Emerging Markets, Emerging Opportunities
Strategies for automotive partnerships in today’s global marketplace
Increasing globalization of the automotive industry is changing the dynamics of traditional strategic partnerships, particularly cross-border joint ventures (JVs) between Western companies and their cohorts in emerging markets. Outside of basic market entry requirements, strategic partnerships today are becoming more focused on addressing a specific need, such as gaining access to a new technology, quickly securing a local presence to cost-effectively serve stakeholders and customers, collaborating on product development initiatives while sharing capital risk, and accessing highly skilled and/or low-wage workers.
Emerging markets, emerging opportunities
This latest article examines how the nature and structure of automotive strategic partnerships have changed, and discusses what executives should consider when weighing the pros and cons and evaluating the details of establishing new relationships. It also explores important challenges and issues to consider before entering into a strategic partnership, including:
- Governance and cultural tension
- Accounting uncertainty
- Tax inefficiencies
- Conflicting partner expectations
- Operational complexities
- Confidentiality issues
- Valuation considerations
- When it is time to unwind the relationship.
Check-out the strategies for automotive partnerships, by downloading and reading the attachment.
Ultimately, as in all new business undertakings, each company must weigh the potential benefits of the partnership against potential risks.
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