Production Channel Strategies of an Automotive Supply Chain Under Government Intervention

Li Shen (), Luhong Chang () and Xiaohui Yu ()
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Li Shen: Beijing Wuzi University
Luhong Chang: Beijing Wuzi University
Xiaohui Yu: Beijing Wuzi University

A chapter in LISS 2022, 2023, pp 513-541 from Springer

Abstract: Abstract International auto supply chain can be influenced by various policies, among which the tariff and dual-credit policies (DCP) play key roles. In order to explore the production channel in four cases under the two policies, a game-theoretical model consisting of a two-echelon auto supply chain and the government is proposed. The government pursues social welfare maximization, while the automakers and dealers are profit-driven. In the four cases, the optimal tariffs and pricing decisions are calculated. Threshold policies to ensure profitability for automakers and dealers are also introduced. Finally, the influence of different channel structures on the optimal solutions and the optimal channel strategy are obtained with numerical analysis. The results show that the optimal tariff with only new energy vehicles (NEV) production at home (case E) is always smaller than that with NEV and fuel vehicle (FV) production abroad (case T). Only when the production cost gap between NEV and FV exceeds a certain threshold, will the optimal tariff with only FV production at home (case F) be the smallest. Furthermore, there exists a certain threshold of credit ratio to influence the trend of profits and social welfare respectively. The market environment with higher environmental awareness can decrease the negative effect of DCP. The numerical analysis further indicates that the social-welfare-maximizing government does not impose tariffs that exceed the optimal tariff, and the government can receive sub-optimal social welfare when case E reaches equilibrium.

Keywords: Tariffs; Dual-credit policy; Social welfare; Game theory; Supply chain management (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lnopch:978-981-99-2625-1_40

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DOI: 10.1007/978-981-99-2625-1_40

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