Critiques Case

Gao, Paul. "A global road map for China's automakers." McKinsey Quarterly; 2008, Issue 3, p90-98, 9p

This author Paul Gao talks about "A global road map for China's automakers." Gao describes about china's automakers have advantages and great opportunities, they grow fast but lose focus. Summaries are China should improve their quality level, organizational collaboration and focus strategies. They should improve beyond production such as marketing and mentality. Gao is very credible, he is the principal of Mckinsey in Shanghai office. This article is from J.D. Power & Associates Inc. I totally agree with Gao that China is not ready for globalization because Global standards are not met, lack strategic focus, China should extends their mentality to a global dimensions. Gao provides strong evidences and facts from an insider and global perspectives.

Global standards can be different from country to country; U.S, Europe, and German have high standards and they are globally recognized. Gao uses almost all these international automobile standards to point out the deficiency of China automobiles. Gao evidences that Chinese average car problems are almost twice the U.S and locally built international brands. This is an "outstanding" number that gives scary implications for consumers. This implies these consumers may have car accidents twice the other countries. He also mentions that, "In safety tests conducted by independent agencies in Europe and elsewhere, Chinese carmakers, including Brilliance and Jiangling Motors, fared terribly." Gao provides a very strong evidence shows these safety tests are unbiased and independent because it is conducted by independent agents. These tests show China automobile do poorly, it gives alert to China that their cars have quality problem. China should first pay attention to safety. Global standards are the best indicators show China is not ready to go global.

Good strategic focus can result greater efficiency and better outcomes. Without strategic focus on target market, companies may get disappointing result. Gao examples that there are two Chinese carmakers misjudge important market characteristics, they did not offer diesel engines, which power about half of Western Europe's passenger cars. Also, one of them targeted a declining category--Sedan-D; they only sold 150 cars in Europe in 2007 which is far below their expectation. Gao uses 150 cars sold in Europe to show how pathetic the result is when companies lose focus. He shows Chinese automakers did not do enough homework to acquaint what their target market needs--diesel engines. Going to international market is not just like doing business in China which is only one segment. I agree with Gao that China definitely need to have a different strategic focus if they want to go into different markets. China's current approach "one size