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Introduction

Thirty years of continuous impressive economic growth, availability of cheap unskilled labor force and low-cost factors, incentives to investments and a gigantic potential market of 1.3 billions customers: these are simply some of the reasons that justify the firms’ attention and attraction to the People’s Republic of China.
However, the Chinese economic environment is changing: forecasts show a slowing growth rate,
more strict environmental policies are effectively enforced, wages are rising quickly and raw
materials are getting more expensive. At the same time, Chinese firms are innovating and thus
becoming stronger competitors on the global market.
China is shifting from an “investment-led” economy to a “consumption-driven” one, as specified in
the China’s latest five-year plan (McKinsey, 2012). Probably the historic era in which China was considered the World’s Factory is already finished or, at least, is going to end soon.
How do the foreign firms who have invested in China face this evolving economic environment?
How do those who choose China as a cheap-factors land react to rising production costs? How do
these changes influence the firms’ global strategy and affect their international decisions and
operations? What is the role of Chinese partners in this particular period? Should they be considered as a threat or as an opportunity?

Research Methodology

The research method chosen is the case-study analysis, with information and data collected through interviewing Iveco S.p.A. managers. Personal in-depth interviews have been chosen as primary instrument because of the peculiar topic of this work.
The research will focus on the international strategy of Iveco S.p.A., trying to apply several of the most famous internationalization models of the economic literature to this specific case study, in order to assess the models’ capacity and adequacy to understand the firm’s global strategy.
Iveco S.p.A, world leading operator in the commercial vehicles market, has been chosen as case study because of its long presence of more than twenty years in the Chinese market. The interviews have been centered on the steps taken by the firm in China, mainly focusing on the whole
internationalization process and on the Iveco’s Chinese Foreign Direct Investment (FDI), the two
joint-venture established: the first one with NAC (Nanjing Automotive Corporation), based in
Nanjing (Jiangsu Province), for the production of light and medium trucks since the 90s; the
second and more recent one with SAIC Motor (formerly Shanghai Automotive Industry
Corporation) and Hongyan Automotive Co Ltd., based in Chongqing, for the production of heavytrucks and engines.
More precisely, questions will regard the factors and reasons that have influenced the market entry
modes, locations and joint venture partner choices as well as managers’ point of view about the
transforming Chinese economic environment and how the company should respond to these changes.

Research Purpose

As briefly mentioned above, this work has two main purposes: the first is to analyze the firm’s
global strategy and internationalization process, trying to describe the firm’s choices by using
several of the most important frameworks in the literature; the second is to deeply investigate the managers’ considerations and expectations about China, giving an insight on the company’s global vision and perspectives.