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18.07.2014

Winning Strategies for Global OEMs in China

Dual role of China not exploited

China is the most important global market for all European OEMs, in terms of sales and profits, but they are not exploiting the dual role of China, and fall short of using the true market potential. The dual role of China for automotive OEMs is as follows:

  • China is the largest single market for passenger vehicles
  • China becomes a foundation of global success

Many companies have recognized the first role of China as an attractive market. There are five factors for continued success in the Chinese market:

  • Install R&D and Engineering capacity in line with the importance of the market for your business
  • Localize vehicle design and features to cater for Chinese taste and behaviors
  • Localize sales to adjust for Chinese habits and buying behaviors
  • Increase scale advantage per model variant
  • Establish cost leadership at par with Chinese competitors

These companies could however become even more successful globally, if they would establish China as the important pillar in their global business model. This will require the following:

  • Make China an export hub in your global production network
  • Source systems and components from China for global markets
  • Make China R&D an important node in your global R&D network – develop global designs from China

Strategy Engineer’s White Paper describes in detail what it takes to become successful in China.

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