Automobile Companies of the Chinese Market - Research Paper Example

Over the past 20 years, the population of China rode on bicycles and animal-drawn carts. But steadily and gradually automobile vehicles have paved themselves a road in the economy of China. Over recent years, many countries have established automobile manufacturing operations in the country which has led the automobile industry in China to grow at a rapid pace in production terms.This rapid progression does not only owe to the increasing number of auto manufacturers. The rapid progression is also due to the structure of the auto industry in China.

In the early stage of auto-development, China had opened its door to the world as a way to increase foreign investment in the country. As a result, many foreign joint ventures were established as seen below:In order to fully understand the changing environment of the auto industry in China, the secondary research will focus on the environment, modes of entry, marketing strategies of foreign auto companies and the market segmentation of these countries so as to imply the knowledge in determining the future of other foreign vehicle manufactures in China.

The annual growth rate of the Chinese auto-industry for 2005 was 22% and is expected to exceed this rate in the future (Yuan, 2005). According to the article published by Yuan (2005), the EIU (Economist Intelligence Unit) estimated that the sales volume of a personal car in 2015 will increase three times its current sales reaching up to 6.9 million. According to China Research & Intelligence (2009) report, the Chinese automobile industry kept a steady growth pace in the economic depression and turmoil with annual sales of 9.

39 million.