Title: Geely: a trajectory of catching up and asset-seeking multinational growth

Authors: Giovanni Balcet; Hua Wang; Xavier Richet

Addresses: Department of Economics, University of Turin, Campus Luigi Einaudi, Lungodora Siena, 100, 10024 Turin, Italy ' Euromed Management, BP 921, 13288 Marseille cedex 9, France ' Université de la Sorbonne nouvelle, 75005, Paris, France

Abstract: China became the largest world automobile market in 2009, following a decade of rapid growth. Foreign carmakers played a central role in bringing in technology, management know-how and marketing capabilities, as well as in building supply chains; while domestic companies, mainly central or local state-owned, established joint ventures with foreign carmakers, which took the lion's share of the Chinese market. However, in the late 1990s, some domestic private companies accessed to this market and experienced rapid growth. In order to discuss the catching up and internationalisation processes of Chinese carmakers, and in particular the crucial relationship between the two processes, this paper focuses on the case study of Geely, which broke both industrial and institutional barriers to access this industry. It experienced various ways of catching up, including technology imitation via reverse engineering, product architecture innovation, and asset seeking acquisitions abroad; as well as various ways of international growth, including export, assembly abroad, market seeking operations, and (again) asset-seeking acquisitions abroad. This case study helps the understanding of catching up of Chinese firms, while offering insights into the competitive strategy of emerging multinationals. This paper explores jointly the trajectories of catching up and of multinational growth.

Keywords: China; automobile industry; asset seeking FDI; catching up; multinational strategies; foreign direct investment; carmakers; automotive firms; internationalisation; technology imitation; reverse engineering; product architecture innovation; international growth; multinationals; multinational enterprises; MNEs.

DOI: 10.1504/IJATM.2012.051361

International Journal of Automotive Technology and Management, 2012 Vol.12 No.4, pp.360 - 375

Published online: 20 Aug 2014 *

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