Business Case Studies, Leadership Case Study, Tata Group,Ratan Tata

Code : COM0027

Year : 2004

Industry : Automobiles

Region : China

Teaching Note:Available

Structured Assignment :Available

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Introduction:In July 1994, when the Chinese authorities initiated the task of making China's automotive sector as one of the country's strongest industries, the market had opened up for the foreign companies. However, the foreign car companieswere required to qualify fewpre-conditions: they were required to first invest in the components industry and transfer the technology to the Chinese partner in a joint venture, where the share of the foreign partner would not exceed 50%.

General Motors (GM), in an effort to gain access to the Chinese automotive market, invested in technical assistance projects, which facilitated technology-transfer to the Chinese automotive sector.

By 1996, GM had set up a number of joint ventures to manufacture auto components in China. Eventually, GM got the permission and so, set up a manufacturing unit investing between $1 billion and $2 billion to manufacture mid-sized cars in China.