While The People''s Republic of China was newly established in 1949, its founder, Mao Ze-Dong, had drawn a blueprint of the development of this nation’s automobile industry. He said to his entourage at his first visit to the Soviet Union, “We should also have our factories that are as large as Stalin Automobile.”
There are four necessities of becoming a powerful country in automobile industry for China. First, to own the ability of developing products independently. Second, to build a complete system which includes the producing of all components, rather than being an assembly line. Third, to establish a comprehensive system of marketing and technical services. Fourth, complementary measures and supporting from related industries. However, automobile industry in China was so limited by its general environment that the China government had to set up a number of protective policies to foster its automobile industry.
Since China started to reform and open-up, its private economy has achieved a rapid development. At present, the private economy is not only an important source of China’s GDP but also a basic way to solve the employment problems of the society. Moreover, it has been playing a positive role in achieving common prosperity, accelerating and deepening economic reforms, as well as promoting the cultural and social progress in China. Though, the private enterprises are being hampered when developing and their social status is poorly incommensurate with the status of their development. It is a common phenomenon, especially in the less developed regions.
It took China''s Geely Automobile 20 years, as a manufacturer of refrigerators’ parts and components then, to become the largest private automobile company in China. Geely started to set foot in automobile industry in 1997, and the process of its growth is a condensation of the spiritual strength of self-improvement. The trace of Geely’s development also resembles the hardness that the manufacturer industry in China had gone through to turn from being large to being strong. At first, Geely enter the automobile market with cost advantage. Nevertheless, according to the strategy that Geely need to fulfill its enterprise mission, Geely is transforming itself to produce the safest, the most environmentally friendly, and the most energy-efficient cars. This transformation was launched in May 2007, and has been verified by a series of overseas mergers and acquisitions.
This thesis is to discuss the development of the automobile industry and private enterprises in China and the related problems and policies. Achieving this, Geely Automobile is studied as a case to discuss how Geely has developped and successfully won a place of its own during less than 20 years.