The past, present and future of China’s automotive industry: a value chain perspective

International Journal of Technological Learning, Innovation and Development

Volumn 2, Issue 1-2, 2009, Pages 76-118

  Holweg, Matthias ^a   Luo, Jianxi ^b   Oliver, Nick ^c  

^a UNIVERSITY OF CAMBRIDGE   (United Kingdom)

^b MASSACHUSETTS INSTITUTE OF TECHNOLOGY   (United States)

^c UNIVERSITY OF EDINBURGH BUSINESS SCHOOL   (United Kingdom)

Author keywords

automotive; emerging markets; industrial evolution

Indexed keywords

EID: 76549133328     PISSN: 17531942     EISSN: 17531950     Source Type: Journal    
DOI: 10.1504/IJTLID.2009.021957     Document Type: Article

References (45)

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30. The only noticeable exceptions to date are Mexico, which largely produces vehicles for export to the USA and to some extent for Europe (VW Puebla), and South Africa, which produces right-hand drive versions of the Mercedes C-Class, BMW 3-series and VW Golf for export to the UK, Japan and Australasia. From Brazil, the Volkswagen Fox has been exported to Europe since 2005, alongside engines for the BMW Mini. From India, Tata had exported the City Rover to Europe, and Honda is exporting the Jazz model from China to Europe. In comparison with exports from Japan, Republic of Korea, and to a lesser extent, Malaysia (Proton and Perodua), exports from Asia and South America to Europe and the USA are insignificant.
31. The name Dongfeng literally translates as ‘east wind’, which alludes to Mao’s famous saying about the “east wind overwhelming the west wind”, which he made in Moscow in 1957. The name also has a mythological meaning, as during the Han Dynasty, when China was divided into countries that were frequently at war, an easterly wind helped the Han defeat an invading army, and has been considered to bring good fortune ever since.
32. In 2005 China’s motor vehicle production and sales increased by around 27% and 25%, respectively, and in 2006 sales were over 7 million units. (RNCOS report China Automobile Industry Forecast (2006–2010)), http://www.rncos.com/Report/IM050.htm
33. First-tier refers to those suppliers that directly supply parts and components into vehicle assembly plants. Second-tier are those that supply the subcomponents and materials into the first-tier suppliers, and so on. A typical automotive supply chain consists of three to four tiers, whereby the third- and fourth-tier suppliers are generally the raw material suppliers such as steel or glass works.
34. Total motor vehicle output rose from 5.7 million units in 2005 to 7.3 million units in 2006 while that of cars rose from 2.8 million units to 3.9 million units (Chinese National Bureau of Statistics, CNBS).
35. The Big Three were First Automotive Works, Shanghai Automotive Industrial Corporation and Dongfeng Motor Company, the Small Three were Beijing Automotive Industrial Corporation, Tianjin Automotive Industrial Corporation and Guangzhou Automotive Industrial Corporation and the Mini Two were Changan and Ghizou Aviation (see Xia et al., 2002).
36. http://www.chinacarforums.com/changan_automobile.html
37. Knock-Down (KD) assembly operations refer to the approach of assembling and shipping unassembled kits of vehicles to be assembled in foreign markets. In many cases this approach was used to circumvent high taxes imposed on imports of finished vehicles, or to avoid the investments for a full vehicle assembly facility where volumes did not justify this. KD operations can take various forms, from Complete KD kits (CKD) to Semi-KD (SKD) operations, where pressing, welding and painting operations are done locally, whereas the parts are imported in sets (as kits) from abroad.
38. Sport Recreational Vehicle (SRV); Sports Utility Vehicle (SUV).
39. http://www.jdpower.com/corporate/china/download/TDunne_BWArticle_June2007.pd ‘Future Chinese Vehicle Exports’, by Tim Dunne, Director Asia-Pacific Market Intelligence, J.D. Power and Associates, 2007.
40. Multi Purpose Vehicle (MPV); Sports Utility Vehicle (SUV).
41. http://www.chinadaily.com.cn/china/2007-01/01/content_772955.htm
42. According to the ‘China Automobile Industry Forecast (2006–2010)’ by RNCOS, May 2007 and http://www.buyusa.gov/asianow/cauto.html
43. The segments refer to vehicle classes (largely determined by size): the B-segment refers to small cars (e.g. VW Polo, Ford Fiesta), the C-segment refers to compact cars (e.g. VW Golf, Ford Focus), the D-segment refers to mid-size cars (e.g. VW Passat, Ford Mondeo). (15)
44. http://www.china.org.cn/english/government/224365.htm
45. http://www.businessweek.com/globalbiz/content/jun2007/gb20070604_816866.htm (17)