SWOT analysis on producing and selling “green cars” to China

Reference source:
http://english.people.com.cn/90001/90778/90860/6962327.html
Diagram source:
http://money.163.com
In April, Beijing Auto Expo opened with the theme of “Imagining the Green Future”, and sent a signal of potential trend of car manufacturing in Chinese market. Here are the strengths, weaknesses, opportunities and threats that green auto manufacturers should consider before entering Chinese market.

Strengths:
The labour and raw materials costs are low. If manufacturing plants and selling places are both in China, considerable transportation cost can be saved.
Expanding to a new market can increase businesses’ risk-bearing ability.

Weaknesses:
Companies outside China have limited information and knowledge about the industry.
Marketing and R&D costs can be high; and most of them will be irrecoverable sunk costs.

Opportunities:
China is the world’s largest auto market. People’s demand for cars is predicted to have a sustained and fast growth as their income (affordability) increases every year.
Chinese government provides financial incentives to encourage new-energy car manufacturers.
Chinese Oil price is high so cars with less oil consumption are desirable.
Chinese green car market is not saturated.

Threats:
Future uncertainty in Chinese government policies and fluctuation of exchange rate may exist.
Future cost of labour and price of raw materials may rise because of inflation.