Research On The Relationship Between Interpartner Fit And Performance In Sino-foreign Auto Joint Ventures

Since reform and opening up, many famous multinational corporations have come toinvest in China. And as one of the pillar industries which have opened in the first place,automobile industry attracts the investment from all around the world. By the end of2011,almost all of the global vehicle companies have established manufacturing and sales businessin China. The remaining few are also promoting the import business and search for thedomestic opportunities. According to Chinese government, the vehicle project can onlyallowed with the ratio of foreign investment not exceeding50percent. Under thiscircumstance, sino-foreign joint venture has been the representative among all the forms thatforeign auto companies adopt. However, the low success ratio of joint ventures is a universalphenomenon. For instance, Guangzhou Peugeot and Nanjing FIAT were forced to dissolveand quit China before achieving their goals. On the other hand, the first domestic vehiclecompany hit the one million annual sales is Shanghai Volkswagen, one of the earliestsino-foreign joint venture. In2012, Shanghai Volkswagen reached its annual sales of1.28million, strengthening the leading position in the market. The achievement of ShanghaiVolkswagen illustrates that in spite of low success ratio, joint venture does has itsdevelopment space.Therefore, it is essential to study the influencing factors of the jointventure’s performance.Bsed on the theory of sino-foreign joint venture, this paper summarized the researches ofinterpartner fit, trust and performance, and reviewed the development of Chinese automobileindustry and its joint venture. This paper adopted case study as the research method, andtypical sino-foreign joint ventures such as Shanghai Volkswagen, Guangzhou Peugeot andGuangqi Honda were chosen as cases. In first, it analyzed interpartner fit and its factors ofthese three ventures. Then it explored the relationship between interpartner fit andperformance, and moderating role of trust on the relationship between interpartner fit andperformance.Finally, this paper comes to three conclusions. First, interpartner fit of joint ventures is a dynamic change. The environmental uncertainty and strategic change of parent company willimpact on the interpartner fit. Partners should pay close attention to the change of interpartnerfit and handle conflict in time to maintain the best states of interpartner fit. Secondly,interpartner fit has a positive impact on joint venture. Positive impact is closely related toperformance, and the higher interpartner fit leads to better performance. Thirdly, the trustpositively moderates the relationship between interpartner fit and performance. High trusthelps to improve performance.