In the era of globalization, being culturally intelligent is a requirement for many companies, both international and local. The car industry is a prominent example of a global market that is challenging to enter without possessing a high level of cultural intelligence. The need to sell the same product in different regional markets puts a significant strain on marketing and business relationships, as companies must adapt to various social, political, and business conditions. Chinese, American, and German carmakers are one of the most successful firms in the global automotive market, making their expertise in marketing campaigns highly valuable (West & Lansang, 2018). It is impossible to facilitate a successful knowledge transfer, establish marketing strategies, and gain a competitive advantage while operating on a global scene without the required intercultural competencies. A firm must be able to adapt to new markets, work with a highly diverse workforce, respect others’ values and beliefs, and translate its messages to a multitude of foreign contexts. This paper will assess the role of cross-cultural communication in the context of the automotive industry on the example of regional markets of China, the United States, and Germany.
Intercultural Communication in the Automotive Market
The state of the global car market indicates the direction that companies must commit to in order to become leaders of their respective industries. There are several distinct intercultural competencies that can assist firms in pursuing the continuously evolving goals of the globalized business world. In the automotive sector, cross-cultural communication is crucial in keeping a firm’s competitive advantage on a viable level. Developing a trusting relationship within each region takes a significant effort, as it is easy to offend locals without understanding their native culture, values, and beliefs (TMA World, 2019). Therefore, mindfulness of others’ preferences is the first essential intercultural competence.
Moreover, understanding different cultures and keeping their specifics in mind is essential for successful marketing campaigns. Multicultural marketing is a critical part of car sales, as each region needs an individually tailored approach that will reflect local values with great precision. Therefore, flexibility is a crucial competence that can assist companies with reflecting on what modes of communication are the most fruitful and must be utilized (Halualani, 2019). Companies must research a local culture before entering a new market to integrate it into their efforts in promoting their products. A second reason why flexibility is essential for carmaker firms is the benefit of having a local manufacturing facility. Establishing such a site will require convincing local authorities to allow its construction and hiring natives who might have different work ethics. Building such a trust can enable a company to gain the upper hand over regional manufacturers by combining proven technologies and methods with a fresh view from new employees.
Non-native businesses must also compete with local brands that already have an established presence, and their value is known to the customer base. Delivering their message to the people whose culture differs greatly requires respect and careful selection of content through observations and direct encounters with the local community (Halualani, 2019). An in-depth look into the lives of people from an unknown culture can help firms avoid damaging their reputations and alienating potential customers.
Cross-cultural Relationships of Chinese, German, and American Carmakers
The specific car industries that went global present clear proof of the value of high-quality intercultural communications. For example, Germany’s economy and a significant portion of the local workforce rely heavily on the automotive market, which needs to make sales to the United States and China to achieve profitability (Krpata, 2021). 75% of all German-made cars are exported, which signifies the need to uphold intercultural relationships to the highest standard (Krpata, 2021). German manufacturers provide quality and have to select their import regions with precision and after a thorough assessment. As of now, German carmakers have a competitive advantage in China due to a demographic size that provides a sufficient number of wealthy customers and in the United States due to the country’s high GDP (Krpata, 2021). It is clear that observation of the local preferences and cultural specifics has provided Germany with a feasible strategy for the next few decades.
The United States car manufacturers are on the same level as their German rivals. The vehicle export remains high, as its volume represents twenty percent of the total goods sold abroad (Zambelli, 2021). However, there are issues with the country’s local market, which continues to be rapidly conquered by imported cars. Sales of American vehicles in the United States are dropping while Chinese products take their place (Zambelli, 2021). This replacement comes with a slew of issues stemming from intercultural communication. Currently, the United States has a challenging relationship with China due to the recent trade rivalry (Krpata, 2021). This negative example reveals how cross-cultural interactions may be hindered by the lack of mutual understanding, respect, and compromise.
There is a vital feature of the US automotive market that makes it stand out among the other two countries – its potential for research and development. The growing demand for electric vehicles (EVs) in the region has attracted investments in R&D (Loew, 2021). Investor relationships are yet another dimension of intercultural communications that automotive manufacturers must consider in their activities, as foreign funds also come with the need to upkeep a two-way dialogue with stakeholders. Explanations of how their investments work for the betterment of society have to be clear, concise, and stay within the boundaries of accepted communication barriers. The United States manufacturers show that working on the same goal that benefits every party is a sure way to gain mutual respect.
China takes a unique position among the countries with the largest car manufacturing facilities. Its market is highly desirable by other firms, yet it also has numerous local brands that already have an authentic marketing strategy. Chinese carmakers are rapidly expanding abroad, steadily expanding both the quality and quantity of vehicles they export (Krpata, 2021). This notion sets up a challenging precedent for importers from both Germany and the United States. Losing the Chinese market would be a major hit to any company that fails to accommodate cultural differences in its marketing efforts (Krpata, 2021). What foreign companies may fail to achieve in the Chinese market, the country’s manufacturers perform abroad with great success. China is committed to satisfying any customer base by reading the latest trends in the automotive industry, cooperating with foreign manufacturers, and attracting new companies to build their factories within its borders (Krpata, 2021). China’s carmakers excel at flexibility by adapting their production to any cultural context through careful integrations of their vehicles’ designs, quality, and prices to the needs and preferences of regions for import.
The major players of the listed markets also utilize intercultural communication to accelerate their growth. The current trend in this market suggests that mergers and acquisitions among companies are feasible strategies for growth and development, yet it also puts a strain on communications with new partners and customer bases (Warter & Warter, 2020). Many mergers, such as Ford-Jaguar and BMW-Rover, reveal the importance of possessing a cultural intelligence of a high level to foster an atmosphere of mutual respect. However, without a clear understanding of the cultural differences between companies that are being merged, such initiatives may lead to unsatisfactory outcomes (Warter & Warter, 2020). During such mergers, workers become a part of a larger structure and may work with people from different cultures. Increasing diversity within an organization can alleviate a potential cultural shock that employees may experience due to such restructuring.
In conclusion, international carmakers must be mindful, flexible, observe, and strive for diversity in their workforce to keep and expand their competitive advantage in the future. There are many new factors, both technical, political, and social, that influence the automotive industry and require an immediate response tailored specifically for each region. Local markets welcome foreign car manufacturers, yet customers must be convinced through carefully selected marketing strategies that these products are worth buying. A high degree of flexibility must be shown in every advertising attempt to establish a firm’s dedication to the local public. Such an approach requires automotive manufacturers to learn about different cultural contexts and how they can express their respect toward native people. With the vehicle market being one of the most globalized ones, these intercultural competencies must lie at the heart of every manufacturing company.
Halualani, R. T. (2019). Intercultural communication: A critical perspective. Cognella Academic Publishing.
Krpata, M. (2021). The automotive industry: The Achilles’ heel of German economy? Études de l’Ifri.
Loew, L. M. (2021). US auto industry focuses on strategic investments as world eyes future of EVs. Foley & Lardner LLP.
TMA World. (2019). 10 reasons why more cultural intelligence in the automotive industry is needed.
Warter, L., & Warter, I. (2020). Mergers and acquisitions in Eastern Europe: Intercultural issues in the automotive industry. In L. Warter & I. Warter (Eds.), Understanding national culture and ethics in organizations (pp. 21-32). Emerald Publishing Limited.
West, D. M., & Lansang, C. (2018). Global manufacturing scorecard: How the US compares to 18 other nations. Brookings.
Zambelli, G. (2021). Challenges of the US automotive industry. ExportPlanning.