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GLOBAL MARKETS
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Q A
What insights did you get into how globalisation is being approached in China today?
“It has been fascinating to see how joint ventures are operated in China. For example, if you take the Shanghai Automotive Industry Corporation (SAIC), they have joint ventures with Volkswagen and General Motors. In their truck division they also have joint ventures with Volvo and Iveco.
“SAIC rotates its senior executives and their middle managers from the different joint ventures. A manager, for instance, will be asked to work in General Motors for a couple of years. Then they will move them to Volvo and then on to Volkswagen. At the end of eight or ten years, you have a manager who has learnt best practices from some of the most well respected, well run and profi table auto manufacturers in the world - and they all work for the same company.
“This cannot be replicated in other companies, because most don’t have joint ventures with such a variety of partners. The result is an incredibly well qualifi ed and knowledgeable workforce. Chinese automotive businesses can now buy brands, confi dent that they will have the in-house knowledge needed to manage them successfully.
“The more brands that come up for sale, the more I expect to see Chinese fi rms, with the blessing of the Chinese government, start to become market leaders in certain automotive lines.”
Q A
Are joint ventures viewed positively or negatively by today’s global organisations?
“Joint ventures were a bit of a sore subject for a lot of the fi rms. If you have intellectual property issues, it’s perfectly understandable. But a lot of companies, particularly emerging market companies, were using joint ventures; the argument being: ‘We can’t develop a marketing team the way Procter & Gamble can, so why don’t we partner with them, and use our resources elsewhere?’ They don’t really see this approach as an issue. Japanese fi rms felt the same way.
“The fi rms that seemed to really do well with joint ventures were those which had embraced the idea and were able to achieve high levels of mutual trust and create benefi ts for both parties.”
© 2013 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member fi rm of the KPMG network of independent member fi rms affi liated with KPMG International Cooperative, a Swiss entity. All rights reserved.
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