Automotive Industry Facility Location Analysis

Since the90s of last century, Chinese auto industry has been in rapid growth for along time, the auto OEMs’ rapid growth driven the whole automobile industry intoprosperity. At2010, China became the world’s largest automobile production and sales ofpower. With the growing importance of the Chinese market, the large number ofinternational vehicle manufacturers and auto suppliers speeded up the layout of itsexpansion in China to obtain greater profits in the Chinese market. In the expansion of thelayout of all the auto companies, their selections of industrial locations directly affect theoperating conditions, which will affect the success of the enterprises in the Chinese market.Shanghai General Motors Co., Ltd. as a well-known vehicle manufacturer, since itsinception, has been a leading position in Chinese automotive industry. With the rapiddevelopment of the Chinese market and the strategic arrangement of its own development,the demand for a fourth factory was extremely urgent. Therefore, how to select the locationof the fourth plant, to keep the company’s leading position in the industry and improve itsown competitiveness is the strategic issues that Shanghai GM must face.In this paper, the theory of industrial location analysis and summary of the factorsaffecting the industrial district were firstly introduced, afterwards this paper extended thetopic to the analysis of location factors affecting the automobile industry. The effects of theimpact of various factors on the location selection were determined through theestablishment of the linear regression model. Then the detailed analysis of each potentiallocation was carried out. Finally, through qualitative and quantitative analysis of acombination, the result come to the site Wuhan Jiangxia program. The finding of this paperhas important reference value to the automotive companies on China’s expansion layout;meanwhile it also has some reference to other manufacturing enterprises.