Trade Competitiveness Index declined slightly for the past three years,and as the domestic market demand was slowing down,it is more urgent to enhance industrial competitiveness of China's auto industry. There were five main problems challenging China's auto industry competitiveness upgrading. Firstly,the Chinese automotive industry located at the low end of the global value chain. Secondly,Chinese own brand faced serious challenges. Thirdly,independent research and development and innovation capability needs to be improved. Fourthly,automotive industry policy characterized by joint-venture and restriction of competition is not conducive to the enhancement of the competitiveness. Fifthly,there are more challenges of the barriers to trade in major export markets. So China neads to take the follwing measures to deal with the above challenge to do. Firstly,the market competition environment should be improved actively. Secondly,more attention should be paid to enhance R & D and innovation of the auto companies. Finally,more affords should be taken to promote the development of information technology in automotive industry. <<