World Trade Organisation (WTO) and the response of vehicle manufacturers in China: a comparative study

This paper takes a snapshot view of managerial views in the Chinese automotive industry, one year after China joined the WTO. Two cases are used. One is a long established joint venture between Volkswagen and Shanghai Automotive (SAIC), the other a state-owned enterprise without the benefit of such a long-term alliance. Six hundred questionnaires were administered electronically, 349 were returned completed. The responses were broken down into pre-WTO, post-WTO and regulatory environment. The results show that competitive pressures have intensified since China joined the WTO. The automotive industry and firms within it are undergoing significant transformation in their strategies and managerial structures. State-owned enterprises (SOEs) face re-structuring burdens that are placing them in an uncompetitive situation unless they can get state aid and/or assistance from partners, as in an international joint venture (IJV).