The thesis is based on the Technical Innovation Science, the Institutional Innovation Science, the Industrial Economics, the Development Economics as well as other managerial theories. It combines standard research with empirical analysis, qualitative analysis with quantitative analysis. It comprehensively applies comparative analysis, systematical research and other methods. Theoretically, it studies industrial innovation theory system as well as its operational mechanism, which provides a theoretical support for Chinese automobile industry's innovation and development. Practically, it makes a profound qualitative, quantitative and comparative analysis on the present situation and developing trend of both Chinese and the world automobile industry. It puts forward developing innovating objects, direction, tactics and measures for Chinese automobile industry.The research outspreads in the following ways:1. Practical and theoretical significance of the research. At present, the automobile industry is one of Chinese established pillar industries. Though it has already had certain foundation, faced with domestic and foreign environmental changes, it has become a practical and urgent problem to achieve survival and development through innovation. In theories, innovation research stays in the level of the enterprise or the nation, while is relatively weak in the level of the industry. Regarding the innovation and development of Chinese automobile industry, there come forth some research achievements such as Chinese Automobile Innovation Engineering, Chinese Automobile Industry Innovation System and the like, which are somewhat limited and unilateral.2. Basic innovative theories as well as summary of relevant research at home and abroad. Basic theories concerning innovation provide this thesis with a platform. Learning and further study of technical innovation theories, institutional innovation theories and innovation system theories are helpful to establish and perfect, study and apply the theoretical system of industrial innovation.3. Establishment and discussion of theories about industrial innovation and industrial innovation system. Industrial innovation involves technical, organizational and managerial innovation of industries, with the corporate cluster and the government as the main body. It is based on industrial technical innovation and is characteristic of integrity, fundamentality, systematism andintegration. Innovation in different aspects altogether helps upgrade industrial competitiveness. The industrial innovation system is an economic system composed of three sub-systems - industrial technical innovation, industrial organizational innovation and industrial managerial innovation. According to the industrial innovation system model set up in this thesis, the industrial innovation system is subject to affections of national resources, governmental policies, market situation, international economic and technical environment, corporate behaviors, operational conditions of sub-systems and other factors. There are energy exchange and feedback mechanism between sub-systems, between the industrial innovation system and outside environment. The industrial innovation is not completely a sub-system of the national innovation system. They are overlapping to some degree. Corporate innovation system is a sub-system of the industrial innovation system.4. Research on Chinese automobile industry's developing history and international competitiveness. Chinese automobile has experienced three phases -foundation, growth and total development. Generally speaking, its international competitiveness is weak. Through large amounts of data, this thesis comparatively analyzes its produce and sale scale, product type, export capacity and conditions of main enterprises.5. Research on Chinese automobile industry's technical innovation. Theoretically, from the angle of the industry, it probes into three strategic patterns of industrial technical