JAC

Anhui Jianghuai Automobile Co., Ltd.

    Overview: JAC attacks the Passenger Car Division

    Anhui Jianghuai Automobile Co., Ltd. (JAC) was founded in 1964 and operated under the brand name Hefei Jianghuai Automobile Factory in former times. JAC is a state-owned company and is headquartered in Hefei, China. After its establishment, JAC was mainly focusing on the manufacturing of commercial trucks. Later, the company enlarged its product range and introduced MPVs and passenger cars in 2007. Nowadays, the passenger car division is the most lucrative divisions for JAC.

    In 2012, JAC manufactured 445,000 vehicles
    In 2010, JAC registered a growth rate of 42 percent, resulting in a market share of 2.5 percent in China. Only two years later, a decrease in manufactured vehicles is detectable and the numbers dropped from 490,000 in 2011 to 445,000 in 2012.

    The main competitors of JAC are all Chinese car manufacturers, in particular the ones that manufacture trucks, too. Examples are Donfeng Motor and Beijing Automobile Works.


    Internationalization Strategy: JAC - One of the leading Exporters in China

    JAC's key market is China, but in the last years the influence of overseas markets has increased. Until 2015, the company plans to sell fifteen percent of its vehicles to foreign countries.

    JAC made its first step towards internationalization in 1990, by serving the Bolivian market with its first trucks. Today, JAC's vehicles are available in more than 100 countries all over the globe, with South America as its main market. In 2011, the company exported 55,000 vehicles to this region. As a consequence of the outstanding role and the great growth opportunities of South America, the company decided to establish a factory in Brazil with estimated costs of USD 600 mn. Other emerging markets are Africa and Russia, where the number of vehicles exported by JAC is increasing, too.

    Altogether, JAC exported 70,000 vehicles in 2011, which indicates a growth rate of 207 percent. Thus, JAC ranked first in the export of light commercial vehicles and second in the export of passenger cars in the Chinese market.

    Export growth rate in 2011: 207 percent
    Furthermore, JAC cooperates with several foreign companies, including Hyundai Motors, Navistar International Corporation and NC2 Global. The NC2 joint venture was established to manufacture heavy duty trucks and parts, and the one with Navistar to develop new medium and heavy diesel engines.

    In the future JAC aims to achieve a sales volume of 1.6 million units to foreign markets by the end of the 12th five-year-plan. Furthermore, the company wants to convert the slogan "Made in China" into a quality statement.


    R&D and Intellectual Property: Innovation with the Five-Level System

    Through its R&D division, JAC follows a five-level system. The first level is represented by JAC's core enterprise and R&D center in Hefei, China. The second ones are R&D centers in Italy and Japan, which are mainly concentrating on design patterns. The third ones are co-established organizations which include learning, research and production. Strategic overseas alliances are the fourth level and the last one is represented by the technical departments of each business unit.

    With this five-level strategy, JAC strives to meet future trends and to develop new technological innovations. One of these R&D fields is the electric and hybrid technology, in which JAC aims towards taking the position as pioneer.

    The following charts show the distribution of JAC's patent and utility model applications. The main difference between a patent and an utility model is the durability and the strength of protection. Patents are protected for twenty years, while utility models are only protected for ten years. Thus, an utility model can be described as a weaker form of patent.

    JAC filed its first patent and utility model applications in 2003. After only a small number of applications between 2003 and 2006, JAC filed more than 50 patent and utility model applications for the first time in 2007. In the following years the high level was kept and even the financial crises did not have a significant influence on the registered applications. Thus, the maximum to date was reached in 2010 at a level of 85 patent and utility model applications.

    The next chart represents the distribution of JAC's patent and utility model applications geographically. The company exclusively filed applications in its domestic country, China. This is surprising, as JAC operates R&D centers in Italy and Japan, too.

    The next two charts illustrate the different technology sectors in which the company applied applications. JAC filed most of its patent and utility model applications in the transportation sector, followed by the sector motors, engines, pumps and turbines and mechanical elements. These three sectors account for 80 percent of all applications, which is very typical for a company operating in the automobile industry. Another peculiarity is the high percentage of utility model applications. JAC prefers a smaller effort and therefore abdicates a stronger protection.


    References:

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