Post on 21-Jun-2015
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JATCO Best in France Case Study
ES2 Group F
Y.Fukui, K. Datchimoorthy
A. Fremy, T. Wainwright
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1. Company
2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
1. The JATCO Company
• Core business:– Development, production and sales of Automatic
Transmission (AT) systems to automotive manufacturers
– Sales: Yen 401,109 million (FY 2002)
– Employees: 7,831 (Sept. 2003)
• When it started French operations?– April 1, 2002– To date activities have been limited to gathering
information– Currently opening European Marketing HQ in Paris
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1. Company
2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
2. The Global Automotive Market
Daihatsu
Hino
Mazda
Isuzu
Fuji Jyuko
Suzuki
Ford
Nissan
Mitsubishi Daimler Chrysler
Opel
Peugeot
BMW
Seat
Rolls Royce
AudiV WG MToyota
Volvo
Jaguar
RenaultNissan D
Honda
51.1%
33.4%
22.5%
49%
51.1%
21%
36.8%
33.3%
34%
22.5%
99%
100%
100%
100%
100%
JAPAN USA EUROPE
JATCO 80% of JATCO shares haved been purchased by Nissan
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7. Adaptation
8. Costs
9. Benefits
10. Advice
2. Global Automotive Market - Consolidation
• Consolidation on a massive scale has produced “Super League” • 6 groups now provide > 85% of worldwide sales• Consequently, Automotive Suppliers have had to respond
0 2,000 4,000 6,000 8,000 10,000 12,000
BMW
Fiat
Renault
Nissan
Hyundai
Honda
Peugeot
Daimler Chrysler
Volksw agen
Renault-Nissan
Toyota
Ford-Mazda
General Motors
Passenger Cars (000's)
Production Volume in ‘000’s Cars 2002
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7. Adaptation
8. Costs
9. Benefits
10. Advice
2. Global Automotive Market – Consolidation (2)
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7. Adaptation
8. Costs
9. Benefits
10. Advice
3. Why France (i)?
• The merger of Renault and Nissan– 1998 Renault gained 36% of Nissan– JATCO forced to respond
• Global change of business structure– Automobile Industry consolidation– Six major groups emerging– Global manufacturers need global suppliers– JATCO need to globalize fast to serve this
new “Super League”
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6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
3. Why France (ii)?
• Growth in outsourced AT Market– Until recently, automobile manufacturers produced
transmissions in-house– However:
• (i) new requirements to develop ever more advanced technologies (fuel efficiency, exhaust emissions and new intelligent transport systems), and
• (ii) globalization and new types of transmissions being rapidly developed
– Result: No longer viable for automobile manufacturers to produce transmissions by themselves
• AT Penetration in Europe– AT is not major in France or Europe– However, AT sales are growing fast …
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5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
3. Why France (iii)?
• Potential growth in the future – Potential growth in Europe
– JATCO plan to sell AT in France & Europe to ‘French’ manufacturers
– JATCO do not intend to produce here
Source: www.jatco.co.jp
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2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
4. Company’s Clients (i) • European clients?
– Renault– Peugeot (potentially)
– In addition, in Europe JATCO also supply:– Nissan Motor Co Ltd– BMW AG– Land Rover Group Ltd– MG Rover Group Ltd– Jaguar Cars Ltd– London Taxis International– Ford-Werke AG– Ford Motor Company Ltd
– And, in reality, dealerships and end users are also clients.
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4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
4. Company’s Clients (ii) • Clients expectations
– Excellent quality
– Excellent service
• Plus:– New technology such as Continuously Variable Transmission
(CVT) or Step AT that deal with environmental issues
– Timely development and provision of products; development, production and distribution knowledge
“Intelligent Powertrain System,responding to the diverse needs of
our customers worldwide”
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5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
4. Company’s Clients (iii)
• Obstacles to serving clients– Language:
• Key obstacle for JATCO to satisfy clients demands
• French is a hurdle for a Japanese
– Communication• Communicating with dealerships providing
technical services.
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5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
5. Objectives & Values (i)
Source: www.jatco.co.jp
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5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
5. Objectives & Values (ii) “Provide the highest satisfaction to customers, contribution to
shareholders, and good relationships with society (global environment and communities) and
materializing growth and prosperity with our clients”
Technology – JATCO will develop advanced technologies to comply with potential
customer demands and create and propose new values.
Quality– JATCO will pursue the highest quality to the satisfaction of
customers.
Cost – JATCO will offer competitive and appealing prices.
Trust – JATCO will provide customers with products to meet their potential
demands and attentive service to gain customers' confidence
Source: www.jatco.co.jp
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4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
6. Constraints in France
• French government– Treats foreign countries fairly, but provides
no additional support to Japanese companies– In Asian countries, governments welcome
investment, but not in France
• Visa issues– It takes more time to get working visa in
France than in other countries(e.g. England, Germany, USA, and other Asian countries)
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2. Market
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4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
7. Adaptation to France (i)
• Expatriate system– According to the merger of Renault and
Nissan, the expatriate system has been standardized.
– JATCO intends to cut expatriate incentives for Japanese because transfer to foreign countries are becoming ‘normal’, and it seeks to align the incentive system with that of Renault.
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5. Objectives
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8. Costs
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10. Advice
7. Adaptation to France (ii)
• Human Resource Development– Working globally as an expatriate is a necess
ary condition for further promotion to top management
– JATCO provides exchange programme with younger employees identified as excellent
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5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
8. Key Constraint Costs
• Language– Language is a key constraint because few
Japanese command French – Language training will cost much and could
be a key constraint in France
• Development of French managers– Developing managers locally is a key issue
for their future growth – Technical Training costs would be a burden
to JATCO
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5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
9. Key benefits of being in France
• Market potential– AT is not currently popular in France– Expected future growth is opportunity
particularly in small / compact segments where there is increasing popularity of AT
• French Automotive Manufacturers
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4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
10. Essential Advice (i)
• Country or Region?– JATCO does not see market by country but by region– Paris and other French regions are totally different in
terms of attractiveness to Japanese expatriates– Standards of living from expatriate’s point of view is
very important– Education, culture, and local Japanese community are
typical requirements
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5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
10. Essential Advice (ii)
• Local recruitment– Locality strongly affects recruitment of French
employees– Paris is the best place for recruiting excellent e
mployees, but labour costs are very high – Production cannot occur locally due to cost co
nstraint.– Even sales office in Paris is high cost
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2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
10. Essential Advice (iii)
• French Government or Ministry– From experience in England and
Germany, there is no strong difference between France and other countries.
– However, French bureaucracy takes more time…
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5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
We thankWe thank
Name: Ryota Charlie Arai
Title: Director, Sales & Marketing
Company: JATCO France SAS
Address: 57, Esplanade du General de Gaulle
92081 Paris la Defence cedex
Tel: +33 (0) 1 46 96 56 34
Email: ryota.arai@jatco.fr
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4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
Other
• Appendix
- Questionnarries
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4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
Our TeamOur Team
Yasumitsu Fukui
Tim Wainwright
Alain Fremy
Kamal Datchinamoorthy
HEC class of September 2003HEC class of September 2003