Carmakers maturing, but can they go global?

• Source: Chinadaily
• [17:36 April 20 2009]
• Comments

Lessons from the past

Tomorrow's vehicle manufacturers and parts makers can benefit from the years of case studies on automotive expansion strategies, some successful, some not.

Back in the early 1970s, Japanese vehicle manufacturers focused on expanding beyond their own market with a couple of key vehicles, choosing to lower costs and enhance quality as each model was revised, known as the kaizen approach to continuous improvement.

In the 1980s, these same makers knew that real success stemmed from manufacturing locally in key export markets, moving closer to the consumer and eliminating currency as a variable in the cost of a vehicle.

Through that decade, new Japanese factories popped up in the U.S., Canada and the United Kingdom. These same manufacturers simplified the process by bringing their suppliers with them and building products already being built back in Japan - the secret was to build upon lessons learned at the new factories.

Hyundai/Kia also learned from Toyota, Honda, Nissan and others' experiences. The company learned to emulate the successful strategies and be careful not to duplicate those that the Japanese regretted. Chinese automakers destined to be successful in China and beyond have the benefit of Japanese hindsight but must make their own mark on the global industry as they expand.

 Best expansion routes

Undoubtedly, two or three China-based vehicle manufacturers will be successful on the global scene by the middle of the next decade. Their success will hinge on their ability to adapt to a changing market, not expand their vehicle portfolio beyond their efficient capability and integrate appropriate technologies required for success against extremely competitive players.

Success is neither simple nor assured. They will face many hurdles as global players strengthen their competitive game and raise the stakes. Chinese makers have a sizeable internal market, the right industry relationships and the benefit of hindsight to make their mark on the world's vehicle market.

Michael Robinet is vice president of Global Vehicle Forecasts for U.S. automotive consultancy CSM Worldwide Corp .