The Analysis Of The Effect Of Foreign Direct Investment On The Industrial Organization Of Our Country's Car Industry

In the mid-80s, under the guidance of the policy of"Exchanging Market for Technology"and the continuous increasing of our country's opening level, the foreign enterprises enter into our country's car industry massively. Joint ventures led by foreign enterprises, which rely on their advantages on capital and technology, rule our country's car industry for a long time. At present, our country's car production enterprises had certain development, but compared with these Joint venture, we still has big disparity. Under this situation, the analysis of effect which include our country's car industry's market structure, market behavior and market performance given by foreign direct investment, can help our country's car industry use foreign direct investment totally, develop our country's car industry better. This article has theorical and practical significance. This article is mainly divided into four parts:The first chapter elaborates background and significance of this article's topic, reviews the industrial organization theory, summarize the domestic and foreign scholars'research achievements on effect to industrial organization given by foreign direct investment. Finally it explains the research content and the research technique of this article.The second chapter talks about our country's car industry's development before foreign direct investment came, and the basic condition about how foreign direct investment came. The process is divided into four stages: the initial stage for foreign investment's entry, the adjusted stage for foreign investment's entry, the spreading stage for foreign investment's entry and industrial policy standard stage.The third chapter emphatically analyses the effect of foreign direct investment on industrial organization of our country's car industry. This part analyses the effect of our country's car industry from the three aspects of market structure, market behavior and market performance with the industrial organization theory and the international direct investment correlation theories.In order to analyze the effect to our country's car industry's market structure given by foreign direct investment, it is divided it to three factors: market centralization degree, product differentiation and barriers entry. This article uses the data of our country's car industry's market concentration degree from 1996 to 2008 to show the dropping tendency for our country's car industry's market concentration degree after foreign direct investment's entry. It also analyzes the reason for the dropping, and finally pointed out that our country's car industry would have a rising tendency accompanying with the maturity of car industry. This article illustrates the improvement of our country's car industry's product differentiation degree after foreign direct investment's entry. Foreign direct investment also effects our country's car industry's barriers entry. The effect is mainly reflected by policy barrier and economic barrier. Because of the policy's supporting, car industry's Policy-related barriers to entry are descending to some extent, but economy-related barriers to entry are rising. This kind of fact is reflected by three aspects. Firstly, our country's car industry's necessary capital barrier is improved by foreign direct investment. Secondly, our country's car industry's Product differentiation barriers are improved by foreign direct investment. Thirdly, our country's car industry's technology barrier is improved by foreign direct investment.Analyzing the effect to our country's car industry's market behavior given by foreign direct investment is mainly from three aspects: the price behavior, the product strategy and the sales strategy. This article uses the contrast aspect; illustrate the descending tendency of our country's car industry's market price after foreign enterprise's entry. The price has already approached to the world market's price, the car types which have reduced the price are also changing. Using General Motors and Chery Automobile as examples, this article shows that Foreign enterprise's entering promotes various passenger vehicles Production enterprise to take the product expansion or the brand diversification strategy. Using Audi and GM as examples, this article shows foreign enterprise's entering promotes various car production enterprise to enlarge the advertisement delivery dynamics and to try the methods of new advertisement. At the same time, various enterprises also implements the new marketing pattern, establishment specially service center and so on.This article analyzes the effect to our country's car industry's market achievements given by foreign direct investment through three aspects: the economies of scale, the profit level and the technical level. This article also analyzes that foreign enterprises'entry may promote the enterprise to realize the economies'scale theoretically, use our country's car industry's data to show foreign enterprises'entry has enhanced our country car production enterprise's scale truly, and has promoted them to realize the economies'scale. Besides those, this article uses the car industry profit margin to show foreign enterprises'entry has caused the price competition between various enterprises, and also the descending tendency of car industry's profit level. But because of the price's fallback of raw material and electric power, and the changing of product sale strategy, the car industry's profit level has a rising tendency again. Analyzing foreign enterprises'entry theoretically can promote our country's car industry's technical level greatly. However, the result from our country's data is that the promotion to our country's car industry's technology given by foreign direct investment is not very obvious. Our country'scar industry's overall technical level is still low, this part also analyzes the reason of this phenomenon.In view of the above questions, the fourth chapter proposes suggestion for our country's car industry how to improve the usage of foreign direct investment effectively; the concrete proposal is as follows: Looking from the government's angle, the government should strengthen the supervision dynamics to foreign enterprises, use diversified investment strategy; should speed up the construction of national innovation system, promote industrial innovation; should perfect the market regulations and create a fair competition environment; should use of a reasonable policy and support national independent brand. Looking from the enterprises'angle, the enterprises should implement the strategy of independent innovation, enhance the enterprises'competitiveness; should develop industrial clusters and improve the overall strength of industry; The enterprises should also implement strategic alliances, realize economies'scale; implement brand strategy and promote the differentiation and so on.Finally, this part summarizes the research's related conclusion comprehensively and points out that the innovation of this article is that it also thinks about the whole world financial crisis which is about to happen, proposes the methods that how our country's car industry could use the foreign direct investment well under the opportunity and the challenge given by the whole world financial crisis, how the car production enterprise could seize on the chance to enhance their own competitive power, and also points out this article's significance.