MULTICULTURAL MANAGEMENT

The car manufacturers in Asia : the example of PSA and Renault in China

and India

Xiao Xiao LI, Loulou TANG, Mickael KHENKITTISAK & David RODRIGUEZ

INTRODUCTION

SUMMARY

I.RENAULT IN CHINA

II.RENAULT IN INDIA

III.PSA IN CHINA

IV.PSA IN INDIA

RENAULT IN CHINAFrench car manufacturer in Asia

雷 Thunder

诺 Promise

First market of automobile in the world

18.5 Millions vehicles sold in 2011:

2,55 M 2,25M 1,25M 1M ... 24 275

The RENAULT’s SITUATION in CHINA

Less popular in China

1993.12 Sanjiang Renault Automobile Company

1994-2001(8 years): only a total of 4112 Trafic

sold ---------2000 ----------------2002 -------2003--------------

DEVELOPMENTA FAILED JOINT-VENTURE

Sanjiang Renault Automobile Company stranded

Problem of « Intra » Management : → Disagreement between the Chinese and French managers

Chinese manager "non-cooperation" French manager "non-agreement"

DEVELOPMENTA FAILED JOINT-VENTURE

2004, new cooperation with Dongfeng Montor Corporation

New: production local in China in 2014-2016 expected

DEVELOPMENTA NEW COOPERATION

2009, Renault (Beijing) Automobile Co. Ltd was founded

Brand positioning: "Casual Luxury"

THE « REVIVAL PROJECT »

科雷傲 (Koleos) Renault’s sales in China

Marketing: Import the high-grade models (Koleos, Mégane CC,

Scenic, Fluence, Latitude, Laguna) Improve the brand awareness (exposition, F1, etc) Expand the sales network Marketing of "Promise":

After-sale service - " Promise go hand in hand" Espace - "My Renault"

Management: New CEO :CHEN Guozhang (American-chinese) Communicate directly with the General Headquarters in

France : 2009 Committee of China 2011 A team special to the Chinese market 2011.3 Executive Committee of the Chinese Market

THE « REVIVAL PROJECT »

RENAULT IN INDIAFrench car manufacturer in Asia

2005 : Creation of a JV with Mahindra for the fabrication and the commercialization of Logan vehicles

Failure of the Logan in India because of a non-adapted model and a bad analysis of the fiscal market environment

2011 : Sells 49% to M&M and commercialize Fluence, Koleos

2012 : launch Pulse and Scala with Nissan

Coming soon : Duster

RENAULT in INDIA

Indian enterprise landscape and partnership :– Joint-venture with Mahindra and Nissan– Direct investments in Design Center– Network of car dealerships

Adapts its products and services :– Offers a Complete Care Package– 5 products for all the market segments– Adapts the size of its vehicles

RENAULT’s MANAGEMENT in

INDIA

Pulse (City car - Ultra Low Cost)

Dacia Duster (Low Cost 4x4)

Koleos (Utility) Fluence (Sedan car)

RENAULT’s MANAGEMENT in

INDIA

The « Jugaad » or Innovate faster, cheaper and better : the art to improvise with limited resources

Intern management :– Recruit, train, retain and promote– Very hierarchical and few participative

management

RENAULT’s MANAGEMENT in

INDIA

PSA IN CHINAFrench car manufacturer in Asia

1985 to 1997 : Joint venture between Peugeot and Guangzhou (GPAC)

Only 100,000 cars sold over its 11 year

Reasons of failure:1.Bus maker partner 2.Old fashioned cars 3.Government decision

PSA in CHINAHISTORY

2000 : creation of DPCA (Donfeng Citroen Peugeot automobile)

2001 : Peugeot returned to the chinese market

2011 : Joint venture between PSA et Changan automobile = develop high tech and ecological car.

Introduction of citroen DS and they will create their own brand.

PSA in CHINAHISTORY

Symbol of success for the chinese whereas in France it’s not really important.

Influence of the family: buy a car need the approval of the whole family (ganxi)

First car market in the world, the trend is luxury cars whereas in France the trend is compact & ecological cars

Only 4,5% of the population own a car

PSA in CHINACHINA’S CAR CULTURE

2008: China tech center (70 french among 700 employees)

Design office with 50 designers from France & China

Formation from french ingeniors (sharing the knowledge & technology of PSA)

Business trip to France to the headquarter in order to get much more knowledge

PSA in CHINAINTERCULTURAL MANAGEMENT in CHINA

• China tech is based in Shanghai because of its universities & It’is also a car industry hub

• Reasons why they must adapt:

◊ Climatic conditions

◊ The government has a lot of influence

◊ Chinese taste in car are not the same as european taste

PSA in CHINAINTERCULTURAL MANAGEMENT in CHINA

PSA IN INDIAFrench car manufacturer in Asia

The INDIAN CAR MARKETA dynamic but competitive market

One of the most dynamic car market of the world Almost 20% of growth

3rd asian car market and soon the 3rd world one

A GDP per hab which has doubled in 10 years, only 10 indians in 1000 have a car.

Strong development of the road network, 2 cars on 3 cost less than 8300€

…and relatively competitive : And soon :

49%

20%

16%

8%4% 3%

The INDIAN CAR MARKET in 2011

Maruti-Suzuki

Hyundaï

Tata Motors

M&M

Toyota

Honda

The INDIAN CAR MARKETA dynamic but competitive market

First presence in India during the 90’s : 309 model assembling contract with PAL

Failure of the project : low sales Peugeot leaves India in 1997.

PSA IN INDIAA long and difficult story

2nd missed opportunity in 2009 after a the failure of a capitalistic partnership with Mitsubishii.

September 2011 : PSA announced a new production site in Sanand, India

An agreement is signed with the Gujarat government for an expected initial investment of 650 millions of $. One audacious and risky strategy : launch a sedan car while other car manufacturer are only concentrated on small cheap cars.

PSA IN INDIAA long and difficult story

And today?

The project has been postponed in order to be re-examined, especially concerning the financial cost (650M$)

The solution? A potentiel local partnership (Tata? GM?) even if the indian car manufacturer deny any merger.

PSA IN INDIAA long and difficult story

• Even if the official caste system may be illegal, there is a strong hierarchical structure, based upon job title.

• Motto : “each person has a very distinct role within the organization, and maintaining that role helps to keep order”

• A somewhat paternalistic attitude and involvement in personal life

INTERCULTURAL MANAGEMENT IN INDIAA management considerably influenced

by strong values

• Approach to change : a medium tolerance for change and risk

• Quite careful about time guidelines in business situations

• Honor and reputation play an important role

• Indians are non-confrontational

INTERCULTURAL MANAGEMENT IN INDIAA management considerably influenced

by strong values

CONCLUSION

CONCLUSION