Seminar Presentation: Product Safety in the Chinese Automotive Industry (University of Zurich 2010)

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Presentation for the Seminar "Business Ethics in China" @ University of Zurich

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  • Alright, welcome from my side as well. I first of all want to thank Marco for his interesting presentation on the Swiss TV broadcasting industry. Since I had to derive an analysis as well as a paper on the very same topic, it was very interesting for me to see how Marco accomplished this task. As you will see in the next 30 minutes or so, I chose a slightly different approach to answer the questions we were given within this course. This basically has two implications: First, I guess, it will be very interesting for Marco to hear what I have to say about the Swiss TV market. Secondly, and more importantly, this means that you don‘t have to litsen to the same things again.
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • The first thing we have to discuss is the definition of the word broadcasting. Because if we define broadcasting in the very sense of the word as the production and transmission of TV contents, we end up here ( next chart ).
  • Seminar Presentation: Product Safety in the Chinese Automotive Industry (University of Zurich 2010)

    1. 1. Reaching Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in ChinaChina 2010 than by Car – Course: Business Ethics in China University of Zürich Page 1But is it Safe?» Business ehtical discussion on product safety issues of Chinese cars and European-Chinese automotive cooperations University of Zurich Business Ethics in China Spring Term 2010 Presentation of the Seminar Paper Andreas Schwarzinger
    2. 2. «What it‘s all about.» Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China Course: Business Ethics in China Table of contents. University of Zürich Page 2 » the automotive industry and China » the automotive industry and China » european-chinese automotive cooperations » european-chinese automotive cooperations » product safety in the automotive industry » product safety in the automotive industry » ethical discussion » ethical discussion
    3. 3. «What it‘s all about.» Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China Course: Business Ethics in China University of Zürich Page 3 Table of contents. » the automotive industry and china » the automotive industry and china
    4. 4. Andreas SchwarzingerProduct Safety and European-Chinese «Attack of the Dragon.» Facts and figures on the Chinese Automotive Cooperations in China Course: Business Ethics in China University of Zürich Page 4 automotive industry. » China has become the biggest automotive 1. automotive industry and China » » » 2. european-chinese market in the world and overtook the USA automotive cooperations in 2010: 3. product safety in the automotive industry » More than 10 million new car registrations 4. ethical discussion in 2009 » Expected new car registrations of 17 million in 2010 » 13.7 million produced cars in 2009
    5. 5. Andreas SchwarzingerProduct Safety and European-Chinese «Attack of the Dragon.» Facts and figures on the Chinese Automotive Cooperations in China Course: Business Ethics in China University of Zürich Page 5 automotive industry. » Car population: 1. automotive industry and China » » » 2. european-chinese automotive cooperations » 500 cars per 1000 habitants in Germany » 21 cars per 1000 habitants in China 3. product safety in the automotive industry 4. ethical discussion » Still a huge growth potential!
    6. 6. «What it‘s all about.» Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China Course: Business Ethics in China University of Zürich Page 6 Table of contents. » european-Chinese automotive cooperations » european-Chinese automotive cooperations
    7. 7. Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China «Shall we do this together?» Course: Business Ethics in China University of Zürich Introduction into European-Chinese Page 7 cooperation in China. » 2 ways of operating in China for 1. automotive industry and China » » » 2. european-chinese automotive cooperations foreign manufacturers: » Paying high import taxes 3. product safety in the automotive industry » Forming joint ventures with Chinese 4. ethical discussion firms
    8. 8. Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China «Sorry, but that‘s a secret.» Course: Business Ethics in China University of Zürich Knowledge transfer within European- Page 8 Chinse joint ventures. » Intention of (forced) joint ventures: 1. automotive industry and China » » » 2. european-chinese automotive cooperations » Knowledge transfer from foreign to 3. product safety in the automotive industry Chinese firms 4. ethical discussion » Closing the technological gap between foreign and Chinese manufacturers » Make the Chinese automotive industry more competitive
    9. 9. Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China «Sorry, but that‘s a secret.» Course: Business Ethics in China University of Zürich Knowledge transfer within European- Page 9 Chinse joint ventures. » But: 1. automotive industry and China » » » 2. european-chinese automotive cooperations » Joint ventures are solely used to produce 3. European cars for the Chinese markets product safety in the automotive industry » Knowledge transfer takes mainly place in the production and manufacturing of vehicles 4. ethical discussion » R&D and marketing activities are still accomplished in the headquarters outside of China
    10. 10. «What it‘s all about.» Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China Course: Business Ethics in China University of Zürich Page 10 Table of contents. » product safety in the automotive industry » product safety in the automotive industry
    11. 11. Andreas SchwarzingerProduct Safety and European-Chinese «Ouch!» Automotive safety issues of the Automotive Cooperations in China Course: Business Ethics in China University of Zürich Page 11 past. 1. automotive industry and China » » » 2. european-chinese automotive cooperations 3. product safety in the automotive industry 4. ethical discussion
    12. 12. Andreas SchwarzingerProduct Safety and European-Chinese «Ouch!» Automotive safety issues of the Automotive Cooperations in China Course: Business Ethics in China University of Zürich Page 12 past. 1. automotive industry and China » » » 2. european-chinese automotive cooperations 3. product safety in the automotive industry 4. ethical discussion
    13. 13. «Ouch!» Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China Course: Business Ethics in China University of Zürich Page 13 Impact of automotive safety issues. » Automotive safety issues had and still have a large 1. automotive industry and China » » » 2. impact in Western countries european-chinese automotive cooperations » Tilting Mercedes A-Class (“Elk test”) 3. product safety in the automotive industry » People died because the first-gen Audi TT broke out 4. ethical discussion » Gas pedal of some Toyotas stuck » Dacia Logan (produced by Renault) scored poorly in crash tests
    14. 14. «The big bang.» Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China Course: Business Ethics in China University of Zürich Page 14 Importance of crash tests. » The European Union (European Commission) is 1. automotive industry and China » » » 2. in charge of approving new cars for the European market european-chinese automotive cooperations 3. product safety in the automotive industry » Within the approval process, the authorities rely 4. on the results of consumer crash tests like e.g. the EuroNCAP ethical discussion » Good crash test results are considered “prestigious” and bad results lead to a massive impact in the public due to intensive press coverage
    15. 15. «The big bang.» Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China Course: Business Ethics in China University of Zürich Page 15 The Brilliance crash test debacle. » History of Chinese cars in European crash tests: 1. automotive industry and China » » » 2. european-chinese » 2005: Jiangling Landwind automotive cooperations 3. » 2007: Brilliance BS6 product safety in the automotive industry » 2009: Brilliance BS4 4. ethical discussion
    16. 16. Andreas SchwarzingerProduct Safety and European-Chinese «The big bang.» Crash test of the Jiangling Automotive Cooperations in China Course: Business Ethics in China University of Zürich Page 16 Landwind (2005). 1. automotive industry and China » » » 2. european-chinese automotive cooperations 3. product safety in the automotive industry 4. ethical discussion
    17. 17. Andreas SchwarzingerProduct Safety and European-Chinese «The big bang.» Crash test of the Brilliance BS6 Automotive Cooperations in China Course: Business Ethics in China University of Zürich Page 17 (2007). 1. automotive industry and China » » » 2. european-chinese automotive cooperations 3. product safety in the automotive industry 4. ethical discussion
    18. 18. Andreas SchwarzingerProduct Safety and European-Chinese «The big bang.» Crash test of the Brilliance BS4 Automotive Cooperations in China Course: Business Ethics in China University of Zürich Page 18 (2009). 1. automotive industry and China » » » 2. european-chinese automotive cooperations 3. product safety in the automotive industry 4. ethical discussion
    19. 19. Andreas SchwarzingerProduct Safety and European-Chinese «The big bang.» Crash test of the BMW 3 Series Automotive Cooperations in China Course: Business Ethics in China University of Zürich Page 19 (2001). 1. automotive industry and China » » » 2. european-chinese automotive cooperations 3. product safety in the automotive industry 4. ethical discussion
    20. 20. «What it‘s all about.» Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China Course: Business Ethics in China University of Zürich Page 20 Table of contents. » ethical dicsussion » ethical dicsussion
    21. 21. Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China «What should we do?» Course: Business Ethics in China University of Zürich Ethical discussion on China‘s automotive Page 21 product safety issues. » First of all: Be realistic about the Chinese 1. automotive industry and China » » » 2. automotive industry’s future! european-chinese automotive cooperations » It has just started 3. product safety in the automotive industry » The industry is too unconsolidated 4. ethical discussion » The technological gap will not be closed by tomorrow » Product quality and safety is bad » Automotive joint ventures in China do not help the situation
    22. 22. Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China «What should we do?» Course: Business Ethics in China University of Zürich Ethical discussion on China‘s automotive Page 22 product safety issues. » So obviously, the Chinese automotive industry 1. automotive industry and China » » » 2. needs help european-chinese automotive cooperations 3. » Why should European manufacturers help? product safety in the automotive industry » If they would help, they would just feed a sleeping 4. ethical discussion giant
    23. 23. Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China «What should we do?» Course: Business Ethics in China University of Zürich Ethical discussion on China‘s automotive Page 23 product safety issues. » On the other hand: 1. automotive industry and China » » » 2. european-chinese » Europe had more than a 100 years to get things right, automotive cooperations so just let China have its own 100 years 3. product safety in the automotive industry » Foreign manufacturers alone probably could not 4. meet the still growing Chinese demand alone ethical discussion » Chinese customers probably will not accept foreign cars and brands » China has to keep the impressive economic growth of the past, the automotive industry is a vital part of it
    24. 24. Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China «What should we do?» Course: Business Ethics in China University of Zürich Ethical discussion on China‘s automotive Page 24 product safety issues. » All of this bases on a questionable assumption: 1. automotive industry and China » » » 2. european-chinese » Chinese customers and firms do see the need for automotive cooperations safer cars 3. product safety in the automotive industry » This assumption is questionable, because: 4. ethical discussion » Still low traffic density in China » Not much experience with car traffic » Not much knowledge of the consequences of accidents » Crash safety is an experience good
    25. 25. Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China «What should we do?» Course: Business Ethics in China University of Zürich Ethical discussion on China‘s automotive Page 25 product safety issues. » Ethical question: 1. automotive industry and China » » » » If European customers and firms know about 2. european-chinese automotive cooperations 3. the dangers of car traffic and Chinese product safety in the automotive industry customers and firms don’t, … 4. ethical discussion » … shouldn’t we tell them? » … should we help them? » … should we be forced to help them?
    26. 26. Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China «What should we do?» Course: Business Ethics in China University of Zürich Ethical discussion on China‘s automotive Page 26 product safety issues. » My point of view: 1. automotive industry and China » » » » Yes, we should help them, because 2. european-chinese automotive cooperations 3. product safety in the » We know about the dangers of the car automotive industry 4. » European firms know how to make safe cars ethical discussion » Cheap (and unsafe) cars target mainly younger, inexperienced customers and low-income classes of the population » They don’t care or don’t have the time, money and information to check for the safety of cars
    27. 27. Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China «What should we do?» Course: Business Ethics in China University of Zürich Ethical discussion on China‘s automotive Page 27 product safety issues. » But: Shouldn’t we just let customers decide to 1. automotive industry and China » » » 2. either buy a safe but more expensive or a cheaper, unsafe car? european-chinese automotive cooperations 3. product safety in the automotive industry » No! 4. ethical discussion » Customers underestimate the dangers of cars » Car purchase decisions are often driven by emotions » Sales staff have incentives to keep quiet about unsafe cars » Crash safety is an experience good » Cars are like drugs or weapons!
    28. 28. Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China «What should we do?» Course: Business Ethics in China University of Zürich Ethical discussion on China‘s automotive Page 28 product safety issues. » But how should we or European car 1. automotive industry and China » » » 2. manufacturers help? european-chinese automotive cooperations 3. » Version 1: product safety in the automotive industry » Just sell the old car platforms to Chinese firms 4. ethical discussion » Would not change the underlying problem! » Version 2: » Promote the importance of crash safety » Found a transnational, non-profit safety lab
    29. 29. Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China «What should we do?» Course: Business Ethics in China University of Zürich Ethical discussion on China‘s automotive Page 29 product safety issues. » Why a transnational, non-profit safety lab? 1. automotive industry and China » » » 2. european-chinese » Non-profit: Use all its incomes for R&D in automotive automotive cooperations safety  addresses hold-up problems 3. product safety in the automotive industry » European manufacturers could share R&D costs and the 4. safety lab could catch economies of scale ethical discussion » Fair prices for consulting services for car manufacturers of developing countries (Brasilia, India, China, …)
    30. 30. Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China «What should we do?» Course: Business Ethics in China University of Zürich Ethical discussion on China‘s automotive Page 30 product safety issues. » Why a transnational, non-profit safety lab? 1. automotive industry and China » » » » Because it combines economic incentives for 2. european-chinese automotive cooperations 3. European manufacturers to help Chinese firms to product safety in the automotive industry make their cars safer to meet the ethical claim 4. that every car buyer should have the right for a safe car! ethical discussion
    31. 31. Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China «Let‘s copy a BMW!» Course: Business Ethics in China University of Zürich Reasons why China can‘t copy European Page 31 cars. » Question: How can European manufacturers 1. automotive industry and China » » » 2. successfully operate in China and especially within joint ventures without losing their european-chinese automotive cooperations 3. product safety in the know-how on how to make a good car? automotive industry 4. ethical discussion
    32. 32. Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China «Let‘s copy a BMW!» Course: Business Ethics in China University of Zürich Reasons why China can‘t copy European Page 32 cars. 1. automotive industry and China » » » 2. european-chinese automotive cooperations 3. product safety in the automotive industry 4. ethical discussion
    33. 33. Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China «Let‘s copy a BMW!» Course: Business Ethics in China University of Zürich Reasons why China can‘t copy European Page 33 cars. » Why can’t the Chinese just perfectly copy 1. automotive industry and China » » » 2. European cars and sell them cheaper than the originals? european-chinese automotive cooperations 3. product safety in the automotive industry » Because they are more than just the sum of all parts! 4. ethical discussion » More specifically: » European manufacturers limit the knowledge transfer » Protectionist legislations and standards in Europe influenced by the European automotive industry » Emotional differentiation of European premium cars
    34. 34. Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China «Let‘s copy a BMW!» Course: Business Ethics in China University of Zürich Reasons why China can‘t copy European Page 34 cars. » Maslow’s pyramid of needs: 1. automotive industry and China » » » 2. european-chinese automotive cooperations Need for self-realization 3. product safety in the automotive industry Need for social awareness 4. ethical discussion Social needs Safety needs Phyciolocigal needs
    35. 35. Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China «Let‘s copy a BMW!» Course: Business Ethics in China University of Zürich Reasons why China can‘t copy European Page 35 cars. » Automotive pyramid of emotions: 1. automotive industry and China » » » 2. european-chinese automotive cooperations We are purely emotional: Design, sound and colours We are fun: Sportiness and fun to drive 3. product safety in the automotive industry We are superior: Obvious luxury We are better: Technological leadership 4. ethical discussion We are green: Sustainability We are familiy: Family orientation We are safe: Crash safety We are solid: Reliability We are cheap: Get from A to B
    36. 36. «Any questions?» Andreas SchwarzingerProduct Safety and European-Chinese Automotive Cooperations in China Course: Business Ethics in China University of Zürich Page 36 Questions, answers and discussion.

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