| More than fifty years ago, automobile industry was reputed as "the mostinfluential industry in all industries" by Peter Dluke, a world-famous expert inadministration. Some people even regard it as "the kind of machine that changes theworld" due to the fact that it has brought about a profound revolution both in "space"and "time". It's an irreplaceable strategic industry in the process of industrializationand modernization. While car industry is the most important part in the wholeautomobile industry, which will have a great impact on promoting social progress anddeveloping economy and improving living standard of family life.China's car industry was initiated in the 1980s. Its development wasaccompanied with FDI. In the process of china's reform anal opening-up, FDI hasentered into China's car industry extensively. Based on the theory of traditionalindustry organization and FDI, this paper aims to analyze the changes in the marketstructure of China's car industry.Firstly, a brief illustration on FDI entering into China's car industry was given,including the process of entering, situation and basic model. By deeply analyzing thechange of market structure of China's car industry after the entry of FDI, this papertries to make a concrete analysis of the effect of FDI on the concentration rate,product differentiation, scale economy and entry barriers of China's car industry. It isconcluded that market structure are thought to be divided into three phases:high-degree oligopolistic market structure under government, moderate-degreeoligopolistic market structure and monopolistic competition market structure. Thenwe evaluate the effects on FDI entering into China's car industry in both positive sideand negative side. Finally, the aim of optimizing the market structure of China's carindustry is put forwarded, that is to form the oligarch monopolistic market structureand also some suggestions on Chinese government and internal enterprises arepresented. |
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