Started in 1984, the first wave of investment in the automobile industry in China includes the establishment of Beijing Jeep and Shanghai Volkswagen (Wu, 2006). Six years later, the second wave started when FAW-Volkswagen, Guangzhou Peugeot, and Dongfeng- Citroën was manufactured and publicly introduced in Chinese market (Wu, 2006). Sometime in late 1990s, the third wave happened when GM, Toyota Motor, and Ford secured their respective car assembly deals at Shanghai GM, Tianjin Toyota Motor, and Chang’an-Ford respectively (Wu, 2006).
Other than the foreign-owned automobile manufacturing companies that entered the Chinese market between the years 1980s to 1990s, the fourth wave of investment can be noted when local automobile manufacturing companies like Geely Group, Brilliance China, and Shanghai Cherry started selling cars back in 2001 (Wu, 2006).
The continuous development and transfer of foreign automobile technology together with the huge demand for new cars contributes a lot to the success of Chinese automobile industry. In 2009, the total number of cars, trucks and other vehicles sold in China was 13.6 million which accounts for 46% increase from the previous year’s total vehicles sold (Lewis, 2010). In fact, China’s Automobile Industry was the 2nd largest Industry back in 2008. (Table I – China’s Top Ten Industries)
The main objective of this study is to gather existing and most current literature regarding the degree of competition in China’s automobile industry. Aside from determining the theoretical approaches that can be use in examining the degree of competitiveness in China’s automobile industry, the gathered literature will provide the readers with useful information regarding significant issues that has been discussed about the advancement of its existing automobile technology including the legal, economic, social, and political factors that could affect the Chinese’s