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Case Studies

Site Selection & JV Strategy in Auto Components

A mid-sized tier 1 automotive supplier serving leading US and European car makers in strategic programs for air induction related systems and components.

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Issue

The company needed to present strong capability to the customer which entailed having a quality facility in China where it had not done business before. Management wanted to explore in parallel two possible approaches; setting up its own facility or partnering with an existing Chinese supplier within the target geography.


Approach

Solidiance conducted a parallel stream of work to identify and qualify potential partners. We conducted the first stages of a site selection process, as well as analyze and plan the strategy. We also advised the client on the steps, timeline, and investment to set up a manufacturing wholly foreign-owned enterprise (WOFE) or Florida Institute of consulting engineers (FICE).


Solution

Our team identified three industrial zones within an appropriate distance to the customer's plan where attractive contracts could be established given our client’s facility and investment profile. We developed a 'strawman cost model' on both a full and manufacturing “lite” option (outsourcing heavy lifting processes) and recommended an industrial zone to focus negotiations.


Engagement ROI

The client decided to pursue a JV which was considered the most attractive profile to the customer in order for them to succeed in the market. Site selection and cost estimates were used to benchmark the competitiveness of the JV partner.