Essay on How China's Automobile Industry is Developing

This one I think is perfect myself. It fits your needs very well1!!!

[References]

[1] China Automotive Technology Research Center: China Automotive Yearbook (2002).

[2] China Society of Automotive Engineering: "World Automotive Technology Development Report" (2002).

[3] Institute of Industrial Economics, Chinese Academy of Social Sciences: China Industrial Development Report (2002), Beijing, Economic Management Press, 2002 edition.

[4] Zhao Ying: "The Development Trend of China's Automobile and Industrial Policy Trend," Leaders' Reference, Office of the Chinese Academy of Social Sciences, No. 35, 2002.

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I. Overall Situation of China's Automobile Industry

1 Overall Scale of China's Automobile Industry

In 2002, China's automobile industry produced a total of 3.25 million automobiles in the whole year, an increase of 38% compared with the same period of the previous year, and sold 324.8 In 2002, China's automobile industry produced 3.25 million vehicles, an increase of 38% over the same period last year; sold 3.248 million vehicles, an increase of 37.1% over the same period last year. Among them, the production and sales of cars exceeded one million, amounting to 1,090,000 and 1,126,000 respectively, an increase of 55% and 56% respectively over 2001. The growth of commercial vehicles is also considerable. Automobile industry economic efficiency has improved greatly, completed industrial added value of 151.5 billion yuan, an increase of 28.7%; completed sales revenue of 646.5 billion yuan, an increase of 30.8%; completed total profit of 43.1 billion yuan, an increase of 60.94%. Automobile consumption became the main force driving economic growth in 2002.

From the point of view of China's automobile industry's output, it has ranked 5th in the world, and may enter the 4th place in 2004. Among them, the car production ranks 8th in the world. But we should also see that the world's 5th largest production scale and the world's first and second place is far from the world's first. 2001 in the world's first United States automobile production of 11,420,000 units, in the world's second place in Japan's automobile production of 9,770,000 units. It should be noted that in 2002, China's automobile industry output in the CKD, SKD mode of assembly of the car is increasing.

2 China's automobile industry industrial organization and enterprise scale

The world automobile industry system has formed the so-called "6 + 3" pattern. That is, GM, Ford, DaimlerChrysler, Volkswagen, Toyota, Renault, Honda, BMW, Citroen and other major groups for global production. The industrial organization of China's automobile industry is still fragmented. There are more than 120 automobile production plants with legal personality. In terms of controlling relationship, although dozens of automobile factories have entered the 3 major automobile groups such as FAW, Dongfeng and SAIC respectively, on the whole, the industrial organization structure of China's automobile industry is still relatively decentralized. in 2002, the production concentration of the 3 major automobile groups, such as FAW, Dongfeng and SAIC, was 57%, which is 8 percentage points higher than that of 2001. The top 3 sellers of cars in China are Shanghai Volkswagen, FAW Volkswagen and Shanghai General Motors, whose sales accounted for 55.23% of the total sales, down 5 percentage points from the market share of the top 3 in 2001.

In terms of the size of individual companies, the top 4 in China's auto industry, FAW, Dongfeng, SAIC and Changan Automobile Group, have production capacities of between 300,000 and 600,000 units, and the benefits of economies of scale are beginning to emerge. Nonetheless, the scale of China's automobile industry is still small compared to that of world-class automobile producers, with South Korea's Hyundai Motor Company, which is ranked at the back of the world's major automobile companies, having a production capacity of 2.5 million vehicles. In terms of Asia, China also lacks influential automakers.

For some models, the production capacity of China's auto industry companies is again quite large. For example, the production capacity and scale of medium and heavy trucks of FAW and Dongfeng Group are among the highest in the world, and the sales volume of FAW Group's medium and heavy trucks in 2002 exceeded 200,000 units, ranking No.1 in the world. FAW Jiefang will form a truck production base in the world through technological innovation and development and transformation. China's buses, "pickup" vehicles, minivans production scale is also relatively large in the world.

China's large automobile companies are still less specialized than the international automobile companies. China's auto parts manufacturers are still mainly centered around a group development, small scale, has not yet formed for the whole industry and even the international market of large auto parts production group. 2002 this situation has changed greatly. China's major automobile companies began to organize specialized automobile companies in accordance with the models, for example, China First Automobile Group Corporation set up FAW Jiefang Automobile Co., Ltd. on the basis of the former First Automobile Manufacturing Plant's main specialized plant, specializing in the production and sale of medium- and heavy-duty trucks, with a total of 19.1 billion yuan in assets. China's big automobile companies began to separate their auto parts production enterprises and develop them into industry-wide enterprises. For example, Dongfeng Motor Company took the axle factory independent and established Dongfeng Axle Co., Ltd. specializing in axle production.

3 Technical level of China's automobile industry

China's automobile industry has a certain level and experience in the development of commercial vehicles, and there is a gap of 5-10 years with the world's advanced level. On the basis of product serialization, Chinese automobile industry enterprises have been able to launch a large number of new products every year. Take Dongfeng Motor Company as an example, it has completed 1,215 new product declarations from 2000 to 2001. China's automobile industry enterprises have been able to carry out the development and design of certain car bodies, but do not yet have a mature, higher level of overall car development capabilities. China's major car manufacturers in the new product development is mainly undertaken to localize the multinational companies' models of the work of certain products have a certain degree of upgrading and improvement of the ability to participate in some of the joint design. Because there is no complete independent development of cars, China's main car products do not have their own intellectual property rights.

In the technological development of automobile parts and components, China's automobile industry enterprises in some low value-added products with considerable development capacity; in the automobile key components of the technological development of a certain ability, but the gap with the international advanced level is very large. Many key components are merely imitations of foreign products. To automobile engines, for example, China's auto parts enterprises to produce the most advanced engine emissions can only reach the Euro 2 standards, while the developed countries are already Euro 4 standards. Chinese auto parts enterprises mass production of the engine is only equivalent to the international level of the 1990s. 2001 China's imports of various types of automobile engines for 246,087 units, greatly exceeding the number of automobile imports.

It should be pointed out that

In terms of the development of fuel cell vehicles, which is the core technology that determines the competition in the international automobile industry in the 21st century, China's automobile industry is almost at the same level with that of developed countries from the point of view of the government-supported R&D The Chinese automobile industry is almost at the same level with the automobile industries of developed countries from the perspective of government-supported research and development. If we can grasp the competitive path at the industrialization level, China's automobile industry may achieve a leap in engine development.

4 Market operation ability of Chinese automobile industry enterprises

With China's accession to the WTO, various enterprises have increased their promotional efforts. 2001, the growth rate of the entire automobile industry's sales expenses was higher than the growth rate of sales revenues, an increase of nearly 20 percentage points. China's automobile companies are also accelerating their construction of sales and maintenance systems. China's big automobile manufacturers have already established a relatively complete sales system across the country. Nonetheless, compared with the big international automobile companies, the sales service of Chinese automobile companies is still relatively backward. International credit, finance, insurance and leasing developed around the sale of automobiles have been quite perfect, and the big automobile groups in developed countries have quite strong strength in this area, while Chinese automobile enterprises have just started in these aspects. So far, the distribution of automobiles, after-sales service, including maintenance, automobile market, automobile leasing, sales and other aspects of the means is relatively single, automobile installments, that is, the means of financing the sale has not been fully carried out.

Many domestic brands of automobile production and marketing and after-sales service is disconnected. Part of the relationship between manufacturers and their dealers is not a benefit **** the same body relationship, but basically the market risk passed on to the dealers, dealers rely on the manufacturer's main earnings according to the sales volume of the end of the year rebates, incentives, and new car sales of decorative, cosmetic, insurance, and other appropriate services. China's auto dealers tend to focus only on the construction of sales outlets and business halls, for the maintenance service investment is correspondingly less. Agents distribution network is more single function, many automobile manufacturers have to re-construct another set of maintenance stations, maintenance parts trading network. Dealer sales function and maintenance service function separation, directly affecting the automobile production enterprises to expand market share.

5 China's automobile manufacturing capacity

From the scale of production, China's automobile manufacturers are gradually approaching the minimum economic scale of the international automobile industry, but labor productivity is still low. But labor productivity is still low. in 2002, Dongfeng Motor Company's labor productivity was 3 units per capita, compared with the per capita production of the world's major automobile companies in 1993: 24.75 units for Chrysler, 18.33 units for Ford, 10.38 units for General Motors, and 32.93 units for Toyota. The lower productivity, in many areas, offsets the advantage of cheap labor in China's auto industry.

Chinese auto industry enterprises have been digesting and absorbing imported technology, and efforts to localize imported models have been rapidly increasing. The localization rate of a considerable number of imported models reached about 40% when they were first introduced to the market. while it took 7-8 years for the localization rate of an imported model to go from 40% to 80% in the 1980s, it now takes only 3-4 years. China's automobile industry enterprise parts supporting capacity has been greatly improved. In the middle and low value-added auto parts manufacturing due to the entry of more private enterprises, the ability to respond to the market is also rapidly increasing.

Since China's automobile industry enterprises and international automobile companies have carried out comprehensive joint ventures, in the main automobile production plants, the main production and manufacturing process equipment level has been greatly improved. A considerable number of joint ventures production line equipment is introduced in accordance with the production standards of multinational companies. Some enterprises have also introduced flexible welding production lines. As the joint venture to organize production in accordance with the requirements of multinational companies, into the multinational companies of the global management and quality control system, so China's automotive enterprises to ensure product level, quality of key equipment, processes, management systems and other aspects of the gradual convergence with international standards.

6 Changes in China's automobile market

New products are being put into the market at a faster pace, and the emission requirements for products are becoming increasingly stringent. Beijing has already implemented the Euro 2 emission standard, and the country has also reduced the consumption tax by 30% for cars, SUVs and minibuses whose emissions meet the Euro 2 standard. As the government from the perspective of environmental protection, sustainable development and other perspectives of automotive product technology requirements, so that China's automotive market, the technical level of automotive products continue to improve. 1980s multinational corporations to get China's products to lag behind the international market for 2-3 generations, and now to come up with products launched in tandem with the international market. China's automobile market competition is becoming increasingly fierce, mainly in the field of cars. Chinese private enterprises are accelerating their entry into the car industry. Multinational corporations entered China's car industry on a large scale in 2002, and the competition among multinational corporations has become increasingly fierce. Second, China's auto industry fully integrated into the international automobile industry system

1 world auto industry giants into China

In 2002, as the Chinese government to implement the WTO commitments, the world auto industry giants to accelerate entry into China. FAW joined hands with Toyota and Mazda; Dongfeng cooperated fully with Nissan and raised the level of cooperation with PSA. South Korea's Hyundai Motor Co. and Beijing Automobile Holding Co. have entered into a joint venture. The initial investment scale of multinational companies entering China is relatively large. South Korea's Hyundai Motor Co. and Kia Motors Corp. plan to invest 430 million U.S. dollars and 300 million U.S. dollars in joint ventures in 2005 and 2006, respectively. At present, the world's top 15 car manufacturers in the automobile industry have all found partners in China. Multinational companies that have already entered China have expanded their investment on the original scale and increased production. Guangzhou Honda expects its production capacity to quadruple to 240,000 units in 2004, while the joint venture between Nissan Motor and Dongfeng Motor will increase production to 550,000 units in 2006. Both Honda and Toyota have made it their strategic goal to capture 10 percent of the Chinese auto market. While OEMs are entering China, auto parts factories within MNC groups are also accelerating their entry into the Chinese market. Most of the world's famous auto parts multinational corporations have entered China through wholly-owned enterprises and joint ventures. Toyota, Volkswagen, General Motors and other multinationals have dozens to hundreds of auto parts factories in China. With the entry of Honda into China, Dongfeng Honda Engine Company was also established in Guangzhou, with an annual output of 120,000-240,000 engines.

The accelerated entry of multinational corporations into China's automobile industry has accelerated the reorganization of China's automobile industry. 2002 saw the largest enterprise reorganization in the history of China's automobile industry, with Tianjin Automobile Company merging into FAW, making Toyota and FAW join hands. Dongfeng and Nissan established "Dongfeng Motor Co. FAW, Dongfeng, SAIC and other three major groups, respectively, together with 2-3 multinational companies to form a large group, the initial formation of China's automotive industry, the new "3 + 9" industrial pattern. That is, FAW, Dongfeng, SAIC 3 groups plus Guangzhou Honda, Chongqing Changan, Anhui Chery, Shenyang Brilliance, Nanjing Fiat, Zhejiang Geely, Hafei, Changhe and Jiangling Automobile 9 independent backbone of the car business. In the "3 + 9", FAW, Dongfeng, SAIC 3 automobile group production accounted for about 50% of the national automobile production, the other 9 independent producers of automobile production accounted for a total of about 40% of the country. The automobile output of the "3+9" has accounted for 90% of the national output. Multinational corporations and domestic large groups, mainly in accordance with the laws of the market for mergers and acquisitions, will be in the early 21st century to make China's auto industry industrial organization structure tends to be reasonable.

2 The integration between China's automobile industry and the international automobile industry has been deepening

(1) In the field of heavy-duty vehicle manufacturing, where there are fewer joint ventures, China's automobile enterprises have begun to cooperate with multinational corporations in a comprehensive way; in 2002, Dongfeng Motor Company and Nissan set up a joint venture called "Dongfeng Motor Co. In 2002, Dongfeng Motor Company and Nissan established a joint venture "Dongfeng Motor Co., Ltd.", which produces a full series of Nissan passenger cars and Dongfeng's heavy, medium and light trucks and buses; Dongfeng Group's comprehensive cooperation with Nissan creates conditions for the development of its heavy-duty automobile products at a high level and at a high speed; Shanghai Automobile Company has joint ventures with General Motors and Nissan to produce heavy-duty trucks.

(2) Foreign enterprises began to enter the fields of automobile manufacturing equipment, sales, maintenance services, consulting, research and development. Dongfeng and Japan's Osaka Machinery Co., Ltd. cooperate to produce a series of horizontal machining centers adapted to high-speed, high-performance production, which can meet the needs of China's automobile industry for flexible processing of large-volume parts and components. Before joining the WTO, the sales channels of Chinese automobile enterprises were not open to imported cars. After joining the WTO, there are joint-venture automobile sales enterprises. Foreign companies that provide strategic consulting for enterprises have also entered China's automobile industry. The government authorities are about to launch the Measures for the Administration of Automobile Financial Institutions. Major domestic automobile manufacturers and international giants such as Ford, Volkswagen and General Motors have applied to the People's Bank of China to set up automobile financial service companies, and the opening up of automobile finance has entered the countdown. 2002, multinational corporations entering China have generally committed to, or have begun to set up, research and development centers in joint ventures.

3 The position of Chinese automobile enterprises in the global system of multinational corporations has changed

(1) Beginning to become a regional manufacturing center of multinational corporations. 1990s, multinational corporations entered China's main strategic goal is to occupy the Chinese automobile market. the beginning of the 21st century, multinational corporations began to take China as a regional manufacturing center of their global strategic deployment. Its typical representative is that Honda, Dongfeng Motor Company and Guangzhou Automobile Group have set up a joint venture in Guangzhou, which is a processing and production base of Honda specializing in exporting its products to Asia and Europe, and 100% of its products are exported. Shanghai General Motors has begun to export large quantities of Buick GL8 to the Philippines and engines to Canada, which is the first time that China has exported large-displacement gasoline engines to a developed country. China's role as a production and manufacturing base for multinational corporations is beginning to emerge. Multinational companies in China to produce cars and export sales to other countries and regions, prompting China's automobile products to further improve the technical level and quality.

Automobile parts and components enter the global production system of multinational companies on a large scale. Globalization of auto parts procurement has long been the trend of the world automobile industry. Multinational corporations through the globalization of parts and components procurement, reduce costs, reduce risk, reduce the scale of investment in technology development. China's automobile industry enterprises to produce auto parts are accelerating into the global production system of multinational corporations. For example, Ford established a procurement center in Shanghai in April 2002, and in 2003, it is expected to purchase 1 billion U.S. dollars of parts and components in China for Ford's market in Europe and North America. In the cooperation between Dongfeng Motor Co. and Nissan Motor Co., Nissan has promised to include auto parts suppliers in Shanghai, Shiyan and Xiangfan in its global procurement system.

(2) Multinational companies take China as a strategic focus for global expansion. More and more automotive industry multinationals are locating their regional headquarters in China, signaling China's increasing position in the global strategy of multinationals. 2002 according to Volvo's global strategy, Europe, North America and Asia are its 3 strategic priorities. Volvo's decision to locate its Asian regional headquarters in China means that Volvo is basing its development in Asia on China. on December 18, 2002, Delphi, Honeywell and other 8 automotive parts and components multinational corporations passed the recognition of Shanghai Municipal Foreign Trade and Economic Cooperation Commission and Foreign Investment Commission, and were awarded the certificate of recognition for setting up regional headquarters in Shanghai. Multinational companies have announced their strategic goals in China in 2002. Toyota and Honda made it their strategic goal to capture 10% of the Chinese market. Nissan plans to sell 300,000 cars in China in 2004. Volkswagen and General Motors have made the Chinese market one of their most important sources of profit, trying to maintain the advantage they already have. Mazda, a relatively late entrant to the market, also announced that China is "an important part of its new millennium plan.

(3) Chinese automobile enterprises have begun to go global and optimize the allocation of resources on a global scale. Chinese automobile enterprises make use of professional design companies in the international automobile industry system to develop new products for themselves. For example, Shanghai Huizhong Automobile Co., Ltd. cooperated with South Korea's Ssangyong Motor Co., hired more than 10 automobile experts, and absorbed domestic research and development talents from major automobile factories, and successfully developed a heavy-duty truck with independent intellectual property rights. Changan Automobile Company cooperated with a famous Italian automobile designer to develop a new MPV model with independent intellectual property rights. The private automobile manufacturer Geely Group asked the Italian Automotive Project Group and Daewoo International Co. to help design a series of new sedan products.

Chinese automakers have also begun to engage in global sourcing. For example, Shanghai Automotive Group has established a joint procurement system for parts used by its affiliated enterprises***, organizing enterprises to participate in global procurement of parts and components in accordance with uniform quality specifications. Shaanxi Automobile Factory, through global sourcing, equips new models with engines of excellent performance, making its heavy-duty vehicles a competitive product in the Chinese automobile market. Chinese automobile enterprises not only utilize international resources in vehicle development, but also in auto parts development. 2001, Zhejiang Wanxiang Group, a private enterprise, successfully acquired UAI, a listed company in the U.S.A., which is the first Chinese township enterprise to acquire a listed company in overseas, and enabled the group to gain the ability of overseas market operation and technology development. FAW Automobile Research Institute cooperated with Germany FEV Company to develop CA6DE series diesel engine, which made a new breakthrough in diesel engine of Chinese automobile industry.

(4) China's inexpensive technical human capital began to be utilized. Multinational corporations entered China, in addition to the occupation of the Chinese market, the use of China's low labor force, reorganization of their competitive advantage is also an important reason. However, in the 20th century, MNCs mainly focused on utilizing the labor force on the production line in China. In the 21st century, MNCs in China have begun to utilize the technical human capital for their own product development. General Motors has not only used the Pan-Asian Automotive Technology Center, which it built with SAIC, to serve Shanghai GM, but also to provide technical services to the North American part of GM. More and more multinational companies are taking certain technology development projects of their parent companies to China.

(5) Changes in the way of joint ventures. since the 1980s, investment has been one-way, i.e., foreign firms invested in China's automobile industry. in 2002, Chinese automobile producers began to invest in foreign firms. SAIC Group's 10% stake in South Korea's Daewoo opened the way for China's auto industry to enter the world's automotive capital market, marking the beginning of China's auto enterprises to proactively realize their strategic intentions through the capital market. Shanghai General Motors, as a joint venture with a 50% stake in the reorganization of Yantai Daewoo, creating a new model of domestic auto mergers. The mode of joint venture also changed from two parties to multiple parties. Wuling, SAIC, and General Motors *** together formed a new automobile company; Dongfeng, Guangzhou, and Honda *** together formed Honda's automobile export base. Some of the joint ventures are actually held by foreign investors. For example, "Dongfeng Yueda Kia Automobile Co., Ltd.", Dongfeng Automobile Company accounts for 25% of the shares, Jiangsu Yueda Automobile Company accounts for 25% of the shares, South Korea Kia Automobile Company accounts for 50% of the shares. At present, China's three major automobile companies have formed a situation of cooperation with a number of multinational companies. Third, China's automobile industry in the international automobile industry system and its integration into the world automobile industry development trend

1 China's automobile industry in the international automobile industry system

(1) according to China's automobile products import and export of China's automobile industry trade competitiveness index: -0.7 in 2000, -0.77 in 2001, and -0.85 in 2002. 0.85. China's automobile industry is still an industry basically without international competitiveness. In terms of industrial scale, enterprise scale, technical level and international competitiveness, China's automobile industry is also an overall industry without international competitiveness, and it will remain an industry dominated by the domestic market for quite a long time.

(2) At present, China's automobile industry is located in the processing and manufacturing link in the global division of labor system of multinational corporations from an overall point of view, and it still belongs to a relatively low level although it is at a higher level compared with those countries that are purely engaged in assembling.

(3) China's automobile industry has a huge, rapidly developing market, cheap labor, complete, strong manufacturing supporting capacity, stronger, more complete technology development system, China's automobile industry in the 21st century can achieve relatively rapid development, scale, technical level, competitiveness have the conditions and possibility of rapid improvement. At present, China's automobile industry has a greater dependence on multinational companies, but due to the development of China's automobile industry has a variety of favorable conditions, China's automobile industry is likely to eventually become an independent development capabilities, with a certain degree of international competitiveness of the industry.

(4) After a period of high growth, around 2010, China's automobile industry is expected to become one of the world's major automobile manufacturing bases, and then gradually become the world's main production base for commercial vehicles, and become the main supplier of commercial vehicles and low- and medium-grade cars for developing countries and some developed countries, and become the manufacturing center of some auto parts for the global automobile industry.

2 Development trend of China's automobile industry in the world automobile industry system

(1) China's automobile industry accelerates its integration into the world automobile industry system. With the further expansion of the scale of investment by multinational corporations in Chinese automobile enterprises, more and more Chinese automobile enterprises will enter into the system of multinational corporations, and China's large automobile enterprises are bound to cooperate more closely with multinational corporations. Multinational corporations will not only play an important role in the merger and reorganization in the field of vehicle production, but also in the merger and reorganization of auto parts enterprises. With the opening up of the sales system of Chinese automobile enterprises to the outside world, the competitiveness of multinational corporations in China's automobile market will be further improved. The interdependence between China's automobile industry and developed countries' automobile industry is bound to become increasingly close. The way of strategic alliance between foreign automobile manufacturers and Chinese automobile enterprises is more flexible and open. Chinese automobile enterprises and multinational corporations will be long-term comprehensive cooperation, but also comprehensive competition.

(2) the two sides complement each other's strengths, *** with the development of the world market and the Chinese market, share the benefits. 2002 China's automobile market has become the world's fastest growing emerging market. The annual growth rate of demand for cars in China will remain at 11-13% by 2010. With China's gradual reduction of tariffs, the realization of economies of scale of automobile production enterprises, car prices will also be reduced at a faster rate, into the field of car consumption will be more and more multinational corporations will share the benefits of China's expanding auto market with Chinese partners.

China's auto industry parts will be more into the global procurement system of multinational companies, China's auto industry will become an important processing and production base for some of the multinational companies vehicle products. Multinational corporations gain cost advantages and diversify production and operation risks by transferring production and manufacturing to China. China's automobile industry has certain comparative advantages in the international automobile division of labor: the wages of Chinese automobile workers are only equivalent to 1/10-1/15 of Japanese workers; it has a certain degree of competitiveness in the production of commercial vehicles; it has a certain degree of competitiveness in the production of certain labor-intensive automobile parts and components; it can be expected to have a certain degree of competitiveness in the production of mass-produced popular sedans ; it also has a low-cost advantage in technology development; Chinese companies are very familiar with China's automobile market, and multinational companies have technological advantages and the advantage of global production and distribution.

(3) The position of Chinese automobile enterprises in the world automobile industry system will be gradually improved. Among the elements of capital, market, labor and technology for the development of automobile industry, what China needs most is technology. Since there is a large technological gap between China's automobile industry and that of the developed countries, the transfer of technology to China will not pose a threat to the multinational corporations. As an important production link of multinational corporations, the strength of China's automobile industry can make multinational corporations make more effective use of the cheap labor obtained in China to gain international competitiveness.

With the gradual acquisition of technological development capability of Chinese automobile industry enterprises, the utilization of Chinese technical talents by multinational corporations and the resultant technological spillover effect, the allocation of technological development capability of Chinese automobile enterprises globally, and the prosperity of the Chinese automobile industry attracting senior talents in China's high-tech industry, the position of Chinese automobile enterprises in the world automobile industry system will gradually improve. The mode of design by multinational companies and production by Chinese enterprises will gradually change. First, it will be changed to Chinese enterprises to participate in the design (with multinational corporations or professional foreign automobile design companies); secondly, Chinese enterprises' designers will mainly carry out the design; thirdly, multinational corporations will entrust certain design and development work to Chinese designers, but multinational corporations will hold the core technology; fourthly, Chinese automobile enterprises will develop their own intellectual property rights and higher level products. This process takes about 15 years. If Chinese automobile enterprises can seize the opportunity of the new technological revolution in the automobile industry, this process can also be greatly shortened. In short, China's automobile industry enterprises will gradually improve the development and design capabilities, and ultimately will form the entire automobile enterprises and multinational corporations in the research and development of the division of labor.

Four, policy recommendations

1 accelerate the introduction of policies to encourage automobile consumption

In 2002, China's transportation equipment manufacturing industry has exceeded the electronics and information industry to support China's economic growth as the main driving force. At present, there still exists a situation of excessive and indiscriminate charges in the intermediate links in car consumption. In order to maintain the rapid development of the national economy and the automobile industry, it is necessary for the government to introduce policies to encourage car consumption as soon as possible. Localities should also take into account the technical status of China's automobile industry when formulating policies related to environmental protection, and leave sufficient leeway to avoid a large negative impact on automobile demand.

2 Tackling major ****use technology projects in the automobile industry with government support

Currently, the production and manufacturing capacity of China's automobile industry is ahead of its technology development capacity. The biggest bottleneck in the development of China's automobile industry is no longer capital and market, but technology. China's automobile industry, if the long-term technological dependence on multinational companies, it is impossible to change in the world automobile industry system in a lower position. The world automobile industry is currently in the midst of a technological revolution, electric vehicles, hybrid vehicles, fuel cell vehicles from a technical point of view, has completed the main breakthroughs, is now mainly commercialization, industrialization of the promotion. Hybrid drive system technology has matured, Japan's Toyota and Honda have new hybrid cars on the market. Fuel cell technology is developing rapidly. in January 2002, the U.S. government-supported Freedom Cooperative Automotive Research Program (FREEDOMCAR) was introduced, the goal of the program is to develop commercially promising hydrogen fuel cell vehicle technology and hydrogen supply infrastructure to greatly improve the environment, with the goal of accelerating the realization of automotive fuel cell commercialization. Chinese automobile industry enterprises should have a full understanding of the technological revolution facing the automobile industry and intervene in the relevant research in a timely manner. The Chinese government should organize joint research for the major new technology projects and basic research projects used in the automobile industry, and at the same time formulate relevant policies to promote the industrialization of new technologies.

3 Actively promote the merger and reorganization of auto parts enterprises

China's auto parts industry is a relatively weak link in China's automobile industry, but it is also the most hopeful to become a link with world impact. The government should actively promote the merger and reorganization of auto parts enterprises, for specialized auto parts enterprise groups to give policy support, and encourage foreign auto parts enterprise groups to merge and reorganize China's auto parts enterprises.

4 Utilization of WTO mechanisms to protect China's auto industry

In 2002, China's auto industry performed very well, and the auto import quota played an important role in protecting China's auto industry. With the further reduction of import tariffs, increasing quotas, and the further opening of the domestic automobile trade system to foreign companies, Chinese automobile enterprises are facing a more severe competitive situation. Therefore, it is still necessary to carefully study the protection policy under the new situation. As the key to the development of China's automobile industry lies in auto parts and components, the tariffs on auto parts and components have been adjusted downward at a fast pace. Therefore, the use of the WTO mechanism to protect the automobile industry should mainly focus on the auto parts industry, through the monitoring of key auto parts industry damage, and provide timely protection to the relevant enterprises. References]

[1] China Automotive Technology Research Center: China Automotive Yearbook (2002).

[2] China Society of Automotive Engineering: "World Automotive Technology Development Report" (2002).

[3] Institute of Industrial Economics, Chinese Academy of Social Sciences: China Industrial Development Report (2002), Beijing, Economic Management Press, 2002 edition.

[4] Zhao Ying: "The development trend of China's automobile and the trend of industrial policy," the Office of the Chinese Academy of Social Sciences, "Leadership Reference," No. 35, 2002.