Study On SCP Model Of China's Car Industry

Automobile industry was christened"the industry of industries"by Peter Ferdinand Drucker, a word-famous management expert. It is also called"The machine that changed the word"by some people, for it has brought out a profound revolution in"space"and"time", and only the inventions of steam engine and computer can be comparable with its role as an irreplaceable strategic industry in industrialization and modernization. Car industry is the most important part of the automobile industry. Car industry can promote social progress and economic development, and improve families'living standard. Since China joining WTO, its car industry has been developing fast, with a rapid increase in its car production and sales. Meanwhile China's car industry organization has been changing continuously. In order to study the present conditions of China's car industry organization, the paper focuses on the period since 2001 and adopts latest data. Applying the industrial organization theory of Harvard School, the paper analyzes car industry according to its market structure, market behavior and market performance,so as to get more in-depth analysis, and make the entire system more logical.The first two chapters review the relevant research and the theory used in the paper. Before using the SCP model to analyze the industry, chapter III makes an introduction about the car industry. It first defines the concept of the car industry, then looks back on the car industry's development history, and analyzes the relationship between car industry and the national economy to show the car industry's important role in the national economy. According the SCP model, the chapters IV, V and VI make detailed analyses of car industry's market structure, market conduct and market performance respectively, depicting a full view of car industry organization. The analyses show that China's car industry has low concentration ratio and low product differentiation; administrative barriers are the main barriers to entry; the competitions in price, car models, marketing, mergers and acquisitions become more intense; the profit margin and economies of scale become lower, technological progress becomes faster and the competitiveness of self-brand cars is week. Chapter VII systematically analyzes the relationship among the car industry'SCP, explains how they affect each other, and discusses the external factors and automotive industry policies which also influence the car industry'SCP. The final chapter concludes the paper and presents some suggestions for the government to improve its industrial policy, and for the enterprises to become more competitive.