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Commercial Vehicle Joint Venture Must Strengthen Cultural Integration
In recent years, numerous domestic commercial vehicle manufacturers have formed joint ventures with multinational corporations. Notable examples include the collaboration between Volvo and CNHTC, as well as the partnership between Dongfeng and Nissan. These alliances have drawn considerable attention. However, successful joint ventures that truly create a "1+1>2" effect 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 vehicles do need technological improvements. However, as a developing country, China cannot simply adopt the highest-level technologies without considering their practicality. A joint venture does not always require introducing cutting-edge technology to the market. Instead, it should align with local market demands, leverage the strengths of existing brands, and maintain competitive pricing to ensure success. Many failed joint ventures have focused too much on technology transfer, which leads to high costs, inflated prices, and ultimately, loss of market share.
The failure of some commercial vehicle joint ventures can often be traced back to difficulties in integrating Chinese and Western cultures. For instance, SAIC Iveco Hongyan has successfully combined elements from both cultures. However, not all collaborations have been as smooth. A diesel company in Shanghai once attempted to establish a joint venture with a Western partner but failed due to poor cultural alignment.
According to Xu Xingyu, former chief engineer at FAW Group, FAW had initially aimed to collaborate with Mercedes-Benz to produce commercial vehicles. The plan involved launching three brands together: FAW’s “Jiefang†(Liberation), a mixed brand, and the Mercedes-Benz brand. However, a major conflict arose: FAW wanted to use Mercedes-Benz’s strength to compete against other strong rivals, while Mercedes-Benz sought to strengthen its own brand presence, insisting that there would be no joint brand under the FAW name. Additionally, FAW wanted to use an existing factory, while Mercedes-Benz preferred to build from scratch. As Xu Xingzhao noted, these cultural misunderstandings led to the collapse of the partnership, turning what was once a promising deal into a mere illusion.
Xu Xinglu believes that the breakdown in negotiations between FAW and Mercedes-Benz was largely due to cultural differences. While Chinese and Japanese cultures are similar and communication is relatively straightforward, interactions with Europeans and Americans—especially Germans—are more challenging. Germans tend to be less flexible and unwilling to compromise. That said, once an agreement is reached, they are reliable partners who offer strong complementarity with Chinese companies.
It is clear that as China’s commercial vehicle companies continue to expand globally, effective communication and mutual understanding with partners are crucial. Thanks to 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 objective and hard to change quickly. Therefore, Chinese automotive companies must strive to understand their foreign partners' cultures and allow this cultural fusion to become a driving force for successful economic cooperation.