There were a lot of competitors in auto industry and usually a lot of autos, especially Japanese autos, were sold in international trade. But, from the 1990s, the developmental strategy of the auto industry had to be changed because both national and ...
There were a lot of competitors in auto industry and usually a lot of autos, especially Japanese autos, were sold in international trade. But, from the 1990s, the developmental strategy of the auto industry had to be changed because both national and international auto markets were already saturated. Especially, Asian market that was once greatly expected was finally found very limit.
However, the potential market of Asian - China, the need of auto has quickly increased along with the fast economic growth. Chinese government also do their best to attract foreign investment on auto industry and expect auto production to grow into one of their main industries.
In this kind of background, Japanese auto enterprises began to invest directly in China and they have succeeded in it.
With this kind of background, since the middle of the 1990s, Japanese auto enterprises began to invest directly in China and their operations were very successful. Those companies included Toyota, Honda, Isuzu, and Nissan, etc. All of them are main enterprises that stand out from their national and international competitors. Up to now, eleven main auto enterprises in Japanese have already entered auto market in China.
In this paper, the reason that Japanese auto industry can compete with other competitors from Europe and America was attributed to successful application of operational strategy. Toyota and Honda are good examples of using operational strategy. However, Japanese enterprises are facing more fierce competition from other countries that also aim on Chinese market after China has joined WTO. Consequently, they have to strengthen their competitive and come up with new strategy dealing with the changes to keep their success in China, the most important market of Asian. It is therefore necessary to carry out research on Chinese market continuously.
Direct investment strategy that Japanese companies took is a good model that Korean auto industry can follow. Korean enterprises can learn from the strategy Japanese enterprises operated in Chinese market for their own future success.
Japanese enterprises' complete market investigation, direct investment to a specific region, full use of enterprise's reputation and popularity, local market developmental skill, and the detailed future plans were discussed in this paper. It was suggested that direct investment into China of Korean enterprise should be benefited from following these ways. First, enterprises should establish a new model concerning with Chinese needs. Second, they should develop more detailed operations in target market. Third, they should polish this kind of operations for a long time development.
In China, the stage of the competitors from developed auto industry all over the world, the popularization of auto will be accelerated because of the direct investment from oversea enterprises. There are new problems coming up, such as environmental and traffic problems. Therefore, any country that wants to do auto businesses in China, those problems are important and needed to be understood and dealt with correctly. This situation also emphasized the necessity of corresponding strategy developing.