Empirical Analysis Of China’s Auto Industry Economies Of Scale

The importance of auto industry in the national economic development can not beignored. In order to develop China’s automotive industry, we have to strengthen the researchand development of China’s automotive products during the reform of auto industry, and formthe Chinese auto manufactures that have influence in the world. Scale economy is one of theimportant forms of economic development. For the auto industry that has characteristics of ahigh correlation and a long industry chain, Increasing the industrial joint degrees andexpanding the overall scale of the industry have the significant influence for improving theoverall level of industry profitability. The major auto manufactures are use scale economy asan important development strategy, and have made significant achievements. So scaleeconomy should be a major problem in the industry reform of China’s auto industry.Scale economy is based on improving economic efficiency to determine the scale of theenterprise that is reasonable or not. It analyzes the extent practicable of the enterprise scale tofide the optimal scale and efficiency. First this paper describes the theoretical basis of scaleeconomy, and uses the theory of scale economy to make industry analyzing. Then comparingthe domestic and international automotive industry and using cluster analysis method to typethe Chinese auto industry’s position in the world auto market. And then analyzes thedevelopment of China’s auto industry, especially makes analysis of auto companies which areable to represent the state of development of the China’s auto industry. Select the carenterprises in the2011Fortune500as the analysis object, and the inputs and outputs of thenational auto companies as the analysis of indicators. In addition, making the empiricalanalysis based on multivariate statistical principles and techniques of data envelopmentanalysis, in order to get the relative level of the scale development of China’s auto companies.Finally, find the existing problems of China’s automobile industry in the industrial structure,development environment, technical level, the degree of industry agglomeration and internalmanagement, and specific recommendations for change accordingly.