Research On The Outward Foreign Direct Investment Of China’s Automobile Enterprises

As an important pillar of the national economy,the automobile industry not only represents a country’s industrialization level,but also reflects the country’s overall industrial competitiveness.Since the reform and opening up,China’s automobile industry has attracted a large amount of foreign investment with its huge market advantages,and its development has entered the "fast lane".In 2009,China’s auto production and sales surpassed the United States to become the world’s No.1 and kept that position from then on,laying a solid foundation for the industry’s outward foreign direct investment(OFDI).For nearly 20 years’ OFDI practice,China’s auto companies have built overseas assembly and production plants by means of greenfield investment,and acquired valuable foreign competitors through cross-border mergers and acquisitions.Meanwhile,overseas research & development centers have been founded and domestic brands have been gradually gaining recognition from foreign consumers,despite many difficulties and setbacks.At present,it is already possible and necessary to conduct theoretical and practical research on the OFDI methods,location selection,risk prevention and control of Chinese auto companies,in a comprehensive and systematic manner.This research is expected to provide some guidance for the OFDI of China’s auto companies so that its progress can be accelerated and the global competitiveness and international brand recognition can be enhanced,thus gaining development of high quality.This thesis aims to study and explore major issues such as the choice of OFDI methods,location selection,and risk management and control of China’s auto companies.It conducts a relatively comprehensive review of relevant domestic and foreign research literature,defines related concepts such as auto companies,OFDI,and OFDI risks,and discusses the theory of marginal industry expansion,the theory of international production compromise,the theory of technological localization,the theory of international investment location and other theoretical foundations.Guided by these theories,it reviews the development history of China’s auto industry and major auto companies’ OFDI,and carries out a comprehensive and systematic analysis and summary of the investment methods,location selection,risk management status quo as well as existing problems.From the three aspects of China,host country,and companies’ own strategy,an in-depth analysis of the current OFDI factors of China’s auto companies is conducted.Furthermore,two typical cases including Geely’s acquisition of Volvo and Chery’s investment in Brazil were analyzed,with its successful experience and reasons for failure summarized.Finally,some suggestions are proposed on the choice of investment method and investment location,investment risk management and control,as well as the development of companies themselves.It is hoped that this research can provide some enlightenment and make a contribution to the OFDI of China’s auto companies.