OFDI Mode For China Independent Brand Auto Enterprises

China has become one of the biggest automotive manufacturing andconsumption countries after production and sales ranked first in the world in2009and2010two consecutive years. But what cannot be overlooked is the fact that thedominance of joint ventures limits the development of China Independent Brand Autocompanies in domestic market. The international competitiveness of ChinaIndependent Brand Auto companies that are mainly in the low-end market, lake ofcore technology and undershoot economy of scale is still weak. Under thisbackground, China Independent Brand Auto companies represented as heryAutomobile Group and Geely Holdings Group (Chery and Geely for short in thefollowing text) who foreign directly invest actively, have stronger desire to exploitoverseas markets than the joint ventures.OFDI Mode affects the success of international operations, and affect thesurvival and development of a company. The study on OFDI of companies like Cheryand Geely has an important practical reference for other China Independent BrandAuto companies which are still in the primary stage of OFDI. Besides, the study alsohas profound theory significance which can prove the FDI theory’s rationality andlimitations.To explore the present situation, theoretical explanation and empirical validationof the choice of outward OFDI’s mode for China’s Independent Brand Autocompanies, this paper made a comparative study of Chery and Geely’s OFDI. First,this paper analyzed the motives and feasibility of China Independent Brand Autocompanies’ OFDI based on the theoretical study of FDI, and taked furthercomparative research on Chery and Geely, as represented by two different kindsof OFDI mode. Second, made theoretical analysis on Chery and Geely’s OFDI basedon The Eclectic Theory of International Production (OLI Model) and its developedtheory (T-OLI Model), and explained the limitations of OLI Model. Third, usedAnalytic Hierarchy Process (AHP) to make empirical analysis on Chery and Geely’sOFDI, and proved that Location Specific Advantages and Transaction IntegrationAdvantages are the major factors diversify Chery and Geely’s OFDI.