Chinese Car Market

20 Pages 5026 Words

Introduction
The aim of this report is to evaluate the suitability of China as a new foreign market for BMW and it¡¦s product cars. The suitability of China as a new market for BMW will be assessed in the PESTEL analysis. The degree of competition that already exists in China for cars will be evaluated in the Porter¡¦s Five Forces Analysis. In the report the extent of FDI present in China and the suppliers of the FDI will also be assessed in order to properly evaluate the suitability of China as an opportunity for BMW as a new market for cars.
In addition a SWOT analysis will also be provided.
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.

PESTEL

Political
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 industry¡¦s macro planning. This is believed to result in decentralisation of power to provincial governments and automotive industry departments.
(www.austrade.gov.au)
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...