Cars for emerging markets

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Since the start of the 21st century, the car market has knew a very important expansion with the apparition of the BRIC’s which the most important emerging countries. In comparison to the 20th century more economies are able to consume and particularly to increase the comfort. In this case study we will focus on two members of the BRIC’s (India and Russia). That is why the topicof this case study is entitled cars for emerging markets. Those countries are more and more powerful their population has more and more the possibility to consume. Moreover, we observe that local companies are developing in those two countries and American companies have to adapt them if they want to get market share (offer, structure, communication, prices, models…) in those emancipatingcompetition. In first part, it will be important to talk about the similarities and differences between the car market in India and in Russia. After the comparison between each market, I will give you my opinion about which market is the most difficult for American companies. To finish, I will talk about pros and cons of Ford’s model invention strategy and GM’s joint venture strategy. We can ask thisquestion: are American brands able to understand emerging markets to conquest new market share?


To start I will give you a description of the Indian and Russian car market. Russia is poised to overtake Germany this year to become Europe's largest automotive market by vehicles sold. The surging price of oil has revitalized the country's economy, providing many Russians the meansto buy foreign-made cars. Meanwhile, rising fuel costs have made car ownership more expensive in Europe and the U.S., where sales are stagnating. Car sales in Russia rose 41% in the first half of 2008 to 1.65 million, with a total value of $33.8 billion. The number of new-car registrations in Germany, but that Russia's total includes used imported cars. Russia has become a priority market formajor car makers in recent years. Volkswagen AG of Germany and PSA Peugeot-Citroën SA of France are the latest auto makers to open factories in Russia and to take advantage of tax exemptions on locally assembled cars. Russia's emerging middle classes have been snapping up cars such as Ford Motor Co.'s Focus and Renault SA's Logan. Each model had sales of more than 30,000 vehicles since January.Russians bought 1.1 million foreign cars in the first half of the year, up 47% from a year earlier, according to the Association of European Businesses. In June, Russians bought 202,309 foreign vehicles, up 44% from a year earlier. The figures include the sales of foreign-branded cars produced in Russia. Of the top five best-selling models in the first half, three are locally produced. After all thesedata, we can say that Russian market is very dynamic since 2008. After analyzing the several brands established in Russia, we can say that a middle class is appeared in Russia and European brands like Renault, Citroen, and Volkswagen have the good profile for this type of consumers. They represent a big competition for American brands like ford or General Motors. This country is key for Americancompanies which need to found new markets after the economic issues of the last past years. Thanks to its numerous populations Russia is a very promising market.
The Indian market is totally different than the Russian market because of the cultural and economic differences. Indeed, Indian population is one of the poorest of the world: $1000 a year. Tata Motors, Maruti Suzuki and Mahindra andMahindra are some of the India car companies which have expanded their domestic and international business. The strong economic growth led to expansion in the domestic automobile market. It has attracted huge amounts of investment from multinational automobile companies. India is now one of the world's largest manufacturers of small cars. New York Times has stated that due to the India's strong...
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