PRINT THIS PAGE A tune-up for China's auto industry
22/11/2002. Source:The McKinsey Quarterly. Paul Gao
Global carmakers can not only manage their costs and capital better by contracting out the manufacture of whole vehicles to Chinese companies but also work their way toward an even more valuable endgame: building Chinese automakers into a global manufacturing resource. With China's domestic automobile market projected to break into the world's top three by the end of the decade, global carmakers should rethink their strategies in the Chinese market. Since most global automakers have had large investments in that country only since 1999, it may seem odd to advocate scaling them back now. Yet an asset-light strategy in China would allow carmakers to concentrate on what they do best - developing products and brands - while contracting out the full production of autos, and not just components, to Chinese manufacturers.
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Taken from McKinsey Quarterly, 2002 Number 1
The McKinsey Quarterly, a journal in print and online from McKinsey & Company, featuring the latest thinking on business strategy, finance and management.
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