This thesis investigates the main drives behind the growth of the Chinese automotiveindustry and the factors that slows this process down. The development of theautomotive industry has been defined by the Chinese central government as one ofthe pillars for the progress of the Chinese economy, because of its importance inreaching the goal of connecting the rich industrial east with the poor, agriculturaloriented, west region by means of transportation and opportunities. The thesis startsby describing the issue from a macro point of view. It then goes to the very microlevel of the discussion.