China's Car Industry Research

As the pillar industry in national economy, sedan industry is playing a more and more important role. Office of the State Council issued "the automobile industry restructuring and revitalization plan" at March 2009, after that at September 2009 new version of "the policy of Automobile Industry Development" was published. All these actions declare government's determination and will to develop sedan industry. However, problems, including low industry concentration, more sensitive price and fierce competition, core-technology deficiency with proprietary brands, lat but not the least, backward in aftermarkets, in this developing process must be highlighted. This paper will figure out how to formulate proper industrial policy which is the key point in the process of optimizing industrial structure and making self-owned brands leap-style development.Based on the analysis of structure, conduct and performance of Chinese sedan industry, the conclusion will be demonstrated in three parts. From the standpoint of structure, the sedan industry is in its low degree oligopolistic and scale effect status. Production capacity will be expanded but not excess. In terms of conduct, price war happens frequently, product diversification are popular, merger and acquisition is going forward in and out of China under the guidance of government. From the performance perspective, the whole industry has meager profit but capacity utilization rate reaches 90% and will not turn to over capacity, still lagging behind in technology and research funds. The self-owned brands need more technical innovation.By drawing on the experience of Japanese sedan industry growth and Chery, it can be concluded that government is playing a crucial role in the developing process, who should take the responsibility to form virtuous cycle of industrial chain and establish industrial cluster, at the same time, pay more attention to independent innovation and cultivating professionals, then our Chinese sedan industry can drive ahead sound and fast since revenue is generated via the mobility of talents and technology.