Automobile Industry In China Case Study

The automobile industry in China started from 1953, and has had a rapid development. According to data showed by China Automotive Industry Association (2012), the total yield of cars were 5,7 million and the sale of domestic vehicles was 5,8 million in 2005, respectively increased by 12.55% and 13.54% compared to 2004, shown in Figure 1. With addition of the sale of around 160,000 imported cars, Chinese automobile market exceeded the one of Japan with the total size of nearly 5,92 million cars, ranked second in the whole world. And the production and sales of cars in China was over 18 million in 2010, resulting that China became the biggest automotive market in the world (Chen, et al., 2012).

Figure 1. Auto trade volume from 2002 to 2011

(2015) talked about the current situation of purchasing second-hand cars in the 3rd and 4th tier provincial cities in China in their article. The researchers illustrate that the main reasons why people in the 3rd and 4th tier provincial cities in China choose to buy second-hand cars are because of used cars’ relatively low price and consumers’ functional requirements. The first reason is easy to understand. Not only the price of second-hand cars themselves is low due to depreciation but also consumers need to pay less vehicle purchase tax and transaction tax to buy a second-hand car compared to a new one. Unlike citizens in big cities like Shanghai, the consumption concept towards cars of people who live in small cites tend to be more practical. External factors such as brands and decorations of cars will not be the first on their consideration list when they purchase a car. To our study, this article has limitation as a reference because it only focused on specific

For example, when Chen & Ma (2013) made an investigation of affecting factors on acceptance-attitude toward used car consumption in premium segment, they came up with 7 factors which related to second-hand cars business as part of external factors, based on the Technology Acceptance Model (TAM). The TAM model could be understood as Figure 4. Those 7 factors include the condition of second-hand cars, reality of information about second-hand cars, price of second-hand cars, after-sales service of second-hand cars and so