Title: China's auto industry: success despite policy

Authors: Michael J. Smitka

Addresses: Williams School of Commerce, Economics and Politics, Washington and Lee University, 2014 W Washington St., Lexington, VA 24450-2116, USA

Abstract: China's industrial policy aimed to foster 'national' producers of a low-cost 'people's car' based on domestic technology that would serve as an engine for exports. Toward that end the government employed a strategy of import substitution industrialisation (ISI). Narrowly interpreted, this policy has been an abject failure: national producers struggle, cars are neither utilitarian nor domestic in technology, while exports are limited. Nevertheless, China is today the world's largest producer of passenger vehicles, with high levels of local content and increasing levels of local engineering. It is poised to become a modest export base and a locus for vehicle engineering and development by global auto firms.

Keywords: China; import substitution; industrial policy; automobile industry; Volkswagen; General Motors; auto parts suppliers; corporate strategy; automotive components; component suppliers; automotive manufacturing; exports; passenger vehicles; local content; local engineering.

DOI: 10.1504/IJATM.2016.079228

International Journal of Automotive Technology and Management, 2016 Vol.16 No.2, pp.114 - 129

Received: 15 Dec 2015
Accepted: 24 Feb 2016

Published online: 22 Sep 2016 *

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