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JATCO Best in France Case Study

ES2 Group F

Y.Fukui, K. Datchimoorthy

A. Fremy, T. Wainwright

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1. Company

2. Market

3. France

4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

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

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1. Company

2. Market

3. France

4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

2. The Global Automotive Market

Daihatsu

Hino

Mazda

Isuzu

Fuji Jyuko

Suzuki

Ford

Nissan

Mitsubishi Daimler Chrysler

Opel

Peugeot

BMW

Seat

Rolls Royce

AudiV WG MToyota

Volvo

Jaguar

RenaultNissan D

Honda

51.1%

33.4%

22.5%

49%

51.1%

21%

36.8%

33.3%

34%

22.5%

99%

100%

100%

100%

100%

JAPAN USA EUROPE

JATCO 80% of JATCO shares haved been purchased by Nissan

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8. Costs

9. Benefits

10. Advice

2. Global Automotive Market - Consolidation

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

0 2,000 4,000 6,000 8,000 10,000 12,000

BMW

Fiat

Renault

Nissan

Hyundai

Honda

Peugeot

Daimler Chrysler

Volksw agen

Renault-Nissan

Toyota

Ford-Mazda

General Motors

Passenger Cars (000's)

Production Volume in ‘000’s Cars 2002

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6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

2. Global Automotive Market – Consolidation (2)

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4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

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”

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2. Market

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4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

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 …

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4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

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

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1. Company

2. Market

3. France

4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

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.

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2. Market

3. France

4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

4. Company’s Clients (ii) • 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

“Intelligent Powertrain System,responding to the diverse needs of

our customers worldwide”

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1. Company

2. Market

3. France

4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

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.

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4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

5. Objectives & Values (i)

Source: www.jatco.co.jp

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2. Market

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4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

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

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1. Company

2. Market

3. France

4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

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)

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1. Company

2. Market

3. France

4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

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.

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1. Company

2. Market

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4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

7. Adaptation to France (ii)

• Human Resource Development– Working globally as an expatriate is a necess

ary condition for further promotion to top management

– JATCO provides exchange programme with younger employees identified as excellent

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1. Company

2. Market

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4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

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

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1. Company

2. Market

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4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

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

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1. Company

2. Market

3. France

4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

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

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1. Company

2. Market

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5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

10. Essential Advice (ii)

• Local recruitment– Locality strongly affects recruitment of French

employees– Paris is the best place for recruiting excellent e

mployees, but labour costs are very high – Production cannot occur locally due to cost co

nstraint.– Even sales office in Paris is high cost

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1. Company

2. Market

3. France

4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

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…

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1. Company

2. Market

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4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

We thankWe 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

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1. Company

2. Market

3. France

4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

Other

• Appendix

- Questionnarries

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1. Company

2. Market

3. France

4. Clients

5. Objectives

6. Constraints

7. Adaptation

8. Costs

9. Benefits

10. Advice

Our TeamOur Team

Yasumitsu Fukui

Tim Wainwright

Alain Fremy

Kamal Datchinamoorthy

HEC class of September 2003HEC class of September 2003