Investment Evaluation Models Of Automobile Enterprise Under Uncertainty

As a “special” industry addressed by the government and therefore enhanced for continuous management improvement,the auto industry in China gains a momentum development all these years.Nevertheless,uncertainties like industrial policies,consumption environment,price and cost,product quality and so on still exist in the processes of R&D,production and operation of auto manufacturers,resulting in uncertainties impacting the decision-making and investment evaluation in the process of auto product development.Due to the special characteristics of China's auto industry and the influence of economic globalization,investment evaluation research work under such uncertainties for China's automobile enterprises shall demonstrate strong theoretical and realistic significances in respect of not only serving as effective means to upgrade the levels of investment decisions and investment benefits,but also satisfying the requirement of implementation of visions for scientific development under the guidance of the state policy and realization of continuous development as of corporate behaviors.In consideration to the special characteristics of China's auto industry and based on broad investigations in both domestic and foreign literature researches and the existing research results,this thesis carries out an overall and systematic study on the theories and relevant methodologies for the investment evaluation of automobile enterprises under above-mentioned uncertainties from the following three perspectives:1.Realistic basis for the study of this thesis.This thesis describes in details and systematically the historical development and existing investment models in respect of investment management of automobile enterprises,reviews the historical changes in the financing modes of China's auto industry in over 50 years and the annual investment of automobile enterprises,analyzes in depth the investment opportunities,risks and entry hurdles of China's automobile enterprises and lays down new requirements for investment management of automobile enterprises under new auto policies as well as the future trends for evaluation of automobile investment.Through in-depth analysis on the investment decision-making in the heavy-duty truck project of Beiqi Foton Motor Co.,Ltd.,theories and methods practically applied in the decision-making on investment items in China's current auto enterprises are discussed.With summaries of the problems and defects found in the existing practices,the proposition for this thesis is outlined.2.Theoretical framework of this thesis.This thesis takes the uncertainty of auto industry and life cycle of automobile products as two basic premises while technical economy,life cycle theory,investment evaluation,value chain management and so on are used as its theoretical basis.It applies real option as the major research method,and in combination of qualitative and quantitative methods,through analysis of the consistencies on classifications of auto product life cycles and phases of auto project investment,this thesis establishes models underlying the investment decision-making and classification of investment phases in respect of auto product life cycles.In addition,a mathematical description is included in areas of factors,phases and models influencing identification.Through determinants of the impacts among several investment phases in automobile projects and what the previous phase should consider for the possibilities of later phase investment,a multi-phase real option approach model is generated on the basis of the uncertainties of auto industry and its products.3.Application of theoretical models.Through applications of the theories and methods to decision-making in the heavy-duty truck project of Beiqi Foton Motor Co.,Ltd.,the correctness and practicality of the theories,methods,and models for automobile investment evaluation are therefore verified.In consideration to the contents of the whole thesis,newly generated ideas mainly include:1.On the basis of analysis and classification of the characteristics and uncertainties of different phases of automobile product life cycle,it is proposed that predictions in different phase of automobile product projects and the life cycle of automobile products should be interlinked and investment phases for automobile product projects are defined with product life cycle theory.Hence,decision points for accurate phased investment are derived,i.e.the trigger points for phased investment decision making.2.This thesis introduces product life cycle theory into the study of investment evaluation and establishes decision points for automobile enterprises and classification models automobile product investment phases based on the auto product life cycle.A mathematical description is also included in areas of factors,phases and models influencing identification.3.This thesis adopts real option approaches in the investment evaluation in auto industry.Based on analysis and classification of life cycle of automobile enterprise and uncertainties,this thesis quantifies and modularizes the uncertainties in terms of industrial policies,consumption environment,price and cost and product quality,etc.,improving expressions of the parameters,and a multi-phase real option approach model is generated from the uncertainties of auto industry and its products.The newly derived model further enhances the accuracy and practicality in the investment evaluation in auto industry,resolving issues arising from static state and ambiguities in pastime evaluations.