Automotive industry is a high correlation of scale benefits are obvious, the importance of capital and technology intensive industries, is worthy of modern economic growth, leading industries and pillar industries, but also a countrys pillar industries. History shows that economic growth in developed countries, the auto industry economic take-off process has played a leading role in the new century, the rapid development of Chinas automobile industry, Chinas auto market has grown, and has been ranked third in the world, second only to the United States and Japan.The development process of Chinas automobile industryIn 1971, Chinas auto output exceeded 10 million units;In 1980, automobile production exceeded 200 000;In 1992, automobile production exceeded one million;In 2002, the automobile production exceeded 3 million;In 2003, automobile production exceeded 400 million;In 2006, the new production of 1.57 million, growth 28%Competition At present, China has 355 brands, of which 69% own brand, but in 100 car brands, own brand only 37. Domestic sales of cars, the joint venture production of foreign brands accounted for about 90% market share, domestic brands are mainly concentrated in low-emission economy car, there are Geely, Chery, Hafei and so on.Competition At present, China has 355 brands, of which 69% own brand, but in 100 car brands, own brand only 37. Domestic sales of cars, the joint venture production of foreign brands accounted for about 90% market share, domestic brands are mainly concentrated in low-emission economy car, there are Geely, Chery, Hafei and so on.Chinas auto analysis of the political environmentSupport of national policy:1, the national strategy of independent innovation in the Eleventh Five-Year Plan as a national strategy of independent innovation, Chinas automobile industry pointed out the direction.2, the states industrial policies. As a national focus on the development of pillar industries, the state invested a lot of human, financial, and accumulated a certain amount of talent and experience to lay the foundation for further development.3. Ban small cars. National Development and Reform Commission in January 2006, six departments jointly issued a circular requesting the cancellation of all for energy-saving small cars driving routes and taxi operators and other limitations. This directly contributed to sales of small cars.Limitations of national policy:1, car tax. The current vehicle excise taxes too heavy, unreasonable structure, 17% VAT, 10% of the purchase of additional tax, 3% to 8% consumption tax, there are countless variety of charges, resulting in consumers “do not afford to use “So, restricting the automotive consumer market. And highway toll stations and more, to increase consumer spending.2 national macro-control policies. China is currently financing a single enterprise, mainly by bank loans, since the countrys austerity policy, bank lending crunch, the financing problems faced by the private small and medium enterprises.The corresponding part of the policies and regulations: “passenger car fuel consumption limits“: help curb the momentum of rapid growth in energy demand “Automobile Industry Development Policy“: requires local governments to be abolished is not conducive to auto consumption policy accession to the World Trade Organization: to cancel car import quota management products, continue to lower car import tariffs “second-hand car market management approach“: used car market business diversification “auto brand sales management for the draft“: proposed authorization as long as car manufacturers, imported cars and domestic cars meet the demand can be sold. “automotive industry“ Eleventh Five-Year “Plan“: the development of own brands “automobile industrial policy“: a certain degree of ease of long-term problem in Chinas automobile industry development “policy bottleneck“ problem.Economic factors are the basis for the automotive industry to take off. Since the reform and opening up, Chinas rapid economic development has always been at the track, raise the level of the national economy. In the context of rapid economic growth, consumer durables market will maintain a trend of rapid growth, especially in Chinas auto market.As of 2008, Chinas economy has continued for five years to reach or exceed 10% growth rate, economists expect Chinas economy in 2008 will continue to maintain steady and rapid growth, Chinas economic prospects remain optimistic view.U.S. financial turmoil sweeping the worldFrom July 2007 the U.S. subprime mortgage crisis started five shock waves, leading to Bear Stearns and Lehman Brothers Asset Management has bankruptcy, Fannie Mae and Freddie Mac, two mortgage companies serious losses, the Fed and the Treasury to save the three injection City.Dragged down by the subprime mortgage crisis, Japans second-quarter GDP shrinking by 2.4% over last year, marking the biggest drop in seven years; Eurozone GDP fell 0.2% to an a