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Commercial Vehicle Joint Venture Must Strengthen Cultural Integration
In recent years, many domestic commercial vehicle manufacturers have entered into joint ventures with global automotive giants. Notable examples include the partnership between Volvo and CNHTC, as well as the collaboration between Dongfeng and Nissan. These alliances have drawn considerable attention. However, joint ventures that truly achieve a "1+1>2" outcome remain rare. The author argues that for such partnerships to succeed, there must be a stronger integration of Chinese and Western cultures.
Yu Zhuoping, Dean of the School of Automotive Engineering at Tongji University, points out that China’s commercial vehicle industry does need to enhance its technological capabilities. However, as a developing country, China cannot simply adopt the most advanced technologies without considering local conditions. A successful joint venture should not necessarily bring in the highest-end technology but should instead adapt to the Chinese market. By leveraging the strengths of existing brands and maintaining reasonable pricing, companies can gain a competitive edge. Many failed joint ventures have focused too much on technology transfer, leading to high costs, inflated prices, and ultimately, a loss of market share.
The failure of some commercial vehicle joint ventures often stems from difficulties in integrating Chinese and Western cultures. For instance, SAIC Iveco Hongyan is one example where cultural fusion has been attempted, though not always successfully. Another case involved a Shanghai-based diesel company that tried to establish a joint venture with a Western partner, but the effort collapsed due to poor cultural alignment.
According to Xu Xingyu, former chief engineer at FAW Group, FAW once aimed to form a joint venture with Mercedes-Benz to produce commercial vehicles. Initially, FAW was enthusiastic about launching three brands together: its long-standing “Liberation†brand, a new “mixed†brand, and the Mercedes-Benz brand. However, a major disagreement arose. FAW wanted to use Mercedes-Benz's strength to compete against other strong rivals, while Mercedes-Benz sought to use FAW to strengthen its own brand presence—without allowing FAW to operate under the Mercedes name. Additionally, FAW wanted to use its existing factory, whereas Mercedes-Benz preferred building a new facility from scratch. Xu Xingzhao remarked, “Cultural differences led to many misunderstandings, and the cooperation eventually turned into a bubble.â€
Xu Xinglu believes that the breakdown in negotiations between FAW and Mercedes-Benz was mainly due to cultural differences. While Chinese and Japanese cultures are similar and communication is relatively smooth, interactions with Europeans and Americans, especially Germans, are more challenging. Germans tend to be less flexible and unwilling to make concessions. That said, once an agreement is signed, they are known for being reliable and having strong complementary strengths with Chinese partners.
It is clear that as China's commercial vehicle companies continue to expand globally, effective communication and mutual understanding with their international partners are essential. With advancements in transportation and communication technologies, global integration has accelerated, and cross-cultural exchanges have become more frequent. Yet, cultural differences between China and the West remain a reality that cannot be quickly eliminated. Therefore, Chinese auto companies must quickly adapt to and understand their partners’ cultures, allowing the blending of these cultures to serve as a driving force for economic cooperation.