The Research On Chinese Car Industry Competition Situation And Policy

Policy-related barriers to the entry of China's car industry has resulted in high market concentration degree, making China's car industry present oligopoly market structure with a high degree, this type of oligopoly market structure is not the result of sufficient market competition. With the opening up of foreign economic, the car industry's market structure is beginning to present the characteristics of monopolistic competition. From the United States,Japan and the European's car industry market structure, a oligopoly car industry with a high degree is a better market structure. Although China's car industry started late relatively, but still have to follow the industry's evolution. As far as China is concerned, China's car industry has a large number of manufacturers, in the evolution of the market structure, whether China's car industry present excessive competition is worthy of mentioning and deeply study. This thesis focuses on China's car industry from 1979 to 2007, use the approach and framework of the theory of industrial organization to analyze the competitive situation and put forward the related countermeasures.This thesis first uses the application of SCP theory to summarize China's car industry's market structure for the past four years, in which to judge the type of the market structure, and analyze the competition intensity under this market structure. The conclusion is that China's car industry belongs to the monopolistic competition market structure, competition has intensified, however, as the market matures, the market capacity will keep stable, on the role of scale economies, large enterprises will expand their production capacity, market concentration will move up further, the market structure will approach the oligopoly with a high degree.Then we explained the competition between enterprises during the motives of improving output with the theory of game theory by means of equilibrium models, and analyze whether or not there will be excessive competition under the balance of market equilibrium. The conclusion is that when the enterprise market capacity is less than the total capacity, enterprises gain market share according to their respective production capacity, so the competitive mode of the enterprises is the amount competition. When the production capacity of enterprises expands faster than the speed of the expansion of market capacity, the competition among enterprises will become price competition. Price competition is bound to bring the reduction in profits, as a rational business, they would slow down the rate of expansion of production capacity, so the phenomenon of obvious overcapacity in the car industry will not occur.Finally, we use the vector error correction model, aimed at analyzing the car industry's entry barriers and competition intensity between enterprises. Based on the above analysis, this paper presents the related policy. The major policy is to remove barriers to entry and exit administrative barriers, improve the market of production factors, and reduce the cost of enterprise exit.