor company as the low cost of the Model T attracted a broader, new range of prospective car-owners. However, after many decades of success, customers have become harder to find. Due to relatively new threats to the industry, increasing numbers of cars and trucks are parked in dealer lots and showrooms creating an alarming trend of stagnation and profit erosion. Foreign-based automakers, such as Toyota and Honda, have expanded operations onto domestic shores and, in turn, have wrestled
The United States Automotive industry has been dominated by five major auto manufacturers: GM, Toyota, Ford, Chrysler, and Honda. As globalization increases the domestic automotive market (GM, Ford, Chrysler) suffers from foreign competitors. Although with high entrance barriers the market suffers little to none from new entries. There are several reasons for this the largest being capital. It takes a lot of capital to obtain manufacturing plants, raw materials, as well as to hire and train employees. PASTEL Analysis
The main strength of the Geely Automotive Holdings, Ltd. is their focused research and development initiatives. They invest roughly “10% of their annual sales revenue (which is significant when compared to Toyota’s 5% investment)” in research and development and focus much of their company’s efforts on their Geely Automobile Research School and the Geely Engine Research School (Dess, Lumpkin, and Eisner, 2010). These schools allow them to make improvements pertaining to gas efficiency (a huge competitive advantage in the U.S. and European markets), the meeting of EPA standards, design innovation, as well as feature innovations. These are all important things to consider for any company in the automotive
The Chinese automobile market has grown by 1/3. This means that there is a lot more room for automobile companies like Honda to expand and grow. Honda will be able to increase its production and sales as the market will be bigger.