Automotive Service Industry

Growth of Automotive Industry in mainland China China Automotive Industry In the words of Qiu (2005 , China s self-propelled pains was very weak previous to the country s word sense of the open door policy What passed for a railroad car diligence started in 1956 when the First Automotive full treatment (FAW ) was established with the economic aid of the former Soviet Union . FAW first produced the Jiefang line of trucks , which was followed by the passenger cars called Hongqi designed mostly for use of high-ranking giving medication officials . In the infancy stage of the industry , motor vehicles were produced for utilitarian purposes not for luxury , since the process followed the centralized system mourning(a) of market orientation . Thus , trucks and buses were manufactured for transportation , jeeps for legions use and tractors for agriculture The same production pattern was reflected in the activities of the car firms that followed FAW , first by the Second Automotive Works (SAW ) and then by the Shanghai Automotive Industrial potbelly (SAIC ) in 1958 Gradually , the pioneering companies achieved the engine room to produce cars of world standards however production remained small-scale , low quality and inefficient because of the immovable orientation that looked at motor vehicles as items of luxury . The turn over of the industry are also tied by a plethora of rules , such as the restriction on the procure of cars by private individuals , which discouraged manufacturers from producing sedans . In effect , the sign car firms were marginal and inefficient but they stayed on because of such factors as local giving medication assistance and protection (Ibid . besides , the industry presented little prospects for a profitable venture that the identification number of local players remained the same for years at less than 117One of the deterrents to the lacklustre growth of the domestic car industry at the sign stages was the tariff and quota system heavily imposed on the area .

The market potentials were vast , with government purchases themselves capable of stoking the development of the car market , but unusual firms that could provide the needed technology were discouraged by the regulation that limited the number of vehicles that laughingstock be imported . High levels of consumption tax and vat were also imposed on the purchase of cars (Eun Lee , 2002 . The proceeds was that determines of locally produced cars were much higher than world prices . Even if you view as in the price effects of import licenses and other non-tariff quotas , the cable car price in the Chinese market was between 1 .25 and 3 .45 times higher than the world market price . Another reason why foreign firms were not just now crowding out the local carmakers was the fact that cars were not considered an alpha export product for China as these were assembled mainly for exchange in the domestic market (Dullien , 2004 . All these dampened the interest of foreign automotive firms in the Chinese market (Song Yu 1999 . The Chinese government seemed to be aware of these disincentives to foreign firms and the need to liberalize the industry but took time in changing the rules on...If you want to bring down a full essay, order it on our website: Orderessay

If you want to get a full essay, wisit our page: write my essay .