On May 31, 2021, Hisense committed RMB 1.3 billion to acquire Sanden Co., Ltd., the erstwhile global leader in automotive air-conditioning compressors and systems, which was then on the brink of insolvency. Hisense’s post-acquisition review determined that Sanden’s exclusive supplier model had driven up costs and undermined its competitive position. To remedy this, Hisense proposed welcoming high-calibre Chinese suppliers to introduce cost competition and enhance efficiency. However, Sanden’s workforce and incumbent Japanese vendors vigorously opposed the change due to differences in management styles between Japanese and Chinese firms. Which should Hisense do next to achieve effective integration and restore Sanden’s competitiveness?
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