Motivations for and Barriers to Offshoring Development Projects to China

Motivations for and barriers to offshoring can significantly depend on the destination country and industry. With the growing importance of the Chinese market for the automobile industry, research & development (R&D) activities of foreign automobile manufacturers have increased in China. Hence, in this study, we examine motivations for and barriers to offshoring development projects to China with a focus on the automotive industry. Twenty-one project practitioners were interviewed as part of two case studies of two offshoring automotive projects, and an extended qualitative analysis was conducted. As a main motivation, compliance with regulatory requirements was identified for offshoring projects to China. In contrast, cost savings show no motivational significance. Furthermore, the lack of qualified staff and weak protection of intellectual property (IP) rights are perceived as barriers by the participants of the study. Thus, quality offshoring preparation is one key in dealing with known barriers to offshoring projects to China.