CHAPTER 5

China and the Rise of New Producers

China has by far the largest automotive market, almost 25 million vehicles. Therefore, any analysis of the dynamics of the industry must give it special treatment. Its policy environment is similar to that of many developing markets, and so a presentation of its experience illuminates the strengths and weaknesses of the industry in much of the rest of the world.

Introduction

Developing countries face a policy challenge, given economies of scale in production: should they make vehicles at home, or import them? A few countries—Mexico, Canada, and Eastern Europe—had the good fortune to be able to integrate with large neighboring markets. Then there are countries such as China, where in 1990 the market ...

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