An Evaluation Of The Innovative Capabilities Of Chinese Car Manufacturers

Less developed countries allow multinational corporations (MNCs) to carry out businesses in their territory in exchange for economic and social benefits. But the fact remains that, by shifting businesses from one territory to another, MNCs apart from providing benefits to the host country, are also responsible for damages at the individual as well as institutional levels in the form of resource exploitation and self dominance. China, being a less developed country, adopted the same policy (Open policy, 1980s) of inviting MNCs for investment in different sectors including its automobile industry with the aim of gaining economic benefits and upgrading its competitiveness through innovation, science and technology. But this strategy has not been very successful so far, for the reason that MNCs have not been willing to transfer their technological know-how due to the fear of losing market dominance.From the very beginning of China's open policy (1980s), MNCs have invested heavily and continue to control the major portion of its automobile market. Due to lack of capital, technology and expertise; most of the domestic car manufacturers depend highly on foreign assistance and are forced into joint ventures and product licensing, making it tougher for them to survive and increase their share in the market which has become the world's largest consumer market (January, 2009) and to become the world's largest automobile manufacturer in the year 2014.This thesis aims at evaluating the innovative capabilities of the Chinese Car Manufacturers in comparison with the other countries' and has been divided into seven chapters. Chapter one provides an introduction by highlighting the context, significance and aims of the research and explains the methodology used therein. Chapter two provides a review of the literature and forms the basis of the initial propositions, while chapter three gives an overview of the Chinese automobile industry. Demographic analyses have been carried out in chapter four to get an insight of the Chinese Car Industry from different perspectives.Statistical and mathematical methods have been used to evaluate the innovative capabilities of the Chinese Automobile Industry in Chapter five, including Descriptive Statistics, Early Warning System and Weighted Competitiveness Model. The Early Warning System aims at finding out the innovative level of the Chinese car industry by comparing the expectations and actual feelings of Chinese nationals. While the Weighted Competitiveness Model aims at evaluating the innovative competitiveness of the Chinese Car Industry at the international level by comparing the expectations and actual feelings of Chinese nationals for the Chinese Car Industry with those of the Non-Chinese regarding their own countries' car industries. Two case studies have been discussed in chapter 6 as an observation of how recently established Chinese car manufacturers are focusing on innovation to enhance their competitiveness. Finally, conclusions and recommendations have been made in chapter seven.As opposed to the conventional view, our research findings reveal that: (a) The Chinese Car Industry possesses innovative capabilities at a satisfactory level; (b) The Chinese Car Manufacturers are equally competitive as their foreign counterparts are; and, (c) Innovation has become the focus of Chinese Car Manufacturers for enhancing their competitiveness and it would be no surprise to see the next generation vehicles coming with a Chinese brand name.