Volkswagen just announced that it will acquire a 20 % stake in Suzuki of Japan. The move is expected mainly driven by VW’s intent to increase its presence in the Asian market for small trucks.
Something may have gotten past me, but does Chrysler really have a lot of wiggle room for experiments on their customers? It’s recent commercial for the Chrysler 300 features former Soviet leader Mikhail Gorbachev, former Polish leader Lech Walensa and is a call for freedom for Burma’s Aung San Suu Kyi. The commercial is an adaption of what Fiat’s ad agency Armando Testa has done in Europe for its Lancia brand. While the commercial is edgy even for the European market, it may fly there. As noble as the cause is, there is serious reason to believe that it is a total waste of advertising dollars in the US market. Many Americans either won’t know who Aung San Suu Kyi is or they couldn’t care less. Some may not even recognize Walensa or Gorbachev. It may even hurt Chrysler in some Asian markets that take a more authoritarian stance at opposition leaders. What was Chrysler thinking? Or was it Fiat that was doing the thinking? Watch it here: http://www.youtube.com/watch?v=ftJ9nTBDx2E
As reported earlier (on this blog and elsewhere) Chinese automaker SAIC will enter into a 50:50 joint venture with GM to sell small cars and light trucks in India. There’s not only the GM angle to this move. Viewed from the SAIC angle, memories from the recent past arise. In 2004, SAIC purchased a majority stake from Korean Ssangyong motors which ended in one big disaster with Ssangyong seeking bankruptcy protection. Most recently there have even been allegations of intellectual property theft. The Koreans blamed the Chinese, and the Chinese the Koreans – just what you would expect of two countries that haven’t head the best of relations throughout history. Now, what about India? What makes SAIC confident that the same challenges won’t emerge in India. Or, if they emerge, what makes them believe that they’re now better at handling them. And, would Indian consumers be interested in a predominantly Chinese car?
How is this different? Well, this blog tends to report on how things go WRONG in international markets. Here’s a video from FT.com that talks about how to get your marketing RIGHT in India: http://www.ft.com/cms/a5dd621a-e39d-11dc-8799-0000779fd2ac.html?_i_referralObject=4747400&fromSearch=n
Over the years General Motors (GM) has become China’s second largest automaker, mainly through a 50:50 Joint Venture with Shanghai Automotive Industry Corporation (SAIC). This is an achievement for which GM should command a lot of respect as joint ventures with Chinese partners have been known to be tricky at times. Now GM has just announced that it will not only sell parts of its Indian operations to SAIC, but that it would also transfer an additional 1 % of the stock in the joint venture to them, thus raising their stake to 51 %. After this move, GM China has finally become Chinese, and this is may be a whole different ball game. To some degree the move is understandable as GM has been desperate for cash recently, but strategically the deal does not make an awful lot of sense (unless you’re SAIC, of course).
German carmaker Daimler announced that it will move part of its C-class production to Alabama. Besides Germany, the C-class has already been produced in two other countries for a while – South Africa and China. The facility in Tuscaloosa, Alabama that so far has specialized in Daimler’s M-, GL- and R-class vehicles. When the production first started in Alabama about 10 years ago it received high acclaim for its high efficiency and novel approach to dealing with cultural differences. Not many difficulties to be expected in this case – too bad for this blog. But hey, who knows? It’s still a German company in the United States!
Martin Coles, Starbucks’ top exec for international markets resigned and will be replaced by John Culver. This year Starbucks closed more stores than it opened, but for 2010 it looks at opening 200 new stores internationally. Given the limited success in some markets in the past (such as Austria or Australia), the hope may be that Culver will provide the leadership to make this happen.