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Political factors
Chinese government’s attitude towards vehicle industry is supportive and ambitious, especially for green vehicles with low emission. However, without enough efficient measures taken, there exists scarcity of its own big brand in Chinese market. In October 1949, Chinese government has been started to establish the Chinese car industry as a main policy to drive the economy. Since 1985, car industry has been specified as a pillar industry according to seventy-five planning. The success acquisition of Volvo depended partly on Chinese government in 2010 according to Shengyue Gui, CEO of Jili Company. It gained profits from the government subsidy policy until 2011. So for Holden Barina, the introduction to Chinese market would be challenging. At the end of 2010, Chinese government started to implement subsidy policy on the purchase of green vehicles. The small-size cars of Holden Barina could be a good choice with lower price and emission.
Economic factors
Since 2008, china has survived the economy crisis with years of economic growth at a high rate. Based on the forecast report by Chinese state council
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development research centre of its economic growth from 2001 to 2020, economic environment in china would be continuously steady and promising, which means that vehicle industry would keep its momentum.
Social factors
The Chinese consuming habits of vehicles are in transition. Few people would choose to buy a new car with a full-payment, especially for generations of 90s or 80s whose desires of purchase is beyond its purchasing power. More and more people have the general concept of owing a car as a social standard of status. Even though the control of birth has taken effect, china still has a large population base of roughly 1.5 billion and people with driving license are increasing with the mature development of transportation. The demand of vehicles, particularly economical cars with lower prices for family use is enormous in China.
Technological factors
The gap of technology of conventional vehicles has been narrowed down. There is a new trend of technology which can favour energy-saving and environmental protection since the fact that china has been blamed for the problem of carbon dioxide emission. Hence, the development of new energy vehicle would be promising in the future.
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Environmental factors
Protecting the earth is a common sense for the whole world which is a major factor affecting developments of human beings. Chinese government made the policy of sustainable development for the environment as a national policy. Reducing the waste and the cost, decreasing energy consumption and emission is tremendously important for auto industry to protect the environment
Legal factors
Vehicle related laws and regulations in China, comparing to developed countries is not mature enough. There are some blanks in the law system. For instance, in the 2012, a man who wanted buy a car died of car accident while test driving. And who should take responsibility for the damages, the distributor or the other man who was driving. There isn’t a specific and concrete division of liability. So vacancy in Chinese law and the immature law system may add unnecessary risks for companies.
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