Shanghai Automotive Industrial Corporation's Strategies for Global Expansion

China is predicted to become the second largest auto market in the world by 2010 and to have a market as large as that of the US (the world's largest car market) by 2025. SAIC's strategic intent was to become one of the top six auto companies in the world along with GM, Toyota Motor Corp. (Toyota), Ford, DaimlerChrysler AG and Volkswagen. (Refer Exhibit III for SAIC's position vis-à-vis competitors). To achieve this position, the company would have to sell over three million units a year. Considering that in 2003, SAIC ranked 17th globally in terms of unit sales, this seemed overambitious. But some analysts believed that this target was realistic for SAIC...

SAIC was one of the most successful auto companies in China and the best candidate for global expansion in the Chinese automobile industry. By 2004, the company had already begun taking aggressive steps that suggested an early international launch. An international shares issue to raise $1.5 billion was also on the cards. (The company had initially planned to list its shares in 2005 on the Hong Kong and New York stock exchanges, but later announced that the issue was unlikely to happen before 2006). The money raised from the public issue was to be used to upgrade production facilities and R&D in China. Other strategic acquisitions within China and abroad were also considered likely...