JATCO
Best in France Case Study
ES2 Group F
Y.Fukui, K. Datchimoorthy
A. Fremy, T. Wainwright
1
1. The JATCO Company
1. Company
2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
• 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)
9. Benefits
10. Advice
• 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
2. The Global Automotive Market
1. Company
2. Market
JAPAN
3. France
4. Clients
5. Objectives
Daihatsu
Hino
51.1%
8. Costs
GM
Toyota
Fuji Jyuko
Honda
33.3%
Mazda
22.5%
Nissan
Ford
36.8%
Mitsubishi
JATCO
100%
100%
22.5%
10. Advice
100%
21%
51.1%
Suzuki
9. Benefits
100%
49%
Isuzu
Nissan D
99%
V W
33.4%
6. Constraints
7. Adaptation
EUROPE
USA
34%
Audi
Rolls Royce
Seat
Opel
BMW
Volvo
Peugeot
Jaguar
Renault
Daimler Chrysler
80% of JATCO shares haved
been purchased by Nissan
3
2. Global Automotive Market Consolidation
1. Company
General Motors
2. Market
Ford-Mazda
3. France
Toyota
4. Clients
Renault-Nissan
5. Objectives
Volksw agen
6. Constraints
Daimler Chrysler
Peugeot
7. Adaptation
Honda
8. Costs
Hyundai
9. Benefits
Nissan
10. Advice
Renault
Production Volume in
‘000’s Cars 2002
Fiat
BMW
0
2,000
4,000
6,000
8,000
10,000
12,000
Passenger Cars (000's)
•
•
•
Consolidation on a massive scale has produced “Super League”
6 groups now provide > 85% of worldwide sales
Consequently, Automotive Suppliers have had to respond
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1. Company
2. Global Automotive Market –
Consolidation (2)
2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
5
3. Why France (i)?
1. Company
2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
• 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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3. Why France (ii)?
1. Company
2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
• 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 …
7
3. Why France (iii)?
1. Company
2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
• 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
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Source: www.jatco.co.jp
4. Company’s Clients (i)
1. Company
2. Market
3. France
4. Clients
• European clients?
– Renault
– Peugeot (potentially)
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
– 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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4. Company’s Clients (ii)
1. Company
2. Market
3. France
• Clients expectations
– Excellent quality
– Excellent service
“Intelligent Powertrain System,
responding to the diverse needs of
our customers worldwide”
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
• 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
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4. Company’s Clients (iii)
1. Company
2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
• 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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5. Objectives & Values (i)
1. Company
2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
12
Source: www.jatco.co.jp
5. Objectives & Values (ii)
1. Company
2. Market
3. France
4. Clients
“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”
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
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
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Source: www.jatco.co.jp
6. Constraints in France
1. Company
2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
• 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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7. Adaptation to France (i)
1. Company
2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
• 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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7. Adaptation to France (ii)
1. Company
2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
• 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
10. Advice
16
8. Key Constraint Costs
1. Company
2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
• 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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9. Key benefits of being in France
1. Company
2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
• 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
9. Benefits
10. Advice
• French Automotive Manufacturers
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10. Essential Advice (i)
1. Company
2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
• 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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10. Essential Advice (ii)
1. Company
2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
• 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
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10. Essential Advice (iii)
1. Company
2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
• 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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We thank
1. Company
2. Market
3. France
4. Clients
5. Objectives
Name:
Title:
Company:
Ryota Charlie Arai
Director, Sales & Marketing
JATCO France SAS
Address:
57, Esplanade du General de Gaulle
92081 Paris la Defence cedex
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
Tel:
Email:
+33 (0) 1 46 96 56 34
ryota.arai@jatco.fr
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Other
1. Company
2. Market
3. France
4. Clients
• Appendix
- Questionnarries
5. Objectives
6. Constraints
7. Adaptation
8. Costs
9. Benefits
10. Advice
23
Our Team
1. Company
2. Market
3. France
4. Clients
5. Objectives
6. Constraints
7. Adaptation
Yasumitsu Fukui
Tim Wainwright
Alain Fremy
Kamal Datchinamoorthy
8. Costs
9. Benefits
HEC class of September 2003
10. Advice
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