“China – big but not easy” (1)
titled the Automotive Industries Magazine in its July 2005 issue, reporting about the German premium car manufacturer Audi, who is manufacturing in China since 1999. This simple statement breaks down the risks and opportunities for the German automotive supplier industry in China into two keywords. The first one is “big”: in the last decades, the eyes of the world’s automotive supplier industry have been directed to China, because it is promising to be the world’s biggest market soon. Given the fact that one fifth of mankind lives in China and its standard of living is rapidly improving, it is only a question of time until the promise becomes real. In addition to this enormous sales potential, the advantages of cheap labor and an improving level of technology and education show China’s attractive sourcing potential. The second one is “not easy”: exploiting this potential and taking part in the growth comes with a variety of challenges to the foreign suppliers: a completely different culture, a dynamic and highly competitive market and a political-legal system that favors its home industry over the foreigners – only to name a few. Although this paper is concerned with the German automotive suppliers in particular, it is inevitable to draw a complete picture of the country in general and the situation of the automotive manufacturers, which are in many areas the driving force behind the supplier’s activities. So the first chapters describe the market environment, progressing from the general to the specific and providing the framework necessary for the in-depth analysis of risks and opportunities. These are separated into internal and external aspects. Internal risks and opportunities derive from the weaknesses and strengths of a company itself. The external risks and opportunities in contrast can hardly be influenced by the suppliers as they are effects of the political and economical development. But the suppliers can develop strategies to adapt: using the opportunities and avoiding the risks! So, the aim of this paper is to show why China is such an important but difficult market for the German automotive suppliers and – as a conclusion – to give recommendations and strategies for being Successful in China.
(1) Wessel-Aas (2005), p.1
Inhaltsverzeichnis (Table of Contents)
- 1 - Introduction
- 2 - Country profile: China
- 3 – The historical development of the Chinese automotive market
- 3.1 – The development until 2001
- 3.2 China's accession to the WTO and its effects
- 4 – The current situation of the automotive industry in China.
- 4.1 - Market characterization: OEM market.
- 4.2 - Market characterization: Supplier and aftermarket segment.
- 4.3 - Market outlook ……..
- 5 - Analyzing risks and opportunities for German suppliers in China....
- 5.1 Possible motives for the market entry...
- 5.2 – Different market entry modes.
- 5.3 Risks...
- 5.3.1 External risks
- 5.3.2 Internal risks
- 5.4 Opportunities
- 5.4.1 - External opportunities
- 5.4.2 - Internal opportunities.
- 5.5 Proposing strategies
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper explores the opportunities and challenges for German automotive suppliers operating in the Chinese market. It aims to provide a comprehensive understanding of the Chinese automotive industry landscape, emphasizing the factors that make it both a promising and complex environment for foreign players.
- The rapid growth and development of the Chinese automotive market
- The unique risks and challenges posed by the Chinese market to German suppliers
- Potential strategies for German suppliers to capitalize on opportunities and mitigate risks in China
- The cultural, political, and economic factors influencing the automotive industry in China
- The importance of understanding and navigating the Chinese business environment
Zusammenfassung der Kapitel (Chapter Summaries)
The paper begins with an overview of the Chinese automotive market, highlighting its historical development, current situation, and future outlook. It explores the growth drivers of the market, including the increasing demand for vehicles and the rapid economic development of China. The paper then analyzes the risks and opportunities for German suppliers, categorizing them into internal and external factors. Internal risks and opportunities stem from the individual company's strengths and weaknesses, while external factors include the political and economic environment in China. The paper concludes with recommendations and strategies for German suppliers to succeed in the Chinese market.
Schlüsselwörter (Keywords)
The key focus of this paper lies on the analysis of risks and chances for German automotive suppliers in the Chinese market. It delves into the characteristics of the Chinese automotive industry, examining the country's economic and political environment. The paper explores the different market entry modes for German suppliers, assessing their potential risks and opportunities. Keywords such as 'market entry strategies', 'cultural differences', 'political risks', 'economic factors', and 'competitive landscape' are central to the analysis.
- Quote paper
- Felix Emmerich (Author), 2008, An analysis of risks and chances for the German automotive supplier industry within the Chinese market, Munich, GRIN Verlag, https://www.grin.com/document/92964
