Overall Strategic Trends & Issues
In recent years, Chinas automotive industry has bad to levels that have positioned it as the second large-mouthedst automotive market in the world due to rising income levels and decreases in tariffs (China: Automotive Report, 2009). harvest-time is expected to continue as the Chinese government has set the automotive sector as a future egress industry, lowered restrictions on car ownership, and emphasized its road-building program (China: Automotive Report, 2009).
Because the fastest selling cars in China are the smaller models with low profit margins, American companies who have formed reciprocal ventures with Chinese state-owned companies have not yet realized large avails to their bottom line (China/USA Cars: Tug-of-Car, 2009). However, it is expected that future trends bequeath include richer Chinese upgrading to more expensive models and that the country go away become a low cost manufacturer that volition sell in developed markets (China/USA Cars: Tug-of-Car, 2009).
As international companies eye the lucrative Chinese automotive market, strategic issues exist.
For example, fords major upkeep with a potential turn to sell Volvo to Chinas Geely is the transfer of intellectual airplane propeller to the Chinese firm (China/Sweden cars; Geely closes in on Volvo, 2009). Companies pursuing partnerships or selling portions of their businesses must ensure that they structure advantageous agreements that benefit and protect both parties.
In addition, Chinas automotive industry is under increasing environmental pressures that will vim the country towards investment in alternative-energy vehicles (China Automotive Report, 2009). Chinas growing dependence on imported oil causes concern for the government and its factory emission reduction efforts have been eclipsed by the increase in car ownership (China Automotive Report, 2009). Therefore, China has been implementing stringent standards that will have strategic impact...If you want to pound a full essay, order it on our website: Ordercustompaper.com
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