Study about the presence of Renault and PSA, 2 french car manufacturers, in China and India. History, success and failures, analysis of local management and conflicts with french management.

1. 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

2. INTRODUCTION

4. SUMMARY
I. RENAULT IN CHINA
II.RENAULT IN INDIA
III.PSA IN CHINA
IV.PSA IN INDIA

5. 雷 诺
Thunder Promise
French car manufacturer in Asia
RENAULT IN CHINA

6. The RENAULT’s SITUATION
in CHINA
 First market of automobile in the world
 18.5 Millions vehicles sold in 2011:
2,55 M 2,25M 1,25M 1M ... 24 275
 Less popular in China

7. DEVELOPMENT
A FAILED JOINT-VENTURE
 1993.12 Sanjiang Renault
Automobile Company
 1994-2001(8 years): only a total of 4112 Trafic sold
 ---------2000 ----------------2002 -------2003--------------
 Sanjiang Renault Automobile Company stranded

8. DEVELOPMENT
A FAILED JOINT-VENTURE
 Problem of « Intra » Management :
→ Disagreement between the Chinese and French managers
 Chinese manager "non-cooperation"
 French manager "non-agreement"

9. DEVELOPMENT
A NEW COOPERATION
 2004, new cooperation with Dongfeng Montor Corporation
 New: production local in China in 2014-2016 expected

10. THE « REVIVAL PROJECT »
 2009, Renault (Beijing) Automobile Co. Ltd was founded
 Brand positioning: "Casual Luxury"
科雷傲 (Koleos) Renault’s sales in China

11. THE « REVIVAL PROJECT »
 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

12. French car manufacturer in Asia
RENAULT IN INDIA

13. RENAULT in INDIA
 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

14. RENAULT’s MANAGEMENT
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

15. RENAULT’s MANAGEMENT
in INDIA
Pulse (City car - Ultra Low Cost) Dacia Duster (Low Cost 4x4)
Koleos (Utility) Fluence (Sedan car)

16. 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

17. French car manufacturer in Asia
PSA IN CHINA

18. PSA in CHINA
HISTORY
 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

19. PSA in CHINA
HISTORY
 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.

20. PSA in CHINA
CHINA’S CAR CULTURE
 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

21. PSA in CHINA
INTERCULTURAL MANAGEMENT in CHINA
 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

22. PSA in CHINA
INTERCULTURAL MANAGEMENT in CHINA
• China tech is based in • Reasons why they must
Shanghai because of its adapt:
universities & It’is also a
car industry hub Climatic conditions
The government has
a lot of influence
Chinese taste in car
are not the same as
european taste

23. French car manufacturer in Asia
PSA IN INDIA

24. The INDIAN CAR MARKET
A 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 :

25. The INDIAN CAR MARKET
A dynamic but competitive market
The INDIAN CAR MARKET in 2011
4% 3%
Maruti-Suzuki
8%
Hyundaï
16% 49%
Tata Motors
M&M
20% Toyota
Honda

26. PSA IN INDIA
A long and difficult story
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.

27. PSA IN INDIA
A 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.

28. PSA IN INDIA
A 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.

29. INTERCULTURAL MANAGEMENT IN INDIA
A management considerably influenced
by strong values
• 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

30. INTERCULTURAL MANAGEMENT IN INDIA
A 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

31. CONCLUSION

32. CONCLUSION