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CHINA: "China Automotive Monthly: Executive Summary - April 2013" report

CHINA: "China Automotive Monthly: Executive Summary - April 2013" report. 12-page report by LMC Automotive.

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back to index backCHINAtalk May,  2016


Foreign Firms Need New Strategies For China's 'New Normal'

Multinational corporations (MNCs) started making significant investments in China back in the early 1990s in particular after Deng Xiaoping made his now famous visit to the south” in 1992.  Over a couple of decades of investing in China, MNCs’ attitude on China has evolved. Broadly speaking, there are now three distinct groups of companies we can classify according to their market views.  The first group includes MNCs who have come to China, made investments and being unsuccessful, decided that China is not their cup of tea.  They generally found it difficult to be profitable and some have withdrawn from China.  Examples of these include Home Depot HD +1.80%, Best Buy BBY +2.13%, Media Markt, and Mattel MAT -0.37%. The second group of companies are those belonging to sectors with overcapacity – often quite significant ones – in China. These companies include the cement sector, steel, aluminum and the like. These companies are typically in a wait-and-see mode, waiting to see if and when the overcapacity may be managed away. The final group of companies are those who have found China to be a major, and often highly profitable market. For them, China is one of their largest, if not the largest market in the world. Prime examples are the car makers such as VW/Audi , BMW, Daimler, General Motors and Ford. But this group also include others like Starbucks, Nike and Honeywell.  Recently, Apple reported a drop of its quarterly earnings by 13% and China contributed to 26% of that drop.

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Source: Forbes - GAI





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