Business Case Studies, Market Entry Strategies Case Study, Geely, American Venture

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Case Title:

Geely: The Chinese Car’s American Venture

Publication Year : 2006

Authors: Gayathri, Doris John

Industry: Automobiles

Region:China US

Case Code: MES0047C

Teaching Note: Available

Structured Assignment: Not Available

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Abstract:

Geely Automobile Holding Co Ltd. (Geely), the Chinese automaker decided to enter the US auto market by 2007. In pursuit of this ambition and to make a mark internationally, Geely participated in two of the five major international auto shows, namely, the Frankfurt International Motor Show in September 2005, followed by the North American International Auto Show in January 2006 at Detroit.

Automobile industry analysts felt that the major challenge for Geely would be to conform to the quality standards of the American market. Geely said that it was aware of the high quality, safety and emission standards of the US market and reported that it was taking the necessary steps in this regard. Geely would also have to compete with the established players in the US Auto industry. The US Auto industry was itself under threat from the foreign automakers, as the Japanese and Korean brands had eaten into the market share of Ford and GM. Under these circumstances, it was to be seen if Geely with relatively low-priced cars would succeed in its US venture.

The case allows for discussion on the challenges faced by the Chinese car to enter the US market and the strategies adopted by them to compete with the established players there. It also offers scope for discussion on issues faced by the Chinese car relating to the low quality perception that the American consumers had towards Chinese cars.

Pedagogical Objectives:

  • Entry strategies of a new foreign player in a mature market
  • Strategies for successful market launch
  • Strategies to counter negative consumer perceptions
  • Counter measures to be adopted by existing established players in the market.

Keywords : Geely; China; Automobile Industry; Li Shufu; Chinese cars; US Auto Market; Economy cars; Market Entry Strategies Case Study; International Auto shows; Sedans; US venture; Global Strategies; Global entry; business expansion; Korean automakers; US Testing standards

Contents : 
Introduction
Background
US Auto Industry
Geely’s strategies and challenges for entry into the US
The Road Ahead
Company Structure
Annual and monthly sales volume
Financial Statement of Geely Holdings
Car models of Geely

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