Case Studies of Australian Businesses in China
Air international (draft)
Air International, a division of the Futuris Group, is a leading Australian supplier to the world's automotive industries, specialising in heating, ventilation and air conditioning, fabrication and seat and steering systems. As well as domestic manufacturing divisions in Victoria, South Australia and New South Wales, Air International has operations spread through Europe, North America and Asia.
In China, Air International has two manufacturing operations; the first of these, in Shanghai, was established in 1995 in partnership with a municipal state owned enterprise. In the late 1990s, Air International established another manufacturing venture in Chongqing and an engineering design centre in Shanghai. In 1999, Air International also moved its Asia-Pacific head office to Shanghai. Air International's major customers in China include GM, Ford, Mazda, Mitsubishi and local producers Jinbei, Changan and Nanjing Iveco. In all, China now accounts for about 10 per cent of Air International's global revenues.
While establishing their first venture in China was challenging and time consuming, Air International learnt important lessons from this experience. Businesses deciding to joint venture should carefully research and value the financial and asset position of potential partners, ensure a strong say in human resources issues and build a company structure that requires robust ongoing commitment from the partners. Businesses also should ensure that customers are financially sound and able to pay. These challenges aside, China remains a profitable, if competitive, market for Air International, and the expected growth in Chinese consumer incomes should continue to underpin strong growth in Air International's Chinese business.
Source: Air International, 2002.
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