"Made in China 2025". Exploring Economic Impacts for German Original Equipment Manufacturers

Table of Contents

1. Introduction

1.1 Problem Description

1.2 Objectives and Research Question

1.3 Structure of the Thesis

2. Theoretical Framework

2.1 The Chinese Automobile economy 1950 - 1987

2.1.1 Great Leap forward 1958 - 1962

2.1.2 The Cultural Revolution 1966 - 1976

2.1.3 Open door policy 1978 - 1990 and post WTO era

2.2 What is the MIC 25 plan

2.2.1 How does MIC 25 differ from previous government plans?

2.2.2 Recent changes of the MIC 25 plan

2.3 German OEMs

2.3.1 Situation of German OEMs

2.3.2 China´s importance for German OEMs

3. Methodology

3.1 Data and methods

3.2 Porter Diamond

3.3 Identifying the impacts

4. Analysis

4.1 Results of the Literature Review

4.2 Porter´s Diamond in China´s Automobile industry

4.2.1 Factor Conditions in China

4.2.2 Demand Conditions in China

4.2.3 Related and supporting Industries

4.2.4 Firm Strategy, Structure, Rivalry

4.2.5 Chance

4.2.6 Government

4.3 Cross-Impact Matrix

4.3.1 Interpretation of results from Cross-Impact-Matrix

4.3.2 Comparison of the variables

4.3.3 Mendelow Matrix

5. Conclusion and discussion

Objectives and Research Themes

This thesis examines the economic impacts of China's "Made in China 2025" (MIC 25) industrial policy on German Original Equipment Manufacturers (OEMs) within the automotive sector, focusing specifically on the transition toward electrical vehicles.

• Analysis of China's historical and strategic industrial transformation through MIC 25.
• Evaluation of the shifting competitiveness of German OEMs in the Chinese market.
• Application of the Porter Diamond Model to assess sector-specific competitive advantages.
• Methodological qualitative review of literature to derive economic impacts, opportunities, and threats.

Excerpt from the Book

Summary of Chapters

1. Introduction: Discusses the historical background of the Chinese automobile industry, the core objectives of the MIC 25 plan, and the established position of German OEMs as global automotive leaders.

2. Theoretical Framework: Provides a historical overview of China's automotive evolution from 1950 to the present and details the specific goals and structural shifts initiated by the MIC 25 plan.

3. Methodology: Outlines the qualitative semi-systematic literature review approach used to analyze the collected data and identify variables for economic impact assessment.

4. Analysis: Applies Michael Porter's Diamond model to evaluate Chinese competitive factors and uses a cross-impact and Mendelow matrix to determine the significance of variables for German OEMs.

5. Conclusion and discussion: Synthesizes findings on the necessity for strategic adaptation among German OEMs and evaluates the competitive landscape regarding battery technology and government-influenced market dynamics.

Keywords

Made in China 2025, MIC 25, German OEMs, Electric Vehicles, NEVs, Battery Technology, Automotive Industry, Supply Chain, Porter Diamond Model, Cross-Impact Analysis, Market Share, Trade Policy

Frequently Asked Questions

What is the core focus of this research?

The work focuses on the economic impacts of China's national industrial policy, "Made in China 2025," on German automotive manufacturers (OEMs), particularly in the context of the global transition to electric vehicles.

What are the primary themes covered in this thesis?

Key themes include the rapid evolution of the Chinese automotive industry, the technical objectives of MIC 25, the competitive pressures faced by German carmakers in China, and the strategic importance of the battery supply chain.

What is the research goal?

The primary goals are to analyze the competitive advantages within the Chinese electric vehicle market and to identify the specific economic impacts, opportunities, and challenges that arise for German OEMs from the MIC 25 plan.

Which scientific methodology is employed?

The author uses a qualitative, deductive, semi-systematic literature review. Data is further analyzed using Michael E. Porter's "Diamond" framework, a Cross-Impact Matrix, and a Mendelow Matrix to determine the influence of specific variables.

What does the main body analyze?

The main body examines the historical foundation of the Chinese automotive sector, details the ten core industries of MIC 25, analyzes Chinese battery dominance, and provides an assessment of how these factors influence the market strategy of German firms.

What keywords characterize the research?

Core keywords include Made in China 2025 (MIC 25), German OEMs, New Energy Vehicles (NEVs), Battery Technology, Competitive Advantage, and Trade Dynamics.

How does the "local for local" strategy benefit BMW?

The "local for local" strategy, particularly regarding the expansion of joint ventures and localized R&D, allows BMW to better integrate into the Chinese R&D ecosystem and tailor products specifically to the tastes and digital demands of Chinese consumers.

What conclusion does the author draw regarding German battery dependency?

The author concludes that German OEMs are currently heavily dependent on Chinese-controlled battery supply chains and raw materials. To mitigate this vulnerability, German firms are advised to pursue independent research into next-generation battery technologies and foster European partnerships.

What is the significance of the Mendelow Matrix in this study?

The Mendelow Matrix is used to determine the sphere of influence for German OEMs. It identifies which economic factors are internally controllable and which are subject to external geopolitical and market risks, providing a clear suggestion for future strategic actions.