Why Do Japanese Companies Go for Joint Ventures in India

1230 Words Jul 1st, 2012 5 Pages
:: Secret to success of Indian partnership

Why do Japanese companies go for joint ventures in India?
IMM Jeong-Seong
Senior business analyst at the POSCO Research Institute

W development. hen it comes to technology, capital, management expertise, and global business experience, Japanese companies do not lag behind Korean ones. Still, they often seek partnerships with local firms when entering

the Indian market. Why? The president of Wipro, one of India’s largest information technology service companies, said, “If you want to make it in India, what you need is a

local partner.” It is difficult for a foreign company to take care of everything on its own, from market research, land purchase and logistics to market The
…show more content…
Being humble and trustworthy is important
The Japanese do not believe they can do business on their own in a country they barely know. They are confident that they can handle the areas in which they are strong, like technology and manufacturing, but assume that they need local partnerships to deal with the local market, government, labor management, custom, and other unfamiliar local features. Japanese companies, accustomed to keiretsu (grouping of enterprises), prioritize setting up business systems based on trust and strive to respect and depend on their Indian partners. Their efforts have paid off. Suzuki, for

075
Spring 2011� POSRI Chindia Quarterly

instance, used to just make compact cars and motorcycles but was able to earn the trust of its Indian partner by following a “humane” approach free of intimidation. The chairman of Suzuki, for example, participated in all negotiations personally and said, “We aspire to grow. And we’ll help you grow.” With his sincerity proved to the Indian government, he was able to enjoy its full support and cooperation despite opposition from local firms. He obtained government approval for the import of manufacturing equipment, acquired land for a factory at the government price, and received tax cuts and exemptions. He and the first CEO of Maruti Suzuki continue to have a good friendship and stress that the “personal relationship” is the key to a successful joint venture.
○●

Part of a step-by-step entry
Open Document