This thesis seeks to contribute to the discussion on latecomer firms by gaining insights into the catch up processes of five automobile companies in the passenger car segment, namely BYD (PRC), Chery (PRC), Geely (PRC), Tata Motors (India) and Mahindra & Mahindra (India). Based on learning theories and the core processes of automobile manufacturers, the thesis develops a catch up framework to systematically compare automobile latecomers. Korean automobile manufacturer Hyundai serves as an example for successful catch up and provides a contextual framing for catch up processes in the automobile sector. An analysis of empirical data provides evidence for the evaluation of the catch up status of the five challenger firms. The author emphasizes the influence of institutional settings in China and India and the role of business groups which both can act as facilitators for the catch up process. Finally, the thesis clusters the catch up strategies of the five observed companies in order to compare their approach. The results indicate that the observed automobile latecomers have not achieved a sophistication level comparable to incumbents in terms of capabilities. However, opportunities to accelerate the capability building process exist. Latecomers can leapfrog through partnering, acquisitions or changing the rules of the game in the industry.
Table of Contents
0. Introduction
1. The automobile sector
1.1. History of a mature industry
1.2. Value system and fundamental considerations
1.3. Incumbents as the catch up benchmark
1.3.1. Toyota Motor Corporation
1.3.2. General Motors Company
1.3.3. Volkswagen AG
2. A conceptual framework of key catch up factors in the automobile industry
2.1. Learning theories and their importance for catch up
2.1.1. The concept of absorptive capacity
2.1.2. The interaction between tacit and explicit knowledge
2.1.3. Leapfrogging in the knowledge creation process
2.2. Core resources and capabilities in the automobile sector
2.2.1. Developing automobiles
2.2.2. Managing the supply and production network
2.2.3. Operating a dealership and service network
2.2.4. Marketing and branding cars
2.3. Catch up model for the automobile industry
3. Hyundai: Insights from an early catch up case
3.1. Initial institutional setting in Korea and its development
3.2. The Hyundai Chaebol as a facilitator of catch up
3.3. Hyundai’s catch up path
3.3.1. Producing with assistance
3.3.2. Achieving fundamental design capabilities
3.3.3. Licensing core technology for advanced products
3.3.4. Developing distinct core technology knowledge
3.3.5. Establishing a global production network
3.4. Hyundai’s strategic pattern of learning
4. A longitudinal perspective on the selected automobile latecomers BYD, Chery, Geely, Tata Motors and Mahindra
4.1. Institutional environment in China and India
4.1.1. Pre-opening phases
4.1.2. Post-opening phase in China
4.1.3. Post-liberalization phase in India
4.2. The influence of business groups
4.3. Catch up path and current status of the five companies
4.3.1. Capability area I: Developing automobiles
4.3.2. Capability area II: Managing the supply and production network
4.3.3. Capability area III: Operating a dealership and service network
4.3.4. Capability area IV: Marketing and branding cars
5. Strategic pathways for automobile latecomers
5.1. Strategic group I: Follow the leaders
5.2. Strategic group II: Incremental innovation and exhaustive absorption
5.3. Strategic group III: Gambling on game changing developments
6. Limitations, further research and concluding remarks
Objectives and Research Themes
This thesis investigates the catch-up processes of five major automobile latecomer firms (ALCFs) from China and India (BYD, Chery, Geely, Tata Motors, and Mahindra) compared to established industry incumbents. The central objective is to evaluate their current technological and operational capability status and identify their strategic pathways toward global competitiveness.
- Theoretical foundation of organizational learning and absorptive capacity in the automotive context.
- Development of a comparative catch-up framework based on four core capability areas.
- Longitudinal analysis of the institutional settings in China and India and the role of business groups.
- Assessment of the catch-up strategies and future potential of the five selected latecomer firms.
Excerpt from the Book
3.3.1. Producing with assistance
Hyundai started its automobile catch up process in 1967 by founding a task force. This task force consisted of experts from the Hyundai Chaebol and external partners who had experience in project management and production. By recruiting these professionals, Hyundai formed an initial set of tacit knowledge by bringing in migratory knowledge. One year later Hyundai Motor Company entered into an agreement with Ford assembling SKD automobiles for the American multinational. This way Hyundai raised its level of explicit knowledge as blueprints, technical specifications and production manuals were transferred from Ford to Hyundai. Moreover, both companies exchanged engineers; the Ford expatriates working at Hyundai’s site helped translating the explicit knowledge embodied in the various documents into tacit knowledge, too. Hyundai’s engineers received training at Ford and thereby enhanced their level of tacit knowledge. In addition, Hyundai collaborated with suppliers that also sent their engineers to the South Korean company. According to Kim (1998) Hyundai set the ambitious goal “to complete plant construction in the shortest possible time” and thereby constructed an internal crisis which had the effect of increasing Hyundai’s intensity of effort to absorb new knowledge. By 1976 Hyundai had acquired the production capabilities necessary to produce not only SKD but also CKD cars. Moreover, it had managed to integrate migratory knowledge, which is referring to sub-section 2.1.1 extremely difficult.
Summary of Chapters
0. Introduction: Defines the scope of the thesis, clarifying the focus on passenger automobile manufacturers in China and India while identifying research objectives and guiding questions.
1. The automobile sector: Provides an overview of the industry's history, value system, and the characteristics of incumbents like Toyota, GM, and Volkswagen that serve as the benchmarks for latecomers.
2. A conceptual framework of key catch up factors in the automobile industry: Establishes a theoretical foundation for organizational learning, absorptive capacity, and core capability areas to create a structured catch-up model.
3. Hyundai: Insights from an early catch up case: Analyzes the successful historical transition of the Korean manufacturer Hyundai to provide a benchmark for modern latecomers.
4. A longitudinal perspective on the selected automobile latecomers BYD, Chery, Geely, Tata Motors and Mahindra: Conducts an empirical assessment of the current catch-up status of the five chosen firms based on the previously developed framework.
5. Strategic pathways for automobile latecomers: Clusters the observed companies into three strategic groups based on their learning approaches and leapfrogging strategies.
6. Limitations, further research and concluding remarks: Reflects on the findings and addresses the limitations of the current research, while suggesting potential directions for future study.
Key Keywords
Automobile industry, Latecomer firms, ALCF, Catch-up processes, Organizational learning, Absorptive capacity, Capability building, Hyundai, Business groups, Emerging economies, Strategic pathways, Leapfrogging, Innovation, Automotive technology, Industrialization
Frequently Asked Questions
What is the core focus of this master thesis?
The thesis focuses on how automobile manufacturing firms from emerging markets (specifically China and India) attempt to bridge the capability gap to established global industry incumbents.
What are the central themes of the research?
The work centers on organizational learning, the role of institutional frameworks, the influence of business groups, and the assessment of technological and operational capabilities in the automotive sector.
What is the primary objective or research question?
The goal is to systemically evaluate the catch-up status of BYD, Chery, Geely, Tata Motors, and Mahindra and to categorize their specific strategic learning approaches using a new catch-up framework.
Which scientific methodology is employed?
The author uses a case study approach with a longitudinal perspective, applying a comparative multiple-case logic to evaluate the companies' capabilities based on data and qualitative research.
What is addressed in the main body of the work?
The main body moves from theoretical learning frameworks (absorptive capacity) to an empirical analysis of industry benchmarks, the historical case of Hyundai, and a detailed assessment of the five chosen latecomer firms across four capability areas.
Which keywords best characterize the work?
Key terms include catch-up processes, latecomer firms, automobile industry, organizational learning, and strategic group clustering.
How does the business group affiliation specifically impact Tata Motors?
As part of the Tata Group, Tata Motors benefits from financial back-up, access to technical know-how and talent, and a long-term strategic orientation, which shields it from short-term market pressures.
Why is BYD considered a special case in the strategic analysis?
BYD is categorized in a separate strategic group because its "adapted path creation" relies heavily on its existing battery expertise, representing a high-risk gamble on the future breakthrough of electric vehicles rather than traditional combustion-based learning.
- Citar trabajo
- Daniel Wäldchen (Autor), 2012, Catch up processes in the global automobile industry, Múnich, GRIN Verlag, https://www.grin.com/document/204741
