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From Joint Ventures to National Champions or Global Players? Alliances and Technological Catching-up in Chinese and Indian Automotive Industries

Balcet Giovanni () and Ruet Joël ()
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Balcet Giovanni: http://www.unito.it/unitoWAR/page/dipartimenti4/D031/D031_personale_batch_BasicBook_Docenti_IT7?id=181065
Ruet Joël: University of Turin, http://www.de.unito.it/

Department of Economics and Statistics Cognetti de Martiis. Working Papers from University of Turin

Abstract: The internationalisation of the automotive industry in China and India sheds light on the economic processes of emergence at large. This evolution in the car industry serves as an analyser of the relationships between industrial policies, industrial partnerships and paths of technological catching-up that are at the core of the phenomenon of emergence. The modes of endogenisation of technology have shifted from an all-over joint venture route towards the direct emergence of provincial players into the global scene and new forms of alliances. This evolution in the car industry serves as an analyser of the relationships between industrial policies, industrial partnerships and paths of technological catching-up that are at the core of the phenomenon of emergence. Chinese and Indian car companies are not only internationalising by selling abroad; they are internationalising by producing abroad and even, for some of them, globalising their production process through rethinking their whole supply chain, entering new value chains, or grasping global opportunities. This paper, based on interviews, examines different stylised business models for Chinese and Indian car companies, to ultimately question the theory of emerging market multinationals and of JVs. It does so by examining the following points: - the trajectories of Chinese and Indian carmakers, viz. their property status and relationship to the State (private vs. State owned; province of localisation) in a context of consolidating national champions; - modes of technological catching-up and innovation processes; - market mix strategies between a geographically fragmented (in China) or concentrated (in India) domestic market and a growing export performance combined with an early multinational production. The paper concludes on the different trajectories and on perspectives for joint ventures. We notably raise the hypothesis that joint ventures classically based on an exchange of technology for market access have exhausted their scope, and might now have to be based on an exchange of domestic market for international market, or are evolving towards different forms of governance.

Date: 2011-10
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