The scandal which involved the company has been influencing the car market and the company has lost value and money that we could see the direct impact in the following table which shows the trend of VW’s stock which has had a dramatic decreased after the cheat emission: The company has cheating the emission tests by making its cars seems less pollution than they are which affects at least 11 million cars worldwide which are 5 models in particular: Jetta, Beetle, Audi A3,Golf and Passat. Certainly, this impact has influenced not just the financial markets but the reputation of company too.THE EXTERNAL ANALYSIS Automotive world market: The automotive market has considerably suffered from the 2008 crisis, including Western markets. But today the automotive world market was able to recover and automotive industry has-been enjoying a period of relatively strong growth and profitability. It has now caught up and exceeded the pre-crisis level. The sale of passenger cars continues to rise, reaching in 2013 more than 80 million cars sold
4.2. Ford 's type of turnaround After a long time Ford recognized first in the year 2000 a decline of sales figures and increasing costs. At this time Ford focused more on the production and selling of Pickups and SUV´s. Because of the rising fuel prices the customer demand declined. Customers are now interested in low fuel consumption cars of the small and middle class.
Economic environment during the deal period Another key reason for this deal to be attractive for Tata Motors was the economic downturn of 2008. It impacted the automotive industry in a big way and remained till 2010. The crisis primarily affected America and Canada but the impact was global. The fuel prices skyrocketed, discouraging the demand of big fancy luxury or high performance cars. Trend changed towards frugal cars and small to medium sized cars became the preference for majority of buyers.
The brand credibility also could have added to Toyota greatly underperforming in the United States. “Toyota’s fiscal second-quarter profit in North America declined over 3%” (Document E). If Toyota does not take action, their sales profits might decrease exponentially and they may not be able to recuperate. Toyota’s underperforming also contributes to the fact that the company itself has had major financial losses over the years. As shown in Document E, “..., an emerging-markets slowdown and sluggish North American profit”.
Literature Review As have been mentioned before most of the Internalization Theories are based on developed countries, while it is hard to apply them for developing countries like China without apparent discrepancies. There is a lot of literature, describing the process of entry modes to foreign countries broadly. However, there is not specific theories and literature explaining process of entry mode decision by MNEs especially to China. All foreign automotive enterprises have chosen the same entry mode to Chinese market. It can be explained in formal way by such literature as “The law and regulations prohibit or restrict the establishment of WHOEs in certain Industries”.
During this period, passenger cars were more perceived as novelty than a genuine need, breakdowns were frequent and rapid innovation had considerably reduced the product life cycle. But this era marks the beginning of mass production and the establishment of Henry Ford Motor
Chinese prefers face-to-face contact and less direct way of communication. Chinese are also less likely to express their personal point of views and knowledge on the products or service that they bought, and seek for information on the spotlight reviews. Therefore, the above behaviors are the main differences between Chinese and American regarding the cross-culture psychology when shopping online that online shop operators should take into account when operate their
Additionally the project bidding process creates little incentive for quality awareness, since it is mainly focused on price value rather than quality value. A change in order to shift the focus on quality criteria would require radical changes in the project awarding system to avoid price competition. Apart from the characteristics of the industry itself, cultural related reasons might have an impact too. TQM can only work on an environment where team work, constructive discussions and collaboration are part of the overall company policy. A lot of the Chinese traditional social structures do not include some of the modern approaches to improve team work between employees.
During the financial crises economic condition was not good, the sales of vehicles was down. The demand of luxury cars went down. Exchange rate between different countries differs on their economy. 3. Social factors Social factor is related to growth of population.
As a result of the recession in the economy the exports and imports of goods and services decreased dramatically. The above Graph shows the trend of exports, imports and Gross Domestic Product (GDP) of the members of the Organisation for Economic Cooperation and Development, or OECD. As is shown between 2008 and 2010 there was a sharp decrease in percentage of imports and exports level and world Gross Domestic Product. As a result of that decrease in 2008 165 container ships were unemployment with the biggest casualties to the ships of 1,000 teu 2,000 teu capacity (Figure