Honda in China: Government Regulations and Firm`s Strategy
China’s automobile industry, with its incredible growth seems to be on the verge of creating catalytic shifts in the global automobile industry, which has been dominated by the European and US carmakers since a century. The strong support of the government has made it become the world's second largest and most dynamic auto market. Its cost advantage and high potential domestic market has attracted auto majors to set up their manufacturing unit in the country. However, in a bid to accelerate the technology's pace, the government has forced the foreign auto makes to share their technology know-how. As a result, Honda –
Japan’s first automaker to expand into
China – has reshaped its strategies to work towards creating an entirely new ‘Made in
China’ brand that will serve its long-term interests in the Chinese car market, and as well conform to the government's regulations.
The case essentially focuses on the government's influence in the business environment by means of regulations and laws that affect the corporate strategies. Also, Honda’s new ‘
China’ brand initiative – its prospects and perils is discussed. The intricacies involved in marketing the
China brand globally – low-brand image and poor customer perception – are broadly debated. Above all, the dilemma is outlined – should government interfere in the market or leave it to the dynamic play of the market forces?
QUESTIONS:-
1. Analyse and explain the Chinese automobile market in respect of the case study
2. Do the SWOT Analysis of the case study