Pros & Cons of Going Global

Posted on June 9, 2008 by LCT Magazine

During a luncheon at LCT Leadership Summit last week, operators shared insights on doing business in growing international markets. Here are a few of the points made...

  • CHINA: The largest, fastest growing economy in the world... many transportation companies are trying to get business there. The problem is that you don't own the entire company in China. You have to bring Chinese owners in as the majority shareholders, giving them the ability to make major decisions. The positive side is that China can be pure numbers for a company: the revenue opportunity is huge. Downside: trademark and patent infringement is common; road safety and traffic pile-ups become big problems for transportation companies. And, be careful about the safety of women passengers. They can be raped and assaulted, creating a nightmare for them and liability for your company.
  • INDIA: Much of the same situations as China... a booming population and economy... security concerns... infrastructure and road problems. Also, Hertz and Avis are in both India and China building operations. Here, they're not really rental car companies since their vehicles are chauffeured by staff... Pricing is different in this country - people will pay full value to be chauffeured around in a Toyota Corolla and not a luxury car... Mumbai is a large city in India, home of many major companies that use transportation providers.
  • RUSSIA: Government stability continues to be a major concern of foreign companies doing business there... The current government is stepping up military presence, bringing echoes of the "Cold War" that had recently ended in the early 1990s... the due diligence process is critical when creating affiliates in the country - be careful about the deals you make... Russia is a large market that many transportation companies are interested in entering.
  • BRAZIL: Inflation is much more under control than in the past, which makes doing business in the country much more attractive, along with expanding cities like Rio de Janeiro, which can be good locations for doing business. Political instability can be a common occurrence in the country - business people must stay informed. Like in India, companies in Brazil are  looking at having employees shuttled and not using public transportation, which can be an opportunity for chauffeured transportation companies.
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