Abstract

This case discusses the expansion plans of the Shanghai Automotive Industrial Corporation (SAIC), the largest auto company in China. SAIC was created in 1990, by merging all the auto companies in the Shanghai region, to form a single state-owned corporation. It was a diversified organization with interests in various auto related industries, such as car loans, insurance, retailing, etc. However, it was best known for its joint ventures with Volkswagen and General Motors, which manufactured the top selling passenger cars in China. SAIC has not so far manufactured a car under its own brand name. In the early 2000s, SAIC began making moves towards becoming a global company. Its strategy involved consolidating its position within China, exploring foreign production and markets and developing a car brand of its own. The case discusses the steps taken by SAIC to become a global auto company and achieve its ambition to become one of the top 6 auto companies in the world by 2020. The case looks into the company's joint ventures in China, its acquisitions and deals with foreign companies and efforts to manufacture its own brand of cars. It concludes with a discussion of the company's future plans and the challenges it faces in achieving its ambitions.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Growth and expansion of a major state-owned Chinese auto company
• Role and importance of foreign joint ventures in developing countries
• Role of strategic acquisitions in international expansion and the importance of cultural factors in negotiating international business deals.

Keywords

Shanghai Automotive Industrial Corporation, Globalization, Volkswagen AG, General Motors Corp., Chinese Automobile Industry, World Trade Organization, Toyota Motor Corp., Joint Ventures, Shanghai-Volkswagen joint venture, Shanghai-GM joint venture, Rick Wagoner, Ssangyong Motor Co., MG Rover, Fiat SpA and SAIC Motor Corporation Limited