International Business: Market Entry Strategies in the Chinese Automobile Industry

Running head: INTERNATIONAL BUSINESS
International business
Name of student
Name of University
Author note

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INTERNATIONAL BUSINESS
Table of Contents
International business.................................................................................................................1
Major characteristics of joint ventures as an entry mode strategy in the Chinese automobile
industry.......................................................................................................................................3
Foreign companies’ motivations associated with the Chinese automobile market....................3
Theory of international business used for market entry into the Chinese automobile industry.4
Characteristics, advantages and disadvantages two other market entry mode strategies in the
Chinese automotive market........................................................................................................5
Main strategic players in the Chinese automobile market.........................................................6

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INTERNATIONAL BUSINESS
Major characteristics of joint ventures as an entry mode strategy in the Chinese
automobile industry
The case study illustrates about the entry into the automobile industry in China, which
has created opportunities for managing international business along with increase in revenue
generation. The trade tariffs have resulted in keeping the prices of automobiles higher based
on the international standards. The automobile manufacturing companies have mainly
followed the joint venture strategy to make an entry into the Chinese market. The main
features of the joint ventures include finding out the best local partners and developing new
assembly plants and at the same time, source the components from within China along with
importing activities for ensuring successful vehicle production. This also establishes good
relationship between two countries and allows for strengthening the business functioning
through joint ventures and enhancing the automobile manufacturing production largely too.
Because of the uneven landscape, China has been one of the largest producers of Jeep
and thus 40 percent share of domestic production helped in importing components along with
export of foreign exchange has been possible. Though both the Chinese companies and other
automobile manufactures have shared goals, the Chinese focused on technologies to make a
global presence while the outside companies aimed at using China as a platform through joint
ventures to export products in various places where the vehicles are demanding.
Foreign companies’ motivations associated with the Chinese automobile market
The foreign companies’ motivations are associated with formation of joint ventures
with the Chinese companies mostly for enhancing the production level and export the
vehicles all over the world, especially in the locations, where the demands for off road
vehicles are high. The motivations are also associated with the reduction of sourcing and
costs of production along with taking advantage of the initiatives undertaken by the