The Japanese carmaker was a latecomer to the China market. Within its global strategies, North America is the top priority, followed by its home country Japan.

China has been included in Toyota's top development strategy in recent years with its first China-made VIOS sedan produced in Tianjin in October 2002.

Considering China is an immature auto market, the company has adopted a three-stage development plan -- first to establish a local sales network and launch brand promotions, then to build auto parts manufacturing bases, and, finally, to establish joint ventures (JVs) with local players and produce automobiles.

About 57 percent of respondents said Toyota adopted the right strategy for expansion in China and avoided possible risks.

Although a latecomer, Toyota has jumped to the front in terms of imported car volume -- 50,000 units annually. It has 57 JVs and wholly funded auto parts companies scattered across China.

Now, the company is stepping into the most important and critical stage -- speeding up the localization of its products, since its rivals, such as Honda and General Motors, are accelerating their penetration into China.

After the market entry of the Prado and Land Cruiser with China's First Automobile Works, its new product with Guangzhou Automobile Manufacturing Co -- Camry, which was a great success in the Untied States -- is also being developed.

About 80 percent of the respondents predicted Toyota will continue its brilliant performance in the US market, since the company has established a far-reaching sales network (35.6 percent) and its product brands are highly recognized by Chinese customers (52.9 percent).

However, there are also unsatisfactory results of the development strategy. Seventy-five percent of the 104 senior company managers surveyed said Totoya only wants to sell cars in China, but does not want to share technological know-how.

Some 40.4 percent of respondents said the company does not give enough attention to China market.

Forbes magazine commented on Toyota's success in the US auto market, saying that once the company sets goals, it will manage to exceed the targets. What is more challenging to its rivals is Toyota's strategy to realize these goals.

That assessment may well apply to its China expansion. Although Toyota missed the first opportunities, it will likely catch up if it pays more attention to the China market and introduces high-end brands.

General Motors

US-based General Motors' (GM) navigation in China was very smooth and successful during its first five-year period.

The 101 senior corporate managers surveyed -- who are keen observers of China's auto market -- spoke highly of GM's China strategies.

They mainly contributed GM's success in China to three factors:

l       First, the company had a good start when it entered China. Shanghai GM -- a joint venture between GM and the Shanghai Automotive Industry Corp (SAIC) -- invested up to US$1.5 billion in 1997 to produce Buick and GM promised to release a new model every year afterwards;

l       Second, GM formed strategic cooperation agreements with local partners. Its alliance with SAIC enables GM to develop rapidly and smoothly in China. In 2002, GM, together with SAIC and Shanghai GM, purchased Yantai Bodyshop Corp for 1.44 billion yuan (US$173.9 million). Later that year, GM and SAIC signed an agreement with Wuling Automotive in South China's Guangxi Zhuang Autonomous Region to establish a joint venture; and

l       Third, GM's success was not only because of its sales power, but also thanks to its good public relations.

After its first success, what will be GM's next five-year strategy?

Respondents said GM will challenge Volkswagen to acquire the biggest market share in China (45 percent).

About 26 percent of respondents predicted GM will enhance its research and development as well as manufacturing ability in China.

After GM builds China into its Asian flagship market, the company will then expand into Japan.

Some managers surveyed said GM will try to acquire a controlling stake in its cooperation with local partners (23 percent).

As for the company's sales networks, 24 percent of respondents said GM will expand its application of the "GM World" sales strategy.

The one-station sales-service networks will become GM's major sales promotion strategy in the Asia-Pacific. Every station streamlines auto products sales -- including Cadillac, Hummer, Oldsmobile -- financing services and after-sales services.

This sales model was accepted by 85 percent of respondents. About 58 percent of people surveyed like this model, and about 10 percent said this model will negatively affect GM's general image.

The survey indicated, on the whole, GM's expansion in China has been very successful. However, GM needs to clarify its brand positioning and image in China.

Ford

Despite being one of the world's top auto manufactures in the world, Ford has had a bumpy ride in China.

First, its cooperation with Dongfeng Motor was aborted. Then its Shanghai project unexpectedly went to GM. Finally, its cooperation with Jiangling Motor Corp gave Ford a taste of the China market, but it still failed to access the mainstream family auto market -- which is the most lucrative piece of China's auto market pie.

Its history turned to a new page only when the Fiesta was launched after Ford established a JV with Chongqing Chang'an Automobile Co.

However, the auto giant has missed the best opportunities in China.

Thirty-seven percent of the respondents said Ford chose the wrong product to launch in China. Fiesta has not been warmly welcomed by local consumers. And 21 percent of people surveyed thought poor timing was a factor, because Fiesta was besieged by price wars at the time of its launch.

Others attributed Ford's failure in China to improper strategies in initial stages (26 percent), wrong partners (10 percent) and the company's conservative attitude (13 percent).

Now, competition is becoming increasingly fierce in China's auto market. How can Ford re-establish itself here?

Respondents suggest Ford must introduce more brands (27 percent), adopt prudent investment strategies (25 percent), and seek new local partners and change its overall China blueprint (23 percent).

Regardless of its expansion plan, Ford still has a long way to go in China.

(China Business Weekly October 22, 2004)