Building Chinese Cars in Mexico: The Grupo Salinas-FAW Alliance

13 Pages Posted: 21 Feb 2014

See all articles by Miguel A. Montoya

Miguel A. Montoya

Instituto Tecnológico de Estudios Superiores de Monterrey

Alvaro Cuervo-Cazurra

Northeastern University - Department of International Business and Strategy

Date Written: February 19, 2014

Abstract

Ricardo Salinas Pliego was the CEO of Grupo Salinas, one of the largest business groups in Mexico, and in 2009 he faced a challenge. Two years before, he had negotiated with the Chinese car company FAW to import Chinese cars to Mexico as an initial step towards their manufacturing. However, the global crisis of 2008 made him question the viability of the project and he needed to decide whether to close the operation or continue in the hope of a quick recovery. This was a difficult decision because the group had sold several thousand cars and established a network of car dealers. Closing the operation would mean not only losing the investment in the network while having to continue servicing the cars, but would also result in a blow to the reputation of the group. He was pondering what the best option would be.

Suggested Citation

Montoya, Miguel A. and Cuervo-Cazurra, Alvaro, Building Chinese Cars in Mexico: The Grupo Salinas-FAW Alliance (February 19, 2014). Available at SSRN: https://ssrn.com/abstract=2398498 or http://dx.doi.org/10.2139/ssrn.2398498

Miguel A. Montoya (Contact Author)

Instituto Tecnológico de Estudios Superiores de Monterrey ( email )

Av. General Ramón Corona No.2514
Zapopan, Jalisco, 45201
Mexico
523336693000 (Phone)

HOME PAGE: http://www.itesm.mx/wps/wcm/connect/Campus/GDA/Guadalajara/

Alvaro Cuervo-Cazurra

Northeastern University - Department of International Business and Strategy ( email )

D'Amore-McKim School of Business
313 Hayden Hall, 360 Huntington Avenue
Boston, MA 02115
United States
16173736568 (Phone)
16173738628 (Fax)

HOME PAGE: http://cuervo-cazurra.com

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