Industry Analysis Case Study

China’s Auto Industry: The Emerging Trends

OR

Abstract:

With China’s entry in the WTO in December 2001, the domestic automobile industry witnessed a plethora of changes. Overall tariff and non-tariff barriers were reduced and the sector was opened up for FDIs. China rapidly emerged as the third largest automobile market behind the US and Japan, with about 3.1 million new cars being sold in 2005. The Chinese auto industry was evolving gradually into a mature market with consumers becoming more aware of the differences between brands.

The case while providing a broad overview of the Chinese automobile industry, discusses the emerging trends in the industry as well as in the consumer behavior.

Pedagogical Objectives:

• To understand the dynamics of the Chinese automobile industry in the pre- and post-WTO era
• To understand the critical factors responsible for the emergence of Chinese automobiles as the leading brands, both in the domestic and international market
• To discuss the global impact of the increasing export capability of the Chinese automobile manufacturers
• To understand the changing dynamics of consumer psychographics in China.

Keywords : Industry Analysis Case Study; China; Automobile industry; World Trade Organisation (WTO); Foreign direct investment (FDI); Brand loyalty; Personal mobility vehicle (PMV); Shanghai-Volkswagen; Geely Automobile; Pillar industry; Capacity utilisation; Asset light strategy; Non-tariff barriers; Contract manufacturing; First Auto Works