Research On R & D Investment And Economic Benefit Of Chinese Automobile Enterprises

The twelfth5-year economic planning is concentrating on speeding up the economical development mode change. The fundamental essences are: firstly the starting of an era of scientific development, secondly the construction of modern industrialization system, thirdly strengthening of the industrial core competent ability. The automotive industry, which is considered as one of the5pillar industries of constructing and developing the national economy, is of vital importance. How to implement its leading role and responsibility, to carry on the stable and healthy construction of economic development, lies on the improvement of overall competence of domestic industry, of which how to increase the investment of research and development, and how to induce the funds into research and development, is the most important factor.It is becoming general acknowledged that the China automotive market is more and more the focus of global enterprises to sale cars and win profits. At the mean while, for the domestic car makers, in the face to face of the increasingly fierce competition with the world renowned car brands, how to create itself a stable position and grow up in the market place, is becoming more likely to rely on themselves, rather than rely on the administrative methods and the local protection. The domestic car makers should realize that they shall have to improve themselves by implementing the functions of research and development under their systematic management.Based on the above description of current China automotive market condition, this article is to validate the positive correlation between the investment of R&D and the economic profits. The investment of R&D is defined to divide the amount of R&D cost with the main business turnover annually, both of which were revealed in the Management Cost headings in the accountant book. By analyzing the annual financial data of20public enterprises in the China automotive industry, the main business field of which is the manufactory and sales of complete vehicles, the expand is the past14years between year1999and2012, the results turned out that positive correlation does exist between the rate of R&D investment and the rate of main business turnover in the first and second following years. It also turns out that positive correlation exists between the type of enterprise and the economic profits. With this is explains that in the current China automotive industry development situation, it is reasonable for the enterprises to seek Joint-Venture partners and import the technology from the foreign counterparts, in order to increase the profits.At the final part of the article, suggestions are given to the authorities, whose role and responsibility should be how to guild the automotive industry to the stable and healthy development in the long lead time, rather than seeking for short term profits. For the authorities, in the dilemma situation of developing the national industry while ensuring the survival and profit of the enterprises, it is important to elaborate the effect of scale economy, to encourage the local enterprises to take over and to incorporate. This is by all means the sole and right path for China automotive industry to move forward.