Our research topic is about studying the scope of an automotive retailer to expand intoChinabut in the light of Corporate Governance. In order to understand coporate governance in China it isessential to understand that the country has moved from a planned economy to a market-oriented one. The corporate governance inChinacan easily be termed as a ‘Control-based model.’ InChinathe controlling shareholders have a tight grip on all listed companies so for an automotive retailer entering intoChinato exercise cost benefits must consider the strict corporate governance in the country. But the controlling shareholders often take actions at the expense of minority shareholders just to benefit themselves. Yet Around 4.3 million vehicles have been sold inChinain 2006. They have replacedJapanas being one of the largest markets for automotives. Therefore, there is scope but corporate governance inChinais such that might hinder the growth of minority shareholders (Ning, Xiangdong, Xianming Zhou, 2005).
This research will focus on a company called ‘Inchcape’ which based inUKand has plans to expand intoChina. InUKthe corporate governance is not a hindrance which is unlikeChinasince the revised corporate governance code in UK is more dynamic and aimed towards working as a backbone for all businesses and pushes them to grow. But theUKcorporate governance code implies serious competitive pressures on companies which makes survival for many organizations a difficult task to achieve and especially on the automotive retailer side. Since the focus of this study is automotive retailindustry the focus of the comparison of the codes shall revolve primarily around thisindustry.
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