cost optimization in auto.industry

Cost Reduction in the Automobile Industry—Case Studies

of the Chinese

Market

University of Halmstad
School of Business and Engineering
Master ’s Programme
Master’

Cost Reduction in the Automobile Industry
—— Case Studies of the Chinese market
Studies

October 25, 2012
Authors: Xu Zhiran ------ 890212-T253
Zhou Mengxiao------ 890315-T432
Supervisor: Nataliya Galan
Examiner: Jonas.Gabrielsson i Cost Reduction in the Automobile Industry—Case Studies

of the Chinese

Market

Acknowledgements
This dissertation was written during the spring of 2012 at the Strategic Management and Leadership Program of Halmstad University.
We would like to express our gratitude towards our supervisor Nataliya Galan, for her essential guidelines and patient help. A special thanks also to the respondents of the companies who have helped us and offered us information that is necessary for completing this dissertation.

Halmstad, 2012
Zhou Mengxiao and Xu Zhiran

ii

Cost Reduction in the Automobile Industry—Case Studies

of the Chinese

Market

Abstract
Due to the global financial crisis, the European and US automobile market was confronted with a depression. At the same time, the Chinese automobile market maintained a good momentum of development, which attracted more attention and investment of overseas automobile enterprises. However, the competitive pressure has increased gradually with the growing number of overseas automobile companies in the Chinese market. There is a lot of research about how to increase the competitiveness of the automobile industry in China. This dissertation will focus on the reduction costs of automobile enterprises in the Chinese automobile market. Based on prior research we developed a tentative cost reduction model for automobile companies in the literature review, which includes entry strategies, manufacturing sectors and logistics. The tentative model provides a coherent framework and offers

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