This research analysis automobile industry of China and Germany, based on theory of the competitive advantage of nations. Currently China is the largest market of automobile production and sales of the world. The huge domestic market demand is sufficient to reflect the rapid growth of the automobile industry for the Chinese automotive industry, while Germany automobile industry has long been acknowledged by the average consumer due to its technology and quality assurance. Global warming and energy consumption has led to global environmental awareness, which influence the cooperation model of China and Germany on automobile industry. In this thesis the cooperation model will be analyzed, the conclusion of analyze could be as the positive advice for the development of Taiwan automobile industry in the future.