Chinese car market
On the basis of these findings the methods of market entry will then be analysed in order to be able to recommend BMW a method of market entry for access to the Chinese car market.
China is a communist state that however lately has become more influenced by the capitalistic style of the west. Regarding the Chinese car market it has undergone major reorganisation at the central government level resulting in that the State Economy and Trade Commission have become responsible for the car industryAAASs macro planning. This is believed to result in decentralisation of power to provincial governments and automotive industry departments.
Since China joined the WTO in December 2001, the Chinese government has made several changes that have an effect on the Chinese car market. In order to obtain know-how and technology the government is making efforts to attract FDI and international trade. Due to WTO agreements China has agreed to remove local content requirements. In addition other requirements from the WTO to open up the market such as reducing tariffs, removing quotas and allowing foreign companies to distribute their products in China, is making the Chinese market a much more easily accessed market to foreign companies who wish to enter the Chinese market.
According to apecsec.org the government is encouraging consumers to spend money on cars, housing, telecommunications, tourism, cultural entertainment, sports and medical care. In order to improve the environment for the car buyer, a credit system is about to be founded and developed. It was felt that the credit system could substantially benefit the Chinese car market. Last year only 20% of the 720,000 cars sold in China were on credit, so a functioning credit system would likely boost sales. (tdctrade.com)
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