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Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
Leveraging the Asian Markets for Global Competitive Advantage
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Leveraging the Asian Markets for Global Competitive Advantage

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Presented at the 3rd Kuala Lumpur International Automotive Conference on December 1, 2010

Presented at the 3rd Kuala Lumpur International Automotive Conference on December 1, 2010

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  • 1. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company Booz & Company December, 2010 Kuala Lumpur
  • 2. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 2 One can divide the world into mature and emerging markets Emerging Markets Mature Markets Emerging and Mature Markets Source: Booz & Company analysis
  • 3. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 3 Historically, the distribution of global wealth is skewed towards mature markets Source: Global Insight Emerging markets 70% Mature markets 30% Emerging markets 27% Mature markets 73% GDP Contribution by Emerging and Mature Markets (2008; Total = $61 Tn) Population Distribution in Emerging & Mature Markets (2008; Total = 6,730 MM)
  • 4. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 4 US: 22% China: 12% Western Europe: 21% Latin America: 8% Japan: 7% India: 5% All other countries: 25% Percentage of World GDP by PPP1) (Last 500 years) 100% 80% 60% 40% 20% 0% 1500 1550 1600 1650 1700 1750 1800 1850 1900 1950 2000 And a structural shift of economic power from the West to the East is taking place In past three decades, China and India markets have been growing dramatically and returning towards its historic share of world GDP Source: Literature research
  • 5. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 5 Their growth momentum is predicted to continue, making them the most important economies in the world GDP growth vs. GDP/capita (2007 – 2015, 2050) GDP Per Capita China (2007) GDPgrowth(2007–2015and2050) India (2007) UK (2007) China (2050) India (2050) United States (2050) United States (2007) Brazil (2050)Brazil(2007) Russia(2007) Russia (2050) Note: Size of bubble is proportional to GDP of the economy Source: EIU; Goldman Sachs BRIC Report
  • 6. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 6 Asia, driven by China and India, has become an important market for U.S. and European MNCs Note 1): Sales revenue of the JVs in China are not included as they are accounted for using the equity method and recorded as an operating profit Source: Literature search; company annual reports; Booz & Company analysis ABB 31.827% 10% Eaton 11.913% 53% Emerson 20.921% 45% Others Flowserve 4.419% 32% Tyco International 17.216% 48% Asia US Europe U.S. and European MNCs Total Revenue 2009; US$ Billion 17% 24% Siemens 98.916% 27% 22% 38% VW1 136.39% 11% GE 156.8 Asia US Europe Others Honeywell 30.911% 49% Caterpillar 32.3
  • 7. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 7 The center of gravity of global market has shifted to the emerging markets - take the Auto market as an example Monthly Motor Vehicle Sales Note: The “Emerging 16” are Argentina, Brazil, China, Czech Republic, Inida, Indonesia, Korea, Malaysia, Mexico, Poland, Russia, South Africa, Taiwan, Thailand, Turkey and Venezuela Source: CEIC; Haver; UBS; Booz & Company analysis Shanghai: A Lean, Green Detroit
  • 8. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 8 China exceeded US to become the world largest Auto market in 2009 Total China Auto Sales 2005 - 2010, in million units +23% October Sep Aug Jul Jun May Apr Mar Feb Jan 2010 Jan - Oct 14.68 1.53 1.56 1.55 1.74 20092008200720062005 Note 1): Data does not include heavy truck Source: Global insight; CAAM auto market press release; Literature research; Booz & Company analysis China US Japan Germany Brazil Others 2009 63.6 4% 20% 16% 5% 2008 66.0 13% 20% Top Five Auto Market in the World(1) 2008 - 2009, in million units Vehicle sales in the first 9 months of 2010 in China rose 52% from the same period last year to over 13 million
  • 9. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 9 For the Global Auto market, Asia pacific represents the greatest opportunity for growth = Area Reflects Size Of 2009 Actual PV Sales = Area Reflects Size Of 2020 Forecasted PV Sales ’000 Units Market 2009 PV 2015 PV 2020 PV Asia Pacific 17,233 28,518 33,249 NAFTA 10,794 17,319 18,461 Western Europe 13,638 14,183 14,512 Eastern Europe 2,907 5,214 6,392 Latin America 3,311 4,886 6,027 Africa/Middle East 2,693 3,864 4,245 NAFTA Growth thru 2020: 7,667K CAGR (2009-2020):5% Latin America Growth thru 2020: 2,716K CAGR (2009-2020): 6% Asia Pacific Growth thru 2020: 16,016K CAGR (2009-2020): 6% Africa/Middle East Growth thru 2020:1,552K CAGR (2009-2020):4% Eastern Europe Growth thru 2020: 3,485K CAGR (2009-2020): 7% Western Europe Growth thru 2020: 874K CAGR (2009-2020):1% Source: Global Insight Data
  • 10. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 10 Within Asia pacific, the greatest growth opportunities are China and India New Zealand Australia Mongolia China Japan Indonesia Malaysia Philippines Vietnam Thailand Myanmar Laos Cambodia Taiwan South Korea North Korea Bangladesh Bhutan India NepalPakistan China: Growth thru 2020: 11,461K CAGR (2009-2020): 8% India: Growth thru 2020: 2,947K CAGR (2009-2020): 10% Japan: Growth thru 2020: -170K CAGR (2009-2020): 0% ASEAN: Growth thru 2020: 994K CAGR (2009-2020): 7% South Korea: Growth thru 2020: 132K CAGR (2009-2020): 1% Taiwan: Growth thru 2020: 110K CAGR (2009-2020): 3% Australia: Growth thru 2020: 293K CAGR (2009-2020): 4% = Area Reflects Size Of 2009 Actual PV Sales = Area Reflects Size Of 2020 Forecasted PV Sales ’000 Units Note: ASEAN figures include top 6 ASEAN member countries, including Thailand, Malaysia, Indonesia, Singapore, Philippines, and Vietnam Rest of Asia-Pacific includes Hong Kong and Pakistan Source: Global Insight Data Market 2009 PV 2015 PV 2020 PV China 8,672 16,840 20,133 Japan 3,922 4,131 3,752 India 1,533 3,271 4,480 ASEAN* 925 1,548 1,919 South Korea 1,235 1,349 1,367 Australia 536 732 829 Taiwan 250 327 361 New Zealand 54 80 85 Rest of Asia Pacific 104 236 321 Total 17,233 28,518 33,249
  • 11. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 11 In such a market, Chinese VMs are significantly gaining market share but international OEMs still dominate International OEMs/Brands China PV sales 2008-2009 (incl. import, million units) Local OEMs/Brands International/local OEM China PV market share 1) Excluding CV volumes from SAIC-GM-Wuling 2) Including AVIC Source: Global Insight China Report BMW 1.07% 1.14% MMC 1.01% 0.67% Suzuki 2.67% 3.14% PSA 3.19% 3.18% FORD 2.95% 2.96% Nissan 6.18% 6.46% Honda 6.73% 8.29% Hyundai 10.13% 8.47% GM1 9.19% 8.82% TOYOTA 7.81% 10.32% VW 16.63% 17.77% Chang an2 1.71% 1.54% Greatwall 1.76% 1.08% Brilliance 1.45% 1.67% BYD 5.17% 2.86% Geely 3.66% 3.12% FAW 4.62% 5.67% Chery 5.11% 3.87% Local 2009 8.6 29% 71% 2008 5.7 25% 75% International 2008 2009
  • 12. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 12 China Auto Market by Segments (2009, in thousand units) 3,000 2,000 16,000 15,000 14,000 13,000 12,000 1,000 MVAN 1,231 HVAN ’000 Units 6,000 4,000 0 274 SUV-E 709 SUV-D 1,937 SUV-C 3,646 SUV-B 758 PUP-D 424 PUP-C 582 MPV-E 69 MPV-D 1,274 MPV-C 1,141 MPV-B 766 E2 268 E1 2,210 D2 1,107 D1 4,826 C2 3,291 C1 15,124 B 5,758 A 2,741 2020E 2015E 2009 While there is clear growth in the SUV, MPV and cross-over segments, China remains a Sedan market China Source: Global Insight data Sedans continues to dominate the China market with strong growth, though SUVs are gaining share
  • 13. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 13 The India market is dominated by a few OEM’s in the rapidly growing A/B segments Domestic OEMs International / Local OEM Passenger Vehicle Market Share Domestic OEMs (Including Maruti) 933 (65.0%) 502 (35.0%) International OEMs/Brands 2009 Total Market Share, by Sales (Incl. import) 1.60% Ford 2.10% 1.90% Fia t 0.40% GM 4.00% 3.80% Honda 4.10% 4.30% Hyundai 20.30% 20.60% Toyota 0.70% 0.60% VW 1.50% 1.30% Renault 1.50% 0.40% SoM 2009 SoM 2008 Top 8 International OEMs/Brands HINDUSTAN MARUTI TATA 52.5% 51.0% 12.0% 13.2% 0.5% 0.5% Source: Global Insight SP08 Asia Market Forecast – India Total: 1,435K units
  • 14. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 14 India Auto Market by Segments (2009, in thousand units) 7 E1 32 D2 43 D1 77 C2 56 C1 894 B 2,066 5,149 MPV-D ’000 units 467 SUV-C 443 SUV-B 57 PUP-C 264 A 458 MPV-C 323 MPV-B 1 E2 5,000 2,000 1,000 0 HVAN 274 SUV-E 13 SUV-D 200 400 600 800 1,200 1,400 1,600 1,800 2,200 4,400 4,600 4,800 5,200 India still remains a micro and small car market, despite its growth in large cars 2020E 2015E 2009 India Source: Global Insight data A and B segments account for the majority share of the market, while other segments remain small
  • 15. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 15 1,100 1,000 100 0 SUV-E 16 SUV-D 305 SUV-C 195 SUV-B 1,400 800 500 400 300 203 PUP-C 1,297 MVAN 256 MPV-E 0 MPV-D 386 MPV-C 370 MPV-B 982 HVAN 171 E2 14 E1 80 D2 62 D1 224 C2 78 C1 1,050 B 1,854 A 372 200 1,900 1,800 1,700 1,600 1,500 1,300 1,200 ’000 units 900 The ASEAN market has a very diverse set of transportation means 2020E 2015E 2009 Source: Global Insight data ASEAN Auto Market by Segments (2009, in thousand units)
  • 16. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 16 Carsper1,000People GDP Per Capita (Logarithmic Scale) 0 100 200 300 400 500 600 1,000 10,000 100,000 Yet China and India are just entering the accelerated growth phase typical of emerging markets Turkey India China Indonesia Iran Thailand Mexico Brazil Argentina Malaysia Russia Poland Australia Canada Germany U.K. U.S. Note: Each line of symbols represents a 19-year progression for one country, from 1990 through 2008, GDP Per Capita is in Purchasing Power Parity (PPP) Source: Booz & Company analysis The S- curve China Discussion   A country’s threshold of mobility lies near US $10,000 GDP per capita (PPP), where automobile ownership accelerates   China is at the early taking-off stage of the S- curve   India remains fairly distant from the mobility inflection point, but continues to make steady progress India
  • 17. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 17 Successful companies must employ new strategies in Asia to improve their global competitiveness Integration of Asia business operations into the global value chain Leveraging “horizontal capabilities” resident in Asia to expand market participations Adaptive Brand Innovation to extend product reach and grow shares Driving the Green Revolution in Personal Mobility Creating a New Asian Organizational Epicenter as a Platform for Growth 1 2 3 4 5 Asian business operations are increasingly become the platform for growth and development of capabilities needed to compete globally Source: Booz & Company analysis
  • 18. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 18 Service Sales & Distribution MarketingManufacturingSourcing Product Development R&D Service Sales & Distribution MarketingManufacturingSourcing Product Development R&D Stage 1 Circa early to mid 1990s Stage 2 Circa mid to late 90s   Start a few, isolated production facilities   Began to integrate production facilities within China   Began to use China as a procurement source   Built brand for the local market and local sales & distribution Service Sales & Distribution MarketingManufacturingSourcing Product Development R&D Service Sales & Distribution MarketingManufacturingSourcing Product Development R&D Stage 3 Early 2000s Stage 4 Present to 5-10 years hence   Build R&D and PD centers in China   Integrate China into global manufacturing network   Integrate China into global sourcing network   Transfer global best practice to China   Integrate China into global value chain Multi-national companies are looking for more partnership in China for their global expansion 1 Integration of Asia business operations into the global value chain
  • 19. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 19 Successful MNCs have pioneered to extend their value chain to China Examples of Companies with China as Core of Global Strategies   The “New GM”   “Made and Designed in China”   “Reverse Innovation”   Globally Integrated Enterprise 1 Integration of Asia business operations into the global value chain Source: Literature research; Booz & Company analysis
  • 20. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 20 GM is a successful example of gaining competitive advantage by cooperation with local players GM’s Sales in China +29% 2008 200920072005 2006 (2005-2009, in Million Units)   GM aims to sell 3 million vehicles a year there by 2015 as it adds new, more fuel-efficient models to meet demand   “ China GM’s largest single market worldwide and GM will launch 25 new models in China in 2010 and 2011 in a bid to maintain its leading position” - Gan Wenwei, President and General Manager of GM Source: Automotive News; Company profile; Booz & Company analysis Expansions of GM’s Corporate Operations in China   Recently, GM announced a plan to set up Shanghai GMIO headquarters, managing the unified management of all overseas business, which indicates the central role China plays in GM's global strategy   GM and SAIC also announced to set up a GM-SAIC Motor Investment Co. in Hong Kong with a $1 billion investment split equally between the two for use in purchasing 100 percent shares of General Motors India –  GM-SAIC India is expected to make small cars and commercial vehicles in India   GM’s mini-vehicle China JV (SAIC- GM-Wuling) will introduce the first own-brand car (Baojun, meaning treasured horse) to target the fast- growing low end market; The car model is Based on Buick Excelle and is aiming to combine world-class quality with low ownership costs 2 Leveraging “horizontal capabilities” resident in Asia to expand market participation
  • 21. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 21 JV partnership and acquisition provide solutions for GM to gain access to China market, and to strengthen its presence in India GM’s Partnership with SAIC   SAIC and GM formed 50:50 R&D JV in August 2010 to: –  Jointly develop fuel-efficient engines and transmission –  Deliver new power-train systems within 3 years   Products include small engine and front-wheel-drive transmission that are 10% more fuel-efficient and reduce emissions by 20%   A Chinese automaker and a foreign partner share intellectual property rights on a core technology for the first time   Nov.,2010, SAIC announced to acquire 1% GM share through investment of $500M during GM’s IPO   YTD Oct. 2010, GM’s sales in India grows up almost 79% and will surpass 100,000 year end   Nov. 12, 2010, GM formally inaugurated the flexi- engine plant in Talegoan, Pune. The plant will take total Talegoan output to 300,000 cars and 300,000 engines annually.   The automaker has developed local suppliers and awarded component supply contracts worth $500million. It plans to source components worth $1bn in the next two years for its global operations. Implications to GM’s Expansion into India “We are bringing in four passenger cars and two commercial vehicles in the next two years in 14 fuel variants,”…“We are planning to invest US $250m more in the Indian market.” - Karl Slym, President of GM India Source: Literature research; Booz & Company analysis India 2 Leveraging “horizontal capabilities” resident in Asia to expand market participation
  • 22. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 22 Premium Mid-Market Low-Tiered Emerging markets appear in a multi-tier structure Volume Pricing Multiple-Tiered Market in Emerging Markets 1X 2-3X 4-5X 1X 0.6-0.8X <0.5X VERY ROUGH ESTIMATE Source: Literature research; Booz & Company analysis 3 Adaptive Brand Innovation to extend product reach and grow share
  • 23. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 23 Asian markets have different Auto market demands, therefore the players have to use different competition strategies In China auto market, there are demands in different markets In India auto market, there is only strong market demand in the low-end market Low-end market Mid-end market High-end market Low-end market Mid-end market High-end market Market demand Strong No demand Weak Global players Global and Chinese players Chinese players Global and local players High margin Low margin Low margin Different players could target different market All they players have to compete with low price and low cost, leading players have big scale 3 Adaptive Brand Innovation to extend product reach and grow share Source: Literature research; Booz & Company analysis
  • 24. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 24 JV and acquisition are also key solutions for MNCs to gain access to local market 1990’s Early 2000’s Late 2000’s Premium Mid-range Low-end CASE STUDY Example: Caterpillar’s expansion through local acquisition Source: Literature research; Booz & Company analysis 3 Adaptive Brand Innovation to extend product reach and grow share Caterpillar focused on selling to Chinese government and premium segment in private sector Japanese and Korean competitors entering the middle market (Komatsu, Hitachi, Dae-woo, Hyundai) Local manufacturers focusing on low end but also moving up to expand market coverage (e.g., Xugong) Caterpillar acquired Shandong Engineering Machinery and formed local R&D centers to expand into lower end market while optimizing cost base to compete
  • 25. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 25 With increasing pressure from air pollution, oil consumption and congestion, China is compelled to reinvent propulsion technologies Source: Synergistics; Booz & Company analysis China to Reinvent Propulsion Technologies For alternative propulsion technologies such as clean diesel, hybrid and electric vehicles, China does not lead the technological development 4 Driving the Green Revolution in Personal Mobility Air Pollution   Beijing, Xi’an, Shenyang, Shanghai and Guangzhou have been listed among the Top 10 cities with the worst air pollution. The massive growth of the automotive market only adds to the problem   The rapid growth of the automotive market worsens the problem. For example, Beijing’s automobile industry contributed 73% of the overall pollution problem in 2003 Energy Consumption   China imports two-thirds of its oil, and its ever-increasing thirst has had a dramatic impact on global energy prices   The gasoline and diesel consumption has accounted for half of the total consumption of petroleum products Traffic Congestion   In the light of the current rate of development and gas consumption level, China will have over 150 million vehicles and petroleum consumption will exceed 250 million tons in 2020
  • 26. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 26 The central government is playing a key role in shaping industry development Battery Manufacturers Vehicle Manufactures Utilities Companies Official China at Work SASAC 4 Driving the Green Revolution in Personal Mobility Note: SASAC: State-owned Assets Supervision and Administration Commission of the State Council Source: Booz & Company analysis Electric Vehicles Market
  • 27. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 27 Policies for alternative power-train vehicle proactive provinces Source: Development Research Center of the State Council “Automotive Bluebook” Beijing Shanghai Chongqing Jilin Changchun Shandong Qingdao Guangdong Wuhan Relying on Beijing Auto, aim to increase new energy vehicle sales at least to 10K in 2010 •  Production capacity of alternative power train vehicles to 100K in 2012, 300K in 2015. •  In 2012, model operators using alternative energies to be 4,000 vehicles, including 1,300 HEV and 2,600 EV •  By 2011, sale 1,100 alternative power train vehicle of Chang’an brand •  Production capacity of alternative power train vehicles to 300K for assembly, 1000K for engine Relying on FAW Auto, aim to increase new energy vehicle capacity to 50K in 2012 Use more than 1,000 HEV within 3 years •  By 2010, Capacity of alternative power train vehicles to 50K, •  Foster 5 competitive alternative power energy companies Produce and Sell 10K EV in 2012 Make a characteristic automotive cluster •  From 2010, include EV into government purchasing list •  Pursue to the share of EV to 10% •  30K vehicles of model operating public transportation and taxi within 3-5 years •  200K Capacity of EV by 2015 • By 2011, 20 routes and 1K unit of alternative energy public buses • By 2020, increase the no. of LNG stands from 10 to 131, and no. of LPG stands from 15 to 20 4 Driving the Green Revolution in Personal Mobility In addition to the central government, strong support is also expected from the various regional governments
  • 28. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 28 Low High Degree of Value-Chain Migration ShiftofOrganizationalEpicenter Small Big Analysis Framework on Companies’ Organizational Epicenter Shift and Degree of Value-Chain Migration MNCs in most of the ‘90s ILLUSTRATIVE Successful MNCs also shift their organizational epicenter to China (1/2) 5 Creating a New Asian Organizational Epicenter as a Platform for Global Growth Source: Literature research; Booz & Company analysis
  • 29. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 29 For example, R&D and engineering centers established in China and India have assured Hyundai’s local adaptation and sales success Hyundai Motors Worldwide R&D Centers Namyang, Korea Central R&D Headquarters Hyderabad, India Hyundai Motor India Engineering Pvt. Ltd (R&D Center) Chiba, Japan Hyundai R&D Center Russelsheim, German European R&D Center / Design Center Chino, California, US America Technical Center Detroit, Michigan, US America Technical Center Irvine, California, US America Design & Technical Center Kia Design Center America Technology & Design Technology Headquarters Design Frankfurt, German Kia Design Center Europe   Korea R&D center: R&D headquarters, the overall R&D planning, the main vehicle design   China and India R&D center: localization support, local product adaptation and modification   U.S. R&D Center: model design for the U.S. market   Germany R&D center: product design for the European market, focusing on R&D of powertrains   Japan R&D center: the next generation of vehicle design and development of electronic systems Beijing, China Beijing Hyundai Technical Center Function of R&D facility Source: Literature research; Booz & Company analysis 5 Creating a New Asian Organizational Epicenter as a Platform for Global Growth
  • 30. 20101125_Leveraging the Asian Markets for Global Competitive Advantage_v3.0 (with backup).pptBooz & Company 30 A well-leveraged Asian market strategy will certainly make a win- win situation... Thank you!

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