Study On Independent Development Strategy Of FAW-VW

It has been discussed for a long time, whether the automobile industry of China must have the independent development ability. In recent years, with the development of Chinese economy, the automobile market of China grows very fast, and this problem was also paid more and more attention to by numerous automobile manufactory. One of the basic and strategic missions of the business enterprise is to insure its long-last existence, but the core factor is a product that has competitive advantage, a strong brand with great public appeal. This can be realized by high level technique innovation, individual product character, being seasoned with the orientation of environmental protection, best quality and market expected price. Thus produces considerable investment repay for manufactory. Chien's speech, the product development is to use the "right product"with "good price"to win the market at "opportune moment". During 2001-2003 years, the Chinese automobile market presented the blowout type of growth and drew on numerous automobile manufactory into this market. Each supplier took various means to try to keep the market quota. This caused the unprecedented drastic competition. Depreciator becomes the most effective and direct measure. The price of each car goes down and down, this makes the profit of each manufactory gets lower and lower. Automobile industry has already come into a narrow margin of profit. Under this background, whether can the automobile supplier provide product that can satisfy customer quickly? Whether can they reach this target with the lowest cost, the lowest investment? Whether do they have the strong brand? All of these are the key of winning of competition. We have got already experience from the development of the Chinese automobile market in recent years that the future market competition will be a competition of the brand, a war of the brand. It is even more important to own the market than owning the factory, but unique way to own the market is to own the powerful brand. So, strong independent development ability will be great support of molding the strong brand. Hence, the independent development ability of the enterprise becomes sticking point which is relating to survival and development of each manufactory. It is very clear, if the FAW-VW wants to win the market, to participate the international competition, he must has strong independent brand and build up high level of independent development ability. By analysis to development of Chinese automobile technique, we can see, similar to situation of most of Chinese saloon manufactory, the main technique source of FAW-VW is joint venture partner, VW Germany. The management activity in FAW-VW are given priority to product indraught, localization, production, sales, and so on. In the process of technique indraught, the government adopted a lot of measure to try to let joint venture partner to transfer more techniques into China.However,14 years of experience enunciated, joint venture did not give us advanced technique. Overseas investor will not support the independent development in joint venture in order to protect own monopolize of technical study and reduce cost. They will not really transfer the advanced technique to China. So in 14 years of joint venture, FAW-VW had got only production ability., We didn't pay enough attention to development ability and didn't invest enough on it. We didn't have imported technique digested and absorbed and convert. This directly result in dilatoriness of strategic decision, higher product cost, lumberly market responses, slender competition ability. Moreover, FAW-VW had worked hard in the Chinese market many years, not for ourselves but for a VW brand. How can we participate the international competition in the future? FAW-VW will be one of the worldwide assembly lines of VW Germany and loses independency on politics and economy at the end. How to adapt the current competition situation and build up FAW-VW's core competencies? I think, the certain choice is independent development bases on technique import. The high level development ability does not mean a certain part, but a complete high level development system. This system is constitute by three parts: the first is research and development ability of complete industry; the second is that one of each automobile group, such as FAW-VW; the third is that one of parts supplier. The development ability of the large group should become the core of system among three sides. To be frank, compare with the developed country, we still have biggish gap on complete industry level, automobile technique and parts industry levels. However, Chinese automobile industry has got substantial advancement by 20 years of indraught, digests and absorption of thchnique. Current judgment of the development of local automobile industry is: we have already had basal ability and foundation of further development. Many of fetched car types have reached already high localization rate and the automobile parts industry also...