IDEAS home Printed from https://ideas.repec.org/a/eee/jomega/v103y2021ics0305048320307453.html
   My bibliography  Save this article

Production coopetition strategies for an FV automaker and a competitive NEV automaker under the dual-credit policy

Author

Listed:
  • Cheng, Yongwei
  • Fan, Tijun

Abstract

This paper investigates the strategic choices in production between competition and coopetition for a fuel vehicle (FV) automaker and a rival new energy vehicle (NEV) automaker under the dual-credit policy. A benchmark competition model and three coopetition models are formulated: a Cournot competition production strategy, a unified production strategy, an FV priority production strategy, and an NEV priority production strategy. Based on these four production strategies, this study examines the optimal strategies for both parties in a stable credit market and with credit trading risk. The unified production strategy is always the most profitable strategy in a stable credit market, although it is also the most difficult strategy for the coexistence of FVs and NEVs in the vehicle market. However, cooperation in credit trading rather than competition in production has proven to be the optimal strategy in any scenario for coping with risk in an unstable credit market. Moreover, for the dual-credit policy, maintaining a relatively high credit price is often more conducive to promoting the expansion of NEVs than setting a high production ratio of NEVs. This study also examines the impact of the credit coefficient, credit equilibrium and NEV substitutability on both parties’ production decisions and profits. Our study provides important managerial implications that can be utilized as strategic guidance for FV/NEV automakers to pursue coopetition under the dual-credit policy.

Suggested Citation

  • Cheng, Yongwei & Fan, Tijun, 2021. "Production coopetition strategies for an FV automaker and a competitive NEV automaker under the dual-credit policy," Omega, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:jomega:v:103:y:2021:i:c:s0305048320307453
    DOI: 10.1016/j.omega.2020.102391
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305048320307453
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.omega.2020.102391?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zhang, Jie & Kevin Chiang, Wei–yu & Liang, Liang, 2014. "Strategic pricing with reference effects in a competitive supply chain," Omega, Elsevier, vol. 44(C), pages 126-135.
    2. Feng, Zhen-Hua & Zou, Le-Le & Wei, Yi-Ming, 2011. "Carbon price volatility: Evidence from EU ETS," Applied Energy, Elsevier, vol. 88(3), pages 590-598, March.
    3. Konur, Dinçer & Geunes, Joseph, 2016. "Supplier wholesale pricing for a retail chain: Implications of centralized vs. decentralized retailing and procurement under quantity competition," Omega, Elsevier, vol. 65(C), pages 98-110.
    4. Li, Yaoming & Zhang, Qi & Liu, Boyu & McLellan, Benjamin & Gao, Yuan & Tang, Yanyan, 2018. "Substitution effect of New-Energy Vehicle Credit Program and Corporate Average Fuel Consumption Regulation for Green-car Subsidy," Energy, Elsevier, vol. 152(C), pages 223-236.
    5. Liu, Huihui & Lei, Ming & Deng, Honghui & Keong Leong, G. & Huang, Tao, 2016. "A dual channel, quality-based price competition model for the WEEE recycling market with government subsidy," Omega, Elsevier, vol. 59(PB), pages 290-302.
    6. Xu, Guangye & Dan, Bin & Zhang, Xumei & Liu, Can, 2014. "Coordinating a dual-channel supply chain with risk-averse under a two-way revenue sharing contract," International Journal of Production Economics, Elsevier, vol. 147(PA), pages 171-179.
    7. R. Venkatesh & Pradeep Chintagunta & Vijay Mahajan, 2006. "Research Note--Sole Entrant, Co-optor, or Component Supplier: Optimal End-Product Strategies for Manufacturers of Proprietary Component Brands," Management Science, INFORMS, vol. 52(4), pages 613-622, April.
    8. Chen, Pingping & Zhao, Ruiqing & Yan, Yingchen & Li, Xiang, 2020. "Promotional pricing and online business model choice in the presence of retail competition," Omega, Elsevier, vol. 94(C).
    9. Luo, Zheng & Chen, Xu & Wang, Xiaojun, 2016. "The role of co-opetition in low carbon manufacturing," European Journal of Operational Research, Elsevier, vol. 253(2), pages 392-403.
    10. Zhu, Lijing & Wang, Peize & Zhang, Qi, 2019. "Indirect network effects in China’s electric vehicle diffusion under phasing out subsidies," Applied Energy, Elsevier, vol. 251(C), pages 1-1.
    11. Ou, Shiqi & Lin, Zhenhong & Qi, Liang & Li, Jie & He, Xin & Przesmitzki, Steven, 2018. "The dual-credit policy: Quantifying the policy impact on plug-in electric vehicle sales and industry profits in China," Energy Policy, Elsevier, vol. 121(C), pages 597-610.
    12. Wallace J. Hopp & Xiaowei Xu, 2008. "A Static Approximation for Dynamic Demand Substitution with Applications in a Competitive Market," Operations Research, INFORMS, vol. 56(3), pages 630-645, June.
    13. Xu, Li & Deng, Shi-Jie & Thomas, Valerie M., 2016. "Carbon emission permit price volatility reduction through financial options," Energy Economics, Elsevier, vol. 53(C), pages 248-260.
    14. Hubert Pun, 2015. "The more the better? Optimal degree of supply-chain cooperation between competitors," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 66(12), pages 2092-2101, December.
    15. Chen, Jing & Zhang, Hui & Sun, Ying, 2012. "Implementing coordination contracts in a manufacturer Stackelberg dual-channel supply chain," Omega, Elsevier, vol. 40(5), pages 571-583.
    16. Modak, Nikunja Mohan & Kelle, Peter, 2019. "Managing a dual-channel supply chain under price and delivery-time dependent stochastic demand," European Journal of Operational Research, Elsevier, vol. 272(1), pages 147-161.
    17. Xu Chen & Xiaojun Wang & Yusen Xia, 2019. "Production Coopetition Strategies for Competing Manufacturers that Produce Partially Substitutable Products," Production and Operations Management, Production and Operations Management Society, vol. 28(6), pages 1446-1464, June.
    18. Pieter A. VanderWerf & John F. Mahon, 1997. "Meta-Analysis of the Impact of Research Methods on Findings of First-Mover Advantage," Management Science, INFORMS, vol. 43(11), pages 1510-1519, November.
    19. Li, Jizi & Ku, Yaoyao & Yu, Yue & Liu, Chunling & Zhou, Yuping, 2020. "Optimizing production of new energy vehicles with across-chain cooperation under China’s dual credit policy," Energy, Elsevier, vol. 194(C).
    20. Gnyawali, Devi R. & Park, Byung-Jin (Robert), 2011. "Co-opetition between giants: Collaboration with competitors for technological innovation," Research Policy, Elsevier, vol. 40(5), pages 650-663, June.
    21. Yin, Pengzhen & Chu, Junfei & Wu, Jie & Ding, Jingjing & Yang, Min & Wang, Yuhong, 2020. "A DEA-based two-stage network approach for hotel performance analysis: An internal cooperation perspective," Omega, Elsevier, vol. 93(C).
    22. Xin He & Shiqi Ou & Yu Gan & Zifeng Lu & Steven Victor Przesmitzki & Jessey Lee Bouchard & Lang Sui & Amer Ahmad Amer & Zhenhong Lin & Rujie Yu & Yan Zhou & Michael Wang, 2020. "Greenhouse gas consequences of the China dual credit policy," Nature Communications, Nature, vol. 11(1), pages 1-10, December.
    23. Amy David & Elodie Adida, 2015. "Competition and Coordination in a Two-Channel Supply Chain," Production and Operations Management, Production and Operations Management Society, vol. 24(8), pages 1358-1370, August.
    24. Wei-yu Kevin Chiang & Dilip Chhajed & James D. Hess, 2003. "Direct Marketing, Indirect Profits: A Strategic Analysis of Dual-Channel Supply-Chain Design," Management Science, INFORMS, vol. 49(1), pages 1-20, January.
    25. Ma, Shao-Chao & Fan, Ying & Feng, Lianyong, 2017. "An evaluation of government incentives for new energy vehicles in China focusing on vehicle purchasing restrictions," Energy Policy, Elsevier, vol. 110(C), pages 609-618.
    26. Yan, Yingchen & Zhao, Ruiqing & Lan, Yanfei, 2019. "Moving sequence preference in coopetition outsourcing supply chain: Consensus or conflict," International Journal of Production Economics, Elsevier, vol. 208(C), pages 221-240.
    27. Gaur, Jighyasu & Amini, Mehdi & Rao, A.K., 2017. "Closed-loop supply chain configuration for new and reconditioned products: An integrated optimization model," Omega, Elsevier, vol. 66(PB), pages 212-223.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Meng, Weidong & Ma, Miaomiao & Li, Yuyu & Huang, Bo, 2022. "New energy vehicle R&D strategy with supplier capital constraints under China's dual credit policy," Energy Policy, Elsevier, vol. 168(C).
    2. Yang, Huixiao & Ou, Jinwen & Chen, Xiaofeng, 2021. "Impact of tariffs and production cost on a multinational firm's incentive for backshoring under competition," Omega, Elsevier, vol. 105(C).
    3. Yushi Wang & Licheng Sun & Shilong Li, 2022. "Production Decisions of Automakers Considering the Impact of Anticipated Regret under the Dual-Credit Policy," Sustainability, MDPI, vol. 14(11), pages 1-18, May.
    4. Liu, Yajie & Dong, Feng, 2022. "What are the roles of consumers, automobile production enterprises, and the government in the process of banning gasoline vehicles? Evidence from a tripartite evolutionary game model," Energy, Elsevier, vol. 238(PC).
    5. Li, Chao & Yi, Yongxi & Zhang, Aoxiang & Chen, Biao, 2023. "Fuel consumption-reduction investment decisions and coordination contracts in fuel vehicle supply chains: A dynamic analysis," Energy Economics, Elsevier, vol. 125(C).
    6. Yangyang Wang & Yongxi Yi & Chunyan Fu & Yuqiong Li, 2023. "Price competition and joint energy‐consumption reduction technology investment of new energy and fuel vehicles under the double‐points policy," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(4), pages 2278-2291, June.
    7. Feng Liu & Yingshuang Tan & Sudipto Sarkar & Xueqing Zhang & Xingjun Huang, 2023. "When to invest in electric vehicles under dual credit policy: A real options approach," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(4), pages 2186-2198, June.
    8. Ma, Miaomiao & Meng, Weidong & Li, Yuyu & Huang, Bo, 2023. "Impact of dual credit policy on new energy vehicles technology innovation with information asymmetry," Applied Energy, Elsevier, vol. 332(C).
    9. Lian Ding & Xiaodong Zhu, 2023. "The Impact of the Dual-Credit Policy on Production and Cooperative R&D in the Automotive Supply Chain," Sustainability, MDPI, vol. 15(2), pages 1-18, January.
    10. Liangui Peng & Ying Li & Hui Yu, 2021. "Effects of Dual Credit Policy and Consumer Preferences on Production Decisions in Automobile Supply Chain," Sustainability, MDPI, vol. 13(11), pages 1-19, May.
    11. Wang, Yuyan & Zhang, Xiaozhen & Cheng, T.C.E. & Wu, Tsung-Hsien, 2023. "Choice of the co-opetition model for a new energy vehicle supply chain under government subsidies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).
    12. Ma, Miaomiao & Meng, Weidong & Huang, Bo & Li, Yuyu, 2023. "The influence of dual credit policy on new energy vehicle technology innovation under demand forecast information asymmetry," Energy, Elsevier, vol. 271(C).
    13. Yuanyuan Xu & Xiuyan Ma & Gengui Zhou, 2022. "Coordination of Automobile Supply Chain Considering Relative Endurance Level under the Dual-Credit Policy," Sustainability, MDPI, vol. 14(21), pages 1-20, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nie, Qingyun & Zhang, Lihui & Li, Songrui, 2022. "How can personal carbon trading be applied in electric vehicle subsidies? A Stackelberg game method in private vehicles," Applied Energy, Elsevier, vol. 313(C).
    2. Liu Liu & Ying Yuan & Xiaoya Wang & Hongfu Huang, 2022. "Strategic Licensing of Green Technologies to a Brown Rival: A Game Theoretical Analysis," Mathematics, MDPI, vol. 10(23), pages 1-21, November.
    3. Sun, Libo & Jiao, Xiaoting & Guo, Xiaolong & Yu, Yugang, 2022. "Pricing policies in dual distribution channels: The reference effect of official prices," European Journal of Operational Research, Elsevier, vol. 296(1), pages 146-157.
    4. Zhao, Dan & Ji, Shou-feng & Wang, He-ping & Jiang, Li-wen, 2021. "How do government subsidies promote new energy vehicle diffusion in the complex network context? A three-stage evolutionary game model," Energy, Elsevier, vol. 230(C).
    5. Ziyue Wang & Juan Zhang & Huiju Zhao, 2020. "The Selection of Green Technology Innovations under Dual-Credit Policy," Sustainability, MDPI, vol. 12(16), pages 1-22, August.
    6. Raza, Syed Asif & Govindaluri, Srikrishna Madhumohan, 2019. "Pricing strategies in a dual-channel green supply chain with cannibalization and risk aversion," Operations Research Perspectives, Elsevier, vol. 6(C).
    7. Feng, Lipan & Govindan, Kannan & Li, Chunfa, 2017. "Strategic planning: Design and coordination for dual-recycling channel reverse supply chain considering consumer behavior," European Journal of Operational Research, Elsevier, vol. 260(2), pages 601-612.
    8. Tahirov, Nail & Glock, Christoph H., 2022. "Manufacturer encroachment and channel conflicts: A systematic review of the literature," European Journal of Operational Research, Elsevier, vol. 302(2), pages 403-426.
    9. Jizi Li & Yuping Zhou & Dengke Yu & Chunling Liu, 2020. "Consumers’ Purchase Intention of New Energy Vehicles: Do Product-Life-Cycle Policy Portfolios Matter?," Sustainability, MDPI, vol. 12(5), pages 1-23, February.
    10. Sun, Shuzhen & Liu, Tieming, 2023. "Pricing and sales-effort coordination facing free riding behaviors between a brick-and-mortar retailer and a platform store owned by the manufacturer," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).
    11. Zhang, Guangming & Dai, Gengxin & Sun, Hao & Zhang, Guitao & Yang, Zhilin, 2020. "Equilibrium in supply chain network with competition and service level between channels considering consumers' channel preferences," Journal of Retailing and Consumer Services, Elsevier, vol. 57(C).
    12. Matsui, Kenji, 2020. "Optimal bargaining timing of a wholesale price for a manufacturer with a retailer in a dual-channel supply chain," European Journal of Operational Research, Elsevier, vol. 287(1), pages 225-236.
    13. Bo Wang & Ning Wang, 2022. "Decision Models for a Dual-Recycling Channel Reverse Supply Chain with Consumer Strategic Behavior," Sustainability, MDPI, vol. 14(17), pages 1-18, August.
    14. Haitao Chen & Zhaohui Dong & Gendao Li, 2020. "Government Reward-Penalty Mechanism in Dual-Channel Closed-Loop Supply Chain," Sustainability, MDPI, vol. 12(20), pages 1-15, October.
    15. Cao, Kaiying & Xu, Yuqiu & Hua, Ye & Choi, Tsan-Ming, 2023. "Supplier or co-optor: Optimal channel and logistics selection problems on retail platforms," European Journal of Operational Research, Elsevier, vol. 311(3), pages 971-988.
    16. Yan, Yingchen & Zhao, Ruiqing & Xing, Tiantian, 2019. "Strategic introduction of the marketplace channel under dual upstream disadvantages in sales efficiency and demand information," European Journal of Operational Research, Elsevier, vol. 273(3), pages 968-982.
    17. Duan, Housheng & Deng, Sijing & Song, Haiqing & Xu, Jiayan, 2021. "The impacts of sales efforts and mode of payment on the competition between agent and retailer," Omega, Elsevier, vol. 103(C).
    18. Li, Jingjing & Nian, Victor & Jiao, Jianling, 2022. "Diffusion and benefits evaluation of electric vehicles under policy interventions based on a multiagent system dynamics model," Applied Energy, Elsevier, vol. 309(C).
    19. Xue, Musen & Zhang, Jianxiong & Zhu, Guowei, 2020. "Quantity decision timing with spillover effect and asymmetric demand information," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 142(C).
    20. Mu, Xiuqing & Kang, Kai & Zhang, Jing, 2022. "Dual-channel supply chain coordination considering credit sales competition," Applied Mathematics and Computation, Elsevier, vol. 434(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jomega:v:103:y:2021:i:c:s0305048320307453. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/375/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.