Institutional Changes and Globalisation Alter the Landscape of Chinese Auto Industryi

NIE Ming1( 聂鸣 ) and ZHOU Yu2( 周煜 )
1,2 The School of Management, Huazhong University of Science and Technology

Editorial note:

China’s automobile industry has received worldwide attention thanks to its impressive achievements. In 2006, China manufactured a total of 3,869,000 cars; furthermore, a multitude of state-owned automobile enterprises (SAEs) represented by FAW had begun to roll out a new generation of proprietary brand cars. The proprietary brand market share of SAE subsidiaries and emerging carmakers reached 25.7% and SAEs such as Chery and Brilliance entered into an agreement on whole vehicle exportation and overseas plant construction. What is the real driving force behind the growth of China’s state-owned automobile manufacturers? In this article, the authors make use of institutional theory and global value chain theory to explore the path of China’s state owned automakers. They find that SAE organisation is evolving from a joint venture model to a proprietary innovation model through the cooperation with multinational motor companies (MMCs). Moreover, that the national and local institutional factors as well as the transfer of production links by MMC-led GVC have become the driving force for SAE growth and behavioural pattern transformation.

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