The Impact of Joint Ventures on China's Auto Industry

Paper Summary:

This paper demonstrates the role that joint ventures have played and will play in China's automobile industry. In particular, the paper demonstrates the several phases of joint ventures in China's automobile industry and suggests how previous joint venture phases have prepared for China's current burgeoning strength in automobile production. This paper primarily relies on inductive methods in order to understand three major movements in China's burgeoning auto industry: the changes in the global auto industry, the concomitant changes in the Chinese joint venture landscape, and the almost unnoticed growth in the Chinese auto industry. The writer concludes that China's emergence as a major market and global manufacturing competitor can be traced to its success in attracting and learning from, global competitors.

Outline:
Synopsis
Introduction
Literature Review
General Industry Trends
Attitude Phases in Views of the Chinese Auto Market
Strategic Groundwork for Joint Ventures
International Changes in the Automobile Industry
Industry Growth: Comparison with Other Countries
Strategic Imperatives in the Automobile Industry: Historical Evolution
Changing Structure of the Auto Industry
Implications of Strategic Evolution for the Chinese Auto Industry
Early Start of the Chinese Automobile Industry
1911 to 1949
1949 to 1977
1977 to 1985
Early Joint Venture Experience
The Legal Underpinnings for Joint Ventures
Beijing Jeep: Success and Failure of a Joint Venture
FAW-Volkswagen, Better Long-Term Goal Congruence
Additional Entrants During the Period
Dearth of Japanese JV Assemblers
1985 to 1997
1997 to 2006
Pressures for Reform: 2000 to 2006
Current Determinants of Growth in the Chinese Auto Industry
Chinese Joint Venture Evolution: the Future
Chinese Auto Parts Joint Ventures
The Case of Bosch
Push for Fuel Economy
Conclusion
Bibliography

From the Paper:

"China, in short, has evolved economically at a time when the global automobile industry has never needed it more. China is both an attractive market for automobiles, and an attractive supplier of parts, subassemblies and, soon, completely-assembled automobiles and other vehicles. From 1977, when China lacked even the vocabulary to negotiate joint venture agreements, to today, when every major automobile manufacturer in the world is working alongside Chinese companies, China's bargaining power with and expectations of joint venture partners has increased exponentially.
"Since automobile parts are integrally tied in to the automobile industry, their evolution, joint-venture participation and growing role in the future will also be discussed in connection to joint ventures. More importantly, most of the profits generated in today's global automobile business are being made in the parts industry, rather than final assembly. Parts companies' progress in consolidation, in R&D and emerging brand strength make them highly sought-after as joint venture partners in China and elsewhere in the world."

Sample of Sources Used:

• Aswicahyono, H, Anas, T and Rizal, Y. "The Development of the Indonesian Automotive Industry." East Asian Bureau of Economic Research, 1999: 1-37.
• Autoparts Report. "Ford, China Joint Venture Awaiting Government Approval - Brief Article." Autoparts Report, 3 May 2001: n.p.
• Auyeung, PK. "A comparative study of accounting adaptation: China and Japan during the nineteenth century." Accounting Historians Journal, 2002: n.p.
• Baker, CR and Bettner, MS. "Interpretive and Critical Research in Accounting: A Commentary on its Absence from Mainstream Accounting Research." Critical Perspectives on Accounting, 1997: 293-310.
• Bells, M. "History of the Automobile Industry." Inventors. 2007. http://inventors.about.com/library/weekly/aacarsassemblya.htm (accessed August 30, 2007).

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