The competitiveness analysis of Chinese automobile industry based on Improved Porter Diamond Model

Abstract

With the rapid development of Chinese automobile industry, it has become one of the pillar industries of the national economy, which plays an increasingly important role in the rapid growth of the national economy. This paper aims to investigate the competitiveness of Chinese automobile industry in different provinces and cities and to quantify the core competitiveness. Improved Porter Diamond Model is adopted to evaluate the factors that affect the Chinese automobile industry, including Industrial structure, Production factors, Demand conditions, Related and supporting industries. The data used for the analysis mainly comes from China Automobile Yearbook. Entropy Method and TOPSIS are applied to calculate the weights of each factor and evaluate the quality level of the indexes. According to the analysis, Guangdong, Jiangsu, Shanghai, Jilin, Shandong, Hubei, Zhejiang, and Beijing have higher scores and top ranking, showing strong core competitiveness, which is consistent with the reality. Tibet, Qinghai, and Ningxia ranked last because of their geographical location, which restricted the development of their automobile industry. The model can truly rank the province’s automobile core competitiveness quantitatively, which is consistent with the reality and has high practical application value. Overall, these results shed light on guiding further exploration of the evaluation and quantification of core competitiveness in different industries.