Multinationals maintain operations in multiple nations, yet while managing their business within a variety of countries mangers must not neglect the home nation. China has been known for their automakers. Additionally, many well-known and successful carmakers have arisen within this country. Yet, a recent article reveals that Chinese car brands are losing market share within the sluggish China market. The article ‘Baby Brands’ may Save Local Carmakers in Sluggish China Market by Michael Dunne reveals that the Chinese multinational automakers are loosing their share to global joint ventures. Although the market may look grim, Chinese brands are not and should not loose hope. The article offers an insight into the car market of China and the options left for the car brands that are based there.

In detail, it had been analyze that Chinese car brands are losing market share and many belief that this will result in their downfall. But, author Michael Dunne believes otherwise stating that despite this reality the Chinese brand are not retreating in their business. Furthermore, he points to the fact that Chinese companies also engage in manufacturing “5 million commercial trucks and busses each year.” Additionally, “in the commercial segment Chinese brands totally dominant, taking a 96% market share.” Yet, when considering passenger vehicles the foreign brands are on top. With respect to this he author point that “what is often overlooked is that Chinese partners—powerful state enterprises -- own half or more of the joint ventures that manufacture and market foreign-car nameplates in China.” As a result, “Chinese ownership matters because it translates directly, into massive profit and a significant influence over how the joint venture business is run.” Furthermore, this allows the Chinese partners to retain ownership over these foreign brands within China. As a result, the Chinese brands can find a way to leverage their power by capitalizing on key relationships with these partners.

Madeleine M.April 18, 2012 at 8:43 AM
I believe that China should not focus on producing cars. The car industry is already dominated by the US and the Japanese market and there is fierce competition. However, although international governments such as the Latin American ones have been forming alliances with the Chinese government and some of their businesses include the selling of cars. The Chinese car industry should maybe start focusing locally rather than going internationally. As the years are passing by, we can see a major trend of drivers in China, more and more citizens are buying cars in order to transport themselves.