Chery Automobile: Chinese Firms Catching Up
(8 pages of text)
Chery Automobile Co., Ltd. is one of the few private automobile companies in China. Compared to state automobile companies, it lacks adequate resources and state support; compared to joint-venture brands, it cannot leverage popular and profitable international models. Despite these obstacles, Chery has developed dramatically over the last decade, becoming the top automobile exporter among all automobile companies in China. Strategic alliances served as the foundation of its amazing growth, accelerated technological catch-up and helped it thrive in overseas markets. Since 2012, however, Chery’s domestic sales have continuously decreased, similar to other automobile companies worldwide. Due to the Global Financial Crisis, intense competition in the automobile industry and fast technological change, Chery has been confronted with new challenges in the past two years, such as decreasing sales in the domestic market and more opportunities overseas. Despite its leading position in exports, Chery needs to figure out the next stage of strategic development in adapting to the current and future environment. What should Chery do next?
This case is suitable for MBA, EMBA and other master’s students of management and business studies, as well as executives and managers of private enterprises. The case can be used in courses or training on innovation management, global management, organizational management, entrepreneurship or strategy. This case can be used:
- To provide a snapshot of one Chinese firm’s technological catch-up by utilizing a variety of strategies.
- To demonstrate the linkage between catch-up strategies at a firm level and the mechanism of dynamic capability development.
- To understand the relationship between catch-up and internationalization for emerging multinational companies.
If used in an executive program, this case helps answer the following questions that concern many managers of multinational firms:
- How strategic alliances can be adopted for technological catch-up and the internationalization of enterprises.
- How an open innovation strategy can be adopted in the catch-up process.
China, Large, 2008-2013
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