China's Car Market Structure And Corporate Behavior

Under the industrial policy, the Chinese passenger vehicle industry, formed in last 50's, basically was slowly developed in a closing environment. Since the implementation of the reform and open policy, this industry had obtained development gradually, and became one of our country's pillar industries. Especially, after joining WTO, the market becomes an open market gradually. Enterprise's market competition behavior as well as the market structure is changing. The research on the relationship between enterprise behavior and market structure receiving more attention.Based on an historical review of the forming process of the industry as well as the market, with industrial organization theory, this dissertation has carried on theoretical analysis and positive analysis to the market. Especially, under the hypothesis of product vertical differentiation, this dissertation has discussed enterprise's price competition behavior and the non-price competition behavior, and studied the chain-reaction mechanism of price competition behavior, as well as market equilibrium. This dissertation has also conducted the research on the influence of enterprise's behavior to the market structure as well as the social welfare condition. This dissertation, by the analysis of the history of the industry and market, may obtain some judgments:Firstly, the property scale of the industry assumes the fast growth trend, but the tendency disperses gradually, and the industrial scale or enterprise scale is small. Looking from the sales concentration degree angle, the market structure evolution has the characteristics: 1. the minority investment body is the core of the market; 2. the market concentration degree is dropping gradually and the market monopoly power is being weaken. The market in china is in the process of transition from a closed market, which is dominated by policy mechanism, to an open market, which will be dominated by market mechanism.Secondly, the pricing strategy of enterprises in the market is evolved under the government policy. Under the government pricing stage, the enterprises mainly took the strategy of output decision-making, and the market equilibrium was produced under the interaction of market demand and the output decided by enterprise. Under the stage of having the pricing right, the enterprises had the motivation of using price reducing strategy.