Geely Automobile Essay

In the beginning part, the ECLIPTER f exerciseors including econography, culture, legal outline, income profile, giving medicational risk, r thus farue enhancement regime, re-sentencing cast and restrictions, together with the three-sided institutions such(prenominal)(prenominal) as WTO, EU and ASEAN al unhopeful be examined by utilize UK and Malaysia as examples. Then based on this analysis, it go forth cater an sound judgement of the lodges everyplace exclusively internationalistic expansion scheme and process. In the scrap part, legal system and income profile, the twain most conditional relationant ECLIPTER factors on Geely foreign operations, bequeath be evaluated.Further much, the scheme which Geely used to deal with the match of these two factors and leverage the quadripartite institutions depart be picturen. Finally, this report go away break apart whether the companys international adaptation of the business hold out is useful, and then give bo th(prenominal) recommendations and slight(prenominal)ons. 2. ECLIPTER Factors Analysis 2. 1 Econography Econography refers to physical and charitable as exercise sets including distance from major trades, and natural resources of nations that affect intentness performance.In the startle, the mop up distance among p atomic number 18nt company and overseas subsidiary can buoy attend the company to reduce the transport costs and overhead expenses it excessively can im launch the connection between them. If the p atomic number 18nt company is in china, it is better to build a subsidiary in Asia such as Malaysia. Secondly, the natural resources used for making railroad railroad cars mainly include steel, copper, and aluminum. If the ara owns rich lot mineral resources, it can greatly provide benefit in the proceeds of cable cars. single of the major purposes for many multinational corporations establishing overseas subsidiaries is to exploit the foreign natural resour ces.This is good for companies to 5 international duty purlieu II reduce return costs and get competitive goods. As creation Steel Association reported in 2009 that the crude steel mathematical product of join Kingdom is 13. 5 in 2008, whereas the crude steel production of Malaysia is 6. 1 in 2008. 2. 2 Culture This paragraph pass on analyze the effects of culture on machine perseverance through with(predicate) forcefulness distance list and saving rate. Firstly, power distance index measures the point in time of inequality exists in a society (Hofstede, 1997). The power distance index is 80 in Malaysia whereas it is only 35 in UK (Hofstede, 2008).The unequal dissemination of wealth makes most Malaysian citizens like to hold a mercantile motorcar. So the inexpensive Geely simple machine could be a good resource for them. Secondly, saving rate could be a example to show the bearing of citizens. The saving rate of Malaysia was 47 per cent in the year 1998 which ranks second in Asia (Azia, 2004). In contrast, the saving rate in UK was significantly natural depression, which was less than 10 percent in the past ten old age. For instance, the saving rate of UK household in 2008 was only 1. 7 percent (chart 1)(Presser, 2008). So UK citizens be apt to postulate a relatively high impairment car. map 1Resource from Posser (2008) 6 International railway line environs II 2. 3 sanctioned system The auto industry has been affected by laws and organisation regulations since the 1960s. The initial soundty act passed in 1966 by social inter degree and was called the National Traffic and tug Vehicle Safety Act (Highfill, 2004). This act forced lyingrs to improve the safety for the passengers, the driver visibility, and the braking of the car. Not only safety, only when in like manner environment is being growingly concerned even before the oil crisis. The Vehicle Air Pollution and Control Act passed in 1965 was the low act to set s tandards for locomote pollution.Then in the 1970s, Congress passed the smashing Air Act that led to a 90% decrease in gondola sack within the next six long time (ibid). In the 1970s the oil crisis led to the approval of The Energy Policy and saving Act of 1975 which stated that all autos must meet a trustworthy mileage per gallon. The act required that all automobiles had to meet a standard of 20mpg by the 1980 model and then 27. 5 mpg for the 1985 model (ibid). EU 2020 product system also emphasizes the afterwardsmathance of low carbon automobile (Society of Motor Manufacturers and Traders, 2010).There atomic number 18 also many special laws for auto industry in different countries, such as Malaysia, which has built a salve trade area for production and assembly of products for trade-oriented enterp bears. Companies can enjoy the negligible responsibilitys, raw materials and simplified mechanical equipment aftermath formalities. Nevertheless, the Malaysia governm ent regulates that more than 80% products should export to otherwise countries (Daily News, 2006). Furthermore, the UK Byers Acts Measures to cut the average determine of a car by ? 1,100 and save private car purchaseers around ? 1 zillion a year.Although it may lower the profit talent of auto industry, the number of consumers will increase gradually (DTI, 2000). 2. 4 Income profile Since automobile is not indifferent goods, the demand of automobile would rise when income increases. In the economic aspect, income could be an power of the purchasing power of individuals and nations. Data from UK national statistics office (2010) demonstrated that in spite of the contracted 4. 9 percent of gross domestic product in the whole year, the GDP increased 0. 4 percent in 7 International dividing line surroundings II the fourth quarter of 2009. Furthermore, Household expenditure also rose 0.4 percent in the fourth quarter of 2009 in UK (chart2). For Malaysia, the GDP growth in the fo urth quarter of 2009 was 4. 5 though the figure was negative in the whole year (chart 3) (Malaysia statistics, 2010). It can be observed that the economy of both UK and Malaysia seem to recover from the global pecuniary crisis. This positive signal predicts the growing demand and distensible securities industry for Geely in both countries. Chart 2 Resource from UK statistics 2010 Chart3 Resource from Malaysia statistics 2010 8 International military control Environment II The core competitiveness of Geely automobile relies on its high performance-price ratio.Per capital GNI (Gross national income) in Malaysia was 25784 RM in 2008. By analyzing the 2004 United Nations Human Development (UNHDP) report, except the 20% population of richest and poorest class, Geely will be a better election for the rest citizens in Malaysia(chart 4) (Lumpur, 2004). In comparison, the little people account for a great make sense of population in UK. A source from HMRC shows the average income of un der 20 years is ? 9,570 and 20-24 years is ? 13,200 which is below the average (chart 5). It implies that when young generation decide to buy a car, price is the first consideration factor.For medium quality car manufacture companies, young population in UK could be a potential steming of customers. Chart 4 9 International business organization Environment II Chart5 Median Age Band Under 20 years 20 24 ? 11,800 years 25 29 ? 17,000 years 30 -34 ? 19,500 years 35 39 ? 20,100 years 40-44 ? 20,200 years 45 49 ? 20,300 years Resource from Lumpur (2004) ? 28,600 ? 24,800 ? 35,400 ? 15,200 ? 20,100 ? 28,100 ? 24,600 ? 34,600 ? 14,900 ? 19,800 ? 26,800 ? 23,600 ? 31,700 ? 15,500 ? 20,100 ? 23,900 ? 21,600 ? 26,700 ? 16,400 ? 20,100 ? 19,300 ? 17,800 ? 20,600 ? 15,900 ? 17,800 ?13,200 ? 12,400 ? 13,800 ? 11,200 ? 12,300 ? 8,130 ? 9,570 ? 8,490 ? 9,810 ? 7,990 ? 9,250 Median Income Mean Income Income (Men) (Men) (Women) (Women) Income Income Income Mean Median Mean 2. 5 Political risk gibe to Guinger (2001), political risk describes the stability of government institutions. It can be measured in a variety of ways such as likelihood of foreign aggression and civil insurrection. The transparency International (2009) showed that UK and Malaysia both face some problems of political corruption, which adversely affects the energy of economic operation.World Bank estimates that corruption could cost Malaysia as frequently as RM10 10 International pipeline Environment II one million million a year an amount equivalent to 1 or 2 per cent of GDP. The corruption in the UK is lighter than Malaysia, which ranked 17, whereas Malaysia ranked 56 in world in 2009 based on Corruption Perceptions might 2009. But the corruption in UK is not unheard. Surveys by Control Risks and Simmons & Simmons show that the awareness of UK laws against foreign bribery may be decreasing over time.In 2002, after the act came into force, 68 percent of respondents give tongue to they were old(prenominal) with its main points. But in 2006, 48 percent people tell that they have totally ignored it (Global Corruption Report, 2009). 2. 6 Tax administration Tax regime refers to the appraise instruments that governments use to raise revenues from multinational firms, such as corporate taxes. The tax of Malaysia is transparent, the multinational corporate must be taxed 30% of the corporate income which is just the same as Malaysia companies Marketing directory, 2005) According to the tax incentive treaties, auto ( .industry may be entitled for pioneer status which is given by the way of an abatement of 70% of the profits for five years (ibid). The remaining 30% of the profits will be taxed at the prevailing corporate income tax rate. The profits abated are exempt from tax and will be available for distri onlyion as tax-free dividends. In UK the resident corporate tax is the lowest in Europe, even the tax is zero for the small companies in 2002(Lawandtax- mods, 2010). Ac cording to the tax treaties, multinational corporate which set up, purchase or control the companies in UK can follow the resident tax (Navstar, 2009).In the ordinary course of events, foreign companies cannot follow the low corporate tax, but with regard to look-alike taxation and the agreement between UK and China, Chinese multinational corporates in UK this instant pay the low tax (ibid). 2. 7 replace rate electrostatic trade policies are extremely instantant for both the economic social welfare of the countries and the multilateral trading system. Unfortunately, the liberalization measures were adopted by many countries. As Dornbuschs 1976 analysis has pointed out that when the exchange rate is used to provide protection for domestic firms, it is through undervaluation.An under wanted 11 International Business Environment II exchange rate protects domestic firms from imports and gives domestic firms greater incentives to export. For example, the balance of Payments Commit tee of the WTO has received 39 requests from extremity countries for derogations from their international obligations and for a momentary increase in temporary protection. Moreover, several growth countries, such as Malaysia, have recently increased tariffs in response to financial crises even though the higher rates remain below the rates these countries delimited in the WTO.Moreover the analysis said China has become a great auto exporter, as a result of the huge subsidies, an undervalued exchange rate and dirt-cheap credit (Swaminathan, 2009). 2. 8 Restrictions Restrictions refer to the taxes and limitations that host governments place on foreign products and services or on foreign firms themselves when they enter or leave the host economy. Because of the indemnity of protecting their national automobile industry, the import tax of automobile is relatively high in Malaysia.Since 2004, Malaysia began to reduce the automobile import tax for the import components the tax is red uce from 25% to 10%, and for the whole automobile the import tax is drop from 130% to 30% for the companies outside of southeastern United States Asia (MEI, 2009). In 2010, jibe to the agreement of ASEAN, the automobile import tax will be zero to all the regions of ASEAN. UK is a member of EU, it followed the economic agreement of EU which sets no import or export tax between members of EU and they must charge the same tax when they have business with the terce country (European competitiveness, 2009). 12.International Business Environment II Scoring Analysis of UK and Malaysia Country Score Econography Culture Legal System Income Profile Political Risk Tax Regime Exchange Rate Restrictions Total (10) (10) (20) (20) (10) (10) (10) (10) (100) 8 7 18 8 8 8 7 7 71 7 6 16 15 5 9 8 9 75 UK Malaysia 3. Institutions 3. 1 WTO The major objectives of WTOs roles are ? the creation of a common automobile market through the elimination of barriers to intra-Community trade the maintenance and expansion of a competitive world automobile industry the use of voluntary import restrictions to prevent cheap imports and to maintain competitiveness?(European Commission, 2006). For example, in 2006, WTO proclaimed the instauration of a panel to examine whether Chinas tariffs on trade auto parts violate WTO trade rules, following a go complaint made by the United States, the European Union and Canada, who criminate China for its discriminatory charges on imported auto parts. After examining Chinas think regulations, WTO panel declared that Chinas regulations are inconsistent with Chinas WTO obligations. China has agreed to make the required regulatory changes by September 2009 (Herd, 2006). 13 International Business Environment II.WTO facilitates Geelys international expansion since the elimination of trade barriers has cleared its course of study to world market and made it meldd to the world economy. In 2002, after China joined into WTO, 100 automobiles of Geely export ed to Syria (Luo, 2005). 3. 2 EU EU functions as a rule-imposer. It sets strict requirements and institute rules and regulations to improve vehicle safety. Besides the vehicle crash tests executed by Euro NCAP (European New Car Assessment com aimer programme backed by European Commission), there are also some regulations set to protect the environment.First, in allege to respond to the gradual botheration of babys room effect, the European commission genuine a mandatory emission standard to limit the emission of one major kind of greenhouse gas, CO2. The regulation set a fleet-average CO2 emission target for passenger cars, which is 120 g/km to be reached by 2015 (European Commission, 2010). The vehicle manufacturers must reach the CO2 emission target of 130g/km, with an additional reduction of 10 g/km to be provided by supplementary measures, such as the use of hydrogen send away.A long-term target of 95 g/km to be reached by 2020 is also established by the regulation (ibid) . This regulation will deliberate effect in 2012. From 2012 onwards, vehicle manufacturers who do not meet this target will have to pay penalization for their excess emissions. According to DieselNet (2010), from 2012 to 2018, the penalties are 5 per vehicle for the first g/km of CO2 15 for the second gram 25 for the third gram 95 from the fourth gram onwards. From 2019, manufacturers will pay 95 for each g/km exceeding the target. Another congressional empowerment imposed by European Commission requires tire pressure supervise systems on all new cars in 2012.According to Europes Information Society (2010), many road accidents resulting in fatalities and physical injuries are linked to tire defects. Furthermore, under-inflated tires can result in severely wasteful use of fuel and cause an extra two million slews of CO2 emitted into the atmosphere per year. So this mandate enhances vehicle safety and protects the environment. 14 International Business Environment II These regul ations have incurred a rise in car prices since vehicle manufacturers are forced to increase price to offset the cost of upgrading.These regulations put Geely in an unfavorable position. Since Geely is better cognise for making low-tech and cheap cars, making eco-friendly cars is not included in the competencies of the company and huge R&D spending is inevitable for nurturing this competence. They set a high bar for the competition and limit Geelys ability to expand market in Europe. 3. 3 ASEAN ASEAN Association of mho eastside Asia Nations is a geo-political and economic organization of 10 countries located in Southeast Asia. China and ASEAN are both newly-emerged, rapidly-developing auto markets.Cooperation in auto industry between China and ASEAN will knead a win-win federal agency for the two sides and make their cars more competitive in a global competition. For instance, fit in to Xinhua News Agency (2006), a report released by the Ministry of Commerce Indonesia has ann ounced that compared to the expensive Japanese sedans, the China-made ones gradually gain popularity for more favourable price-performance ratio. ASEAN country also needs investment from Chinese carmakers to expand local economic consumption and for more price-favourable cars, said a Germany auto expert at the China-ASEAN Expo, 2006.Consequently, in general, ASEAN opens its gate to Chinese car companies including Geely to achieve a win-win situation. 4. Assessment of Geelys overall international expansion strategy Geelys current international strategy is to produce affordable automobile, so the market size and consume power of a foreign market are highly valued by Geely. Malaysia automobile market resembles China more than UK, in the aspects such as the peoples income, the similar culture, and the similar geographical position, and so forthAs by now most cars have been exported to some developing countries like South-East Asia, Ukraine, Russia, and Mexico, Malaysia will be good cho ice. Mean succession, although UK does not illustrate a neighboring or ? home market, 15 International Business Environment II as markets in South-East Asia do, UK could be seen as an interesting market with a potential for higher margins, higher price levels and a more mature market for branding, technology, etc, as the UKs income per capita, and the automobile sales volume are higher than that of Malaysia.Considering the future international development, Geely should strain on UK. Therefore, at first, it is better for Geely to develop its ? producing automobile which most of people can buy strategy in Malaysia, and when Geely is able to enter high-end automobile market, UK will be a better choice. In terms of multilateral institution, after evaluating the influence of international organizations, we suggest that Malaysia is a better choice for Chinese car companies to exploit new markets. Firstly, a win-win situation guarantees a favourably corporate relationship between Geely a nd ASEAN (Eichengreen, 2006).Secondly, there are various(a) quality-related requirements and constraints in EU and probably NAFTA, which puts up a strong contest for those Asian auto makers. Moreover, by far, there is no evidence to prove the acquisition of Manganese Bronze and Volvo have considerably increased Geelys sale in developed nations. Thus considering the opportunities and threats faced by Geely, it is recommended that the company emphasizes on developing nations markets, rather than the developed markets. 5. Marketing analysis 5.1 Legal system According to Alistair Darlings pre-budget report, UK will bring new opportunities for the low-carbon industries. Through the Innovation Investment Fund and the Carbon impudences Venture Capital scheme, UK will invest at least(prenominal) ? 160m in low carbon projects (Guardian, 2009). They will also invest ? 90m in the European Investment Banks new 2020 fund, which will put 6. 5 jillion Euros of finance in green infrastructure projects. In this report, there are alterations to the climate change levy, company car tax, and fuel benefit charge (ibid).This is good news for Geely because now it dedicates itself to produce high technology and eco-friendly automobile. In 16 International Business Environment II UK the amount of car tax depends on the price and the discharge amount for carbon, which is from 9% for electric drive car to 10%-35% for petrochemical car. UK also has a self-made car scrappage scheme, which gives consumers a ? 2,000 rabbet off. If they scrap their old vehicle, it will help up to 125,000 families replace their inefficient boilers with new models (Julia, 2009).Through the governments support of low-carbon industry, Geely has more opportunities to innovate high-tech and eco-friendly automobile. Furthermore, because of the low tax and car scrappage scheme, customer is inclined to buy or change an electric motor car,. In 22nd March 2006, Malaysia published the new automobile policy (MEI , 2009). Since that day, the import taxes of CBU (Complete Built Unit) are reduced from 20% to 5% for the ASEAN members and 50% to 30% for other countries. The import taxes of CKD (Completely Knock Down) are 10%.In 28th October 2009, Mustafa Mohamed announced many new policies for auto industry which will give much more preferences and subsidies for the new energy automobile companies (ibid). 5. 2 Income profile It is known that the success of Geely relies mostly on keeping low cost and offering the affordable cars. For instance, Geelys best-selling four-door sedan, the King Kong, has been sell 6127 in April 2010 and the retail price is between 47,800RMB 58,800RMB (Jiang, 2010). Geely sold 329,014 passenger cars in 2009, making it is the third largest domestic car producer (Zheng, 2010).However, Geelys lovable formula is under pressure in china because Chinese consumers are becoming wealthier the higher-end models will gradually be affordable for them. Meanwhile, brands such as th e Chery QQ, Ford Fiesta, and Honda Civic are threatening Geelys current market position. Geekys winning formula is also challenged at the oversea markets like UK and Malaysia. Date from HMRC (HM Revenue & Customs) indicates that nearly 50% of the population in UK earns ? 16400 per year which is much higher than the middle class income of Malaysia.This group of population could be a dominant power in the automobile market in UK. It is not a wise choice to sell its inexpensive cars in UK considering that low price would not be 17 International Business Environment II attractive for these relatively rich citizens. The similar situation also happened in Malaysia which made Geelys low price cars less competitive. This is because that the predicted real GDP growth in 2010, 2011 and 2015 are 4. 7%, 5. 0% and 5. 0%, Malaysian people are becoming richer than before(IMF, 2010).Their increasing incomes will directly affect their car buying choice. People nowadays prefer the higher-end models and the market constituent of Geelys lower-end models are estimated to reduce gradually. 6. Geelys reacts to the tinge of the ECLIPTER First, since the middle of 2009, the sales of car exports decreased from 37940 in 2008 to 6297. Furthermore, although Geely exports to more than 50 countries, most of them are developing countries which are not so effective in the promotion of the brand image.In order to get liberate of low-end image, Geely changed its strategy from ?produce automobile which most of people can buy to ? do not produce cars which price is below 40000 Yuan (Fang, 2009). Besides, Geely take over Volvo which also expressed its desire to promote the brand image. Geelys strategy changes starts in May 2007, which is focus on transforming its competitive advantage from price to technology. In 2007, Geely used three new motorcycle attributeYuan Jing, King Kong and Zi You Jian, which have relatively higher value added to military reserve the Haoqing, Meiri and You Liou.For doing that, Geely scraped its old molds, jigs and production line which worth up to 8 billion Yuan. In 2008, the sales of these three new auto types grew 12% without discount marketing strategy (Geely annual report, 2009). Furthermore, in 2010, Geely will market 21 new auto types, and some of them were designed by Fabrizio Giugiaro, the Italys notable auto manufacturer. Moreover, the new energy auto will also be produced in 2010, which will include Panda and DiHao (Wenqing, 2010). These new energy auto types have been showed in the Beijing car exhibition 2010 (Phoenix auto, 2010).In order to deal with these two factors, Geely also has a complementary strategy work or takeover other well-known international auto manufacturers. It will not only help Geely to promote its auto manufacture technology, but also improve its brand image. Geely has already cooperated with 18 International Business Environment II Britains Manganese Bronze to produce juicy brand-named taxi (China car Times , 2010) and assembled cars with Information Gateway Corp Sdn Bhd (IGC) in Malaysia, 2006 (Tan, 2006). 7. leverage the multilateral institutions7. 1 ASEAN One of the stunning news in 2005 was the political barriers Geely met in Malaysia, which was considered as the biggest challenge for its overseas expansion so far. Geelys President Li Shufu described Malaysia as ? an unexpected trap? because of Malaysia governments rejection on fulfilling the contract. After examining the ECLIPTER factors of Malaysia market, Li Shufu and his team regarded Malaysia as the first pillbox and cornerstone of its expansion to ASEAN countries. He believed the learning in Malaysia could be helpful.Therefore, in May 2005, Geely has made a joint contract with Malaysia IGC group for building CKD factory in Malaysia. However, Malaysia government denied the contract after a new document on automobile being published. According to the document, all cars made by foreign automobile manufacturers were prohibited to sell in Malaysia. Then the situation in Malaysia went against its expection of getting a huge sale. However, according to Geely officials, to some extent, ASEAN agreements have made Geely to reconsider the importance of Malaysia (Harwit).In South East Asia nations, there are some strict tariff-related regulations for automobile industry. Contrarily, tariff among ASEAN countries is in a minimum rate. According to an inner-ASEAN agreement, from 2003 to 2009, Indonesia, Thailand, Malaysia, Philippine, Singapore and Vietnam exempted auto import tariff for each other. From 2010, all ASEAN countries will implement zero auto import tariff for each other. At the same time, Indonesia, Thailand and some other ASEAN nations demand of cars is increasing considerably (JAMA, 2008). Especially after an impressive increase in 2007, the car-sale in Indonesia becomes significantly dazzle.Therefore Geely 19 International Business Environment II planed to only manufacture cars in Malaysia and then exp ort cars to other ASEAN countries, which seems like a forward-looking plan in a long-term development. Finally, Geely decided to move its Malaysia CKD manufacture center to Indonesia. However, its vision of leverage ASEAN to pursue a sale performance in all ASEAN nations has not changed. 7. 2 EU In terms of EU regulations, since Geely has acquired 100% will power of Volvo, the Swedens company, Geely is no longer an outsider of European market.According to the EU Single market concept (European Commission, 2010), a free circulation of capital, labor, goods and services between EU members is granted. Geely now have got over tariff barriers and competes as an insider. 8. Implications and Recommendations One of the strategies of Geely is to promote new energy automobile, there are two advantages for this strategy Firstly, Geely can get powerful support from government since the development of new energy is encouraged by the government.Secondly, since new energy automobile is environmen tal friendly goods, it not only reduces the carbon emissions, but also decreases the expenses on routine maintenance (Bond newspaper, 2010). However, there are also drawbacks, such as the inadequate facilities. Acquiring other world famous bands is the other strategy of Geely, which facilitates the companys global expansion. For instance, Volvo is well-known by its safety, which could provide Geely with a competitive advantage on its brand trust. It also provides a valuable, more upscale user image.Therefore, through merger or acquisition of international well-known brands, Geely can get greater international fame and advanced technology, integrate into the world market and attract more consumers. However, certain risks should be considered when Geely acquires Volvo. The first risk is that the culture conflicts between two countries. It has been reported that one of the keep factors is that the union of Volvo in Sweden disagrees the acquisition for their reduced 20 International Bu siness Environment II welfare and unemployment (Gasgoo, 2009).The second risk is that the value of acquired equity. It has been said that Volvos vaunted reputation for safety has been challenged by other manufacturers which can also provide automobiles with same safety standard. In this case Volvos ? safe? advantage may not be as competitive as before. 9. Conclusion To sum up, this essay has analyzed the ECLIPTER factors of Geelys two overseas markets, Britain and Malaysia, and examined influence of the related multilateral institutions. According to this matrix analysis, legal system and income profile have the most important impact on the auto industry.For multilateral institutions, ASEAN and WTO generally promote the Geelys international expansion strategy, while EU regulations are less favored in its expansion. Considering both ECLIPTER factors and related multilateral institutions, it is suitable for Geely to enter developing nations to acquire market share at its initial devel opment. But for long-term development, Geely need to pay oversight to research and develop higher-end models. With the development of Geely Company and the overall auto industry, Geelys focus will shift from developing countries to developed countries.Currently, Geelys low price strategy is challenged by the legal system and income profile of developed countries. Therefore, Geely is increasing its efforts in releasing new model cars and tapping into developed countries through merger or acquisition. Geely intends to promote its brand image and enlarge its market share through these strategic moves, although it has to face the risk of culture conflicts and the distrust of acquisition value. 21 International Business Environment II 10. References Azia, A. Z. (2004) Malaysia-Encouraging economic system in a Dynamic Economy Online. Available at h.