Chinese Automakers Research Articles

Spatial patterns of car sales and their socio-economic attributes in China

Using data from the Economic Advisory Center of the State Information Center (SIC), we examined the spatial patterns of car sales in China at the prefectural level in 2012. We first analyzed the spatial distributions of car sales of different kinds of automakers (foreign automakers, Sino-foreign joint automakers, and Chinese automakers), and then identified spatial clusters using the local Moran’s indexes. Location quotient analysis was applied to examine the relative advantage of each type of automaker in the local markets. To explain the variations of car sales across cities, we collected several socioeconomic variables and conducted regression analyses. Further, factor analysis was used to extract independent variables to avoid the problem of multicollinearity. By incorporating a spatial lag or spatial error in the models, we calibrated our spatial regression models to address the spatial dependence problem. The analytical results show that car sales varied significantly across cities in China, and most of the cities with higher car sales were the developed cities. Different automakers exhibit diverse spatial patterns in terms of car sales volume, spatial clusters, and location quotients. The scale and incomes factor were extracted and verified as the two most significant and positive factors that shape the spatial distributions of car sales, and together with the spatial effect, explained most of the variations of car sales across cities.

The Chinese Automobile Market and the Strategies of European, American, Japanese, Korean and Chinese Auto Makers

The Chinese Automobile Market and the Strategies of European, American, Japanese, Korean and Chinese Auto Makers

A Modified Malmquist-Luenberger Productivity Index: Assessing Environmental Productivity Performance in China

The Malmquist-Luenberger (M-L) index has been used to assess environmental productivity growth with undesirable outputs, through applying directional distance function (DDF) to standard Malmquist productivity measurement. However, when calculating the cross-period DDFs, the M-L index has the same infeasibility problem as the Malmquist index does. To address this infeasibility problem, this paper discusses when infeasibility may happen and develops a modified M-L index that is based on a new DDF. We propose that the modified M-L index can be applied to assessing environmental performance at both macro- and micro-levels. At a macro-level, we evaluate China's growth in total factor productivity (TFP) from 1999 to 2012, accounting for undesirable impacts. The results show that technical change is the main driver of most TFP growth. The TFP changes support the status quo of a distinct gap in economic development among different regions. At a micro-level, we assess Chinese auto manufacturers’ environmental performance from 2005 to 2012. The results suggest that Chinese automakers have enjoyed a noticeable TFP improvement, and that technical change is the major contributor as well. Taking together, reducing air emissions and other pollutants is an effective way of improving environmental productivity. As demonstrated, the proposed modified M-L index has proved to be consistently feasible and guarantees non-negative reference targets for all metrics. As a result, we recommend the modified M-L index as a robust tool for solving the infeasibility problem that is typical in conventional index and for assessing productivity under environmental impacts.

Responsible pay: managing compliance, organizational efficiency and fairness in the choice of pay systems in China’s automotive companies

This article explores the changing use of pay systems in China’s automotive industry and contextual conditions shaping these changes: China’s emerging market economy; and the evolution of collective labour relations. It sets out an integrated framework developed from institutional logics, new economics of personnel and organizational justice theory. The hypotheses derived from this framework are tested using the deductive case study method. The researcher collected the data in two waves of case studies including six Chinese automakers over 10 years. Key findings point to the convergence of pay strategy towards job values, performance and competence, and a wide variation in the use of variable pay and pay plan leverage. Through its exploration of forces underlying this convergence and variance in China’s automotive industry, the article contributes to research on Strategic HRM and institutional complexity. The results highlight a variety of tensions among predictions of relevant theories. The outcome is subject to how employers interpret and manage institutional pluralism and complexity. The process by which employers choose response strategies also highlights the importance of responsible behaviours in choices of pay systems, which this article terms Responsible Pay.

The Process of Internationalization of JAC Motors in Brazil From the Standpoint of Sustainable Organizational Behavior

The present study has the target of understanding the process of internationalization of the Chinese automaker JAC Motors in Brazil, as well as identifying if the Brazilian group SHC that brought it to the country and controls its operations in the Brazilian market holds a sustainable organizational behavior. The theoretical basis used to understand the internationalization process was the economic theories described by Dunning and behavioral theories from Uppsala University. In addition, we looked at documents and data from the Chinese government in order to understand the policy towards sustainability and innovation processes in the country. Also a vast bibliographic research has been performed regarding the term sustainable organizational behavior in order to support the research made over the SHC group in which we approached the questions related to the interest the group had on JAC Motors, which drove JAC Motors to get into the Brazilian market, questions regarding sustainable management, resources allocation as well as aspects related to innovation and technology.

STRATEGIES OF CHINESE AUTOMAKERS

ABSTRACT Backed by its booming economy, China surpassed the United States and became the largest automobile market in the world in 2009. 2010 Beijing International Auto Show and 2010 Shanghai World Expo gained the world attention. The rising Chinese independent automakers, namely, Geely, Chery and Wanxiang Group, wowed the world and represented the “China Power.” What strategies have they used or would use to accomplish their goals? What are the common characteristics that different Chinese automakers could have? The answers may be of interest of both the East and the West. This study analyzed the case of the three Chinese independent automakers. It is clear that young Chinese independent automakers followed the “attracting-in” and “walking-out” pattern, narrowed the gap by international cooperation, independent innovation, and merger and acquisition, followed by leaping forward and directly tackling the latest technology. Although these young Chinese independent automakers need to continue their effort on building brand and global expansion, they have set themselves ready to compete with major players at the same start line now. Meanwhile, Chinese government’s “pushing power” behind them should not be underestimated. Keywords Chinese auto makers, international cooperation, innovation, merger and acquisition, strategy, technology

Application of Kansei Engineering in Electric Car Design

Under the background that Chinese automakers are in need of effective approaches in designing electric cars, Kansei engineering enables the designers to apply quantitative analysis from the perspective of user analysis so that they can quickly identify key design elements and build correspondence between the design images and the shape elements. The paper uses cases study to illustrate the application of Kansei engineering in the design of the electric cars.

Editorial

Last year President Hugo Chávez of Venezuela announced the appearance of what a Dutch national newspaper called an “anticapitalist car.” The two models, named by Chávez himself as the “Orinoco” and the “Arauca,” after rivers that run through Venezuela, are locally assembled under a preferential license agreement with the Chinese automaker Chery. The cars are sold for half the price of other makes and are marketed to the expanding Venezuelan middle class. They are intended as “new attainments of the revolution” that are meant to raise the “standard of life of the people.” This new venture was in a tradition that Chávez’s opponents claim started in 2006, when he came close to making a similar deal with Iranian president Ahmadinejad.

Chang'an Automobile and the Chinese automotive industry

Subject area International business Study level/applicability Undergraduate/graduate/executive education. Case overview China has become the world's largest producer of automobiles, surpassing the USA and Japan. The Chinese auto industry differs quite significantly from those countries though. While the industry exhibits a substantial degree of concentration in the USA and Japan in early 2011, it remained highly fragmented in China. The Chinese Central Government had announced a desire for consolidation, yet it remained unclear whether a significant shakeout would occur in the near term. Like many Chinese automakers, Chang'an partnered with well-known global auto makers to develop, produce, and distribute its products. In the coming years, Chang'an hoped to develop more independence from its foreign partners, including the production and distribution of self-branded cars. However, the company grappled with how it could strive for independence while managing its existing joint ventures. Executives worried too about how to compete with foreign automakers who had achieved global economies of scale. The case provides a rich description of the evolution of the Chinese auto industry, and it documents how the Chinese industry differs from other global markets. Readers can analyze the extent to which they believe scale economies provide foreign firms an advantage over smaller Chinese rivals, and they can evaluate the conventional wisdom regarding the industry's minimum efficient scale. The case also provides a detailed account of Chang'an's rise to prominence. The case concludes by offering an in-depth description of the firm's key rivals, and it presents the key questions being considered by Chang'an executives in 2011. Expected learning outcomes Enables students to examine how and why an industry's structure can differ substantially across geographic markets. Enables students to examine whether the need to achieve economies of scale may cause substantial consolidation in the Chinese auto industry. Provides an opportunity to evaluate the pros and cons of the joint venture strategies employed in China. Provides an opportunity to examine how a relatively small firm can position itself against large multinationals in a high-growth emerging market. Supplementary materials Teaching notes.

A product cost estimation for the early design of sedans using neural networks

Reducing the product cost at the early design stage is rarely implemented among Chinese automakers due to the lack of an effective cost estimation tool. In this paper, a Back Propagation (BP) neural networks-based cost estimation method is proposed for designers and managers. The product cost differences that are caused by design changes could be evaluated and the market position of a new sedan could be targeted. To avoid the inaccessibility of the confidential cost data, the product costs are calculated backward from retail prices with product cost ratios. Instead of introducing pilot data, real-world data are adopted in this study. The prices and specifications of sedans are retrieved through an authentic automobile website, while the product cost ratio is estimated by a panel of experts with the Delphi method. The neural networks are trained with the data to estimate the product cost. The application of this method for new sedan development in a Chinese automotive company is also presented.

Geely motors: a Chinese automaker enters international markets

On 22 January 2006, Shufu Li, the Director of International Marketing for Geely Motors, was rushing to the check-in counter at the Detroit Metropolitan Airport in order to travel back to Shanghai, China. He had just come from the Detroit International Auto Show where his company had presented its new car models. Geely (pronounced 'Gee-Lee') had been selling cars in China since 1997. In 2004, they had begun exporting cars to North Africa and Latin America. Geely had now set their sights on the USA, the largest automobile market in the world. Geely's management was planning to sell cars in the US market for under US$10,000 by late 2008. The International Auto Show in Detroit was crucial in order to get feedback from and establish relationships with potential business partners, customers and the press. While he was boarding the plane, Mr. Li began to reflect on Geely's transition from a regional manufacturer focused on the domestic Chinese market to an international player. Would the last few years of their marketing effort turn Geely into a global player in the auto market? Would US consumers warm to the cars Geely had shown at the auto show? How could Geely overcome the lack of brand name and the negative country-of-origin quality image that Chinese manufacturers have?

Brillance China Automotive: Case

This case explores the strategic direction of the Chinese auto maker, Brilliance China Automotive, as it faced increased competition from foreign firms due to changing Chinese trade policies.