China poses significant complexity for automotive manufacturers. The promise of rapid domestic market growth and its potential as a low cost export base make China very attractive. Yet the multitude of challenges, from overcapacity, declining prices and government regulation, to lack of availability of credit – just to name a few – make it a difficult market to navigate. There are of course no easy answers to the China puzzle. That said, there are significant opportunities for both multi-national automotive companies doing business in China and domestic China automotive companies.
As an Intellectual Supporting Partner of the Boao Forum for Asia Annual Conference 2006, we present our insights to the challenges and opportunities faced by multinationals and domestic companies in two separate articles respectively.
For multinationals, we have selected two strategic concepts that are very relevant – one an old idea that we believe can be executed more effectively to drive additional impact; and the other, a new concept that is especially well-suited to the complexities and uncertainties in the China market.
For domestic Chinese manufacturers, we present they key findings of our executive survey that focuses on automotive export challenges and opportunities. Furthermore, we discuss the trends of the domestic automotive industry and the critical strategic options for Chinese automotive companies.