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JATCO Best in France Case Study ES2 Group F Y.Fukui, K. Datchimoorthy A. Fremy, T. Wainwright 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)

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jatco best in france case study

JATCO Best in France Case Study

ES2 Group F

Y.Fukui, K. Datchimoorthy

A. Fremy, T. Wainwright

1 the jatco company
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
2 the global automotive market

JAPAN

EUROPE

USA

99%

51.1%

G M

V W

Audi

Toyota

Daihatsu

33.4%

Hino

100%

Rolls Royce

49%

Isuzu

100%

21%

Seat

Fuji Jyuko

51.1%

100%

BMW

Honda

Suzuki

Opel

33.3%

Peugeot

Mazda

Volvo

Ford

100%

22.5%

Jaguar

22.5%

36.8%

Nissan D

Nissan

Renault

34%

Mitsubishi

Daimler Chrysler

JATCO

80% of JATCO shares haved been purchased by Nissan

2. The Global Automotive Market
2 global automotive market consolidation
2. Global Automotive Market - Consolidation

Production Volume in ‘000’s Cars 2002

  • Consolidation on a massive scale has produced “Super League”
  • 6 groups now provide > 85% of worldwide sales
  • Consequently, Automotive Suppliers have had to respond
3 why france i
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”
3 why france ii
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 …
3 why france iii
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

4 company s clients i
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.
4 company s clients ii
4. Company’s Clients (ii)

“Intelligent Powertrain System,responding to the diverse needs of our customers worldwide”

  • 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
4 company s clients iii
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.
5 objectives values i
5. Objectives & Values (i)

Source: www.jatco.co.jp

5 objectives values ii
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

6 constraints in france
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)
7 adaptation to france i
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.
7 adaptation to france ii
7. Adaptation to France (ii)
  • Human Resource Development
    • Working globally as an expatriate is a necessary condition for further promotion to top management
    • JATCO provides exchange programme with younger employees identified as excellent
8 key constraint costs
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
9 key benefits of being in france
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
10 essential advice i
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
10 essential advice ii
10. Essential Advice (ii)
  • Local recruitment
    • Locality strongly affects recruitment of French employees
    • Paris is the best place for recruiting excellent employees, but labour costs are very high
    • Production cannot occur locally due to cost constraint.
    • Even sales office in Paris is high cost
10 essential advice iii
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…
we thank
We 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

other
Other
  • Appendix

- Questionnarries

our team
Our Team

Yasumitsu Fukui

Tim Wainwright

Alain Fremy

Kamal Datchinamoorthy

HEC class of September 2003