Optimal entry structure in emerging automotive markets: The role of spillover effects and alliance cooperation

In the wave of intelligent transformation in the global automotive industry, the explosive growth of emerging markets such as new energy vehicles and the accelerated commercialization of autonomous driving technologies have given rise to complementary supply chain collaborations between technology platforms (e.g., Huawei, NVIDIA, Baidu Apollo) and automakers (e.g., Toyota, Chery, JAC). However, the competition for pricing power within collaborations, spillover effects in emerging markets, and shifting consumer preferences have created complex strategic trade-offs between independent/dependent entry and alliance entry. In this context, this study develops a game-theoretic model to analyze how in-house establishment costs, consumer preferences, and spillover effects in emerging markets collectively shape the equilibrium entry strategies between a technology platform and an automaker. Our analysis reveals the specific influence mechanisms through which spillover effects drive strategic reversals and affect alliance effectiveness. It finds that, without spillover effects, the low cost drives the dual-independent entry structure, while the rising cost triggers asymmetric entry structures. When the spillover effect exceeds a critical threshold, the high cost instead prompts the platform to enter independently, leading to a strategic reversal. In addition, the efficacy of alliance entry hinges on the ratio between the profit-sharing proportion and the consumer preference for alliance products. When the ratio resides within an intermediate range and the spillover effect is high, alliance entry emerges as an equilibrium. The deviation from this condition renders alliance entry viable only under a moderate spillover effect. This research clarifies how spillover dynamics reshape competitive strategies and defines boundaries for effective collaboration in technology-driven automotive supply chains. It provides actionable insights for navigating coopetition in emerging mobility markets.