Strengths

1. Strong domestic automaker with a high growth rate and market share: SAIC is the largest automobile manufacturer in China which is the world’s largest auto market as of 2017. SAIC is a strong and established domestic automaker and its car sales hit 6.489 million units in 2016. SAIC also has end-to-end presence in the automobile value chain including manufacturing, sales, finance and insurance though which it can enhance the comprehensive competitive capacity.

Political

1. Government incentives propel domestic automakers such as SAIC: Government incentives propel the auto manufacturing industries. The bureaucrat benefit by running various auto companies as they enjoy a steady investment capital from Government. The policy of joint ventures of Chinese and Foreign manufacturers aims at helping the local ones to learn from their global competitors. This strategy also helps establishing large conglomerates of business that can then directly compete with large multinational firms.

2. High vehicle import tariffs and FDI restrictions in China to help domestic companies: The crowded automaker field of China obstructs the individual local companies to build identity. Average performing Chinese firms in terms of return on the investments are becoming demotivated to invest in R&D. To tackle these issues, Government has imposed heavy tariffs on the vehicle imports to encourage local manufacturers. Also there are FDI restrictions on foreign automakers firms investing in China. The Chinese Government is even encouraging investments in R&D sectors to reduce acquisition of Western firms