Since 2001, the Chinese auto industry has been growing so rapidly that China has developed into the world's largest auto manufacturer and become the world's 2nd largest auto market in 2010. The Chinese auto industry has great growth potential, but recently the speed of growth makes the environmental damage and energy shortage problems more and more serious. So every country including China has began to pay close attention to eco-friendly vehicles. Especially, hybrid electric vehicles(HEV) which occupies the governments attention these days.
The Chinese HEV auto industry in many government support policies which is helps it to develop rapidly. But the HEV auto technical specifications what compared with developed countries' levels still show certain disparities. Recently, many of China's foreign owned auto makers have displayed some new HEV cars in the ShangHai auto show. Especially, some of the Korean auto makers displayed HEV cars that are very attractive to people. In the near future these HEV cars will appear in China auto market. Korean auto exports will be further improved that way. Korean auto makers need to know about the Chinese HEV market demands and Chinese auto makers also need to acquire advanced technologies regarding the HEV auto industry.
Under these circumstances, Korea and China can have a good opportunity for collaboration in the HEV auto industry. Already Korean auto companies have invested in China and Chinese auto companies have also invested in Korea.
The purpose of this study with the full cooperation of Korea and China is to search for a mutually beneficial solution by utilizing the comparative advantages of the two countries' HEV auto industries. Furthermore, this study suggests several strategies to minimize the adverse environmental of the growth of China in the auto industry. The study also suggests government's roles and firm's strategies to enhance cooperation between the two countries in the HEV auto industry. Major recommendations include strengthening communication channels, exchanging human capital, pursuing a Free Trade Agreement, and enhancing R&D cooperation and division of labor.