China’s automobile industry has succeeded remarkably since the 1980s. The Chinese government welcomed foreign automobile companies to form joint ventures. The local automobile companies began to enter the market in the late 1990s. To compete with the foreign rivals, they needed to acquire advanced technologies. Meanwhile, technology transfer through foreign direct investment (FDI) inflows was not so successful. Some of the local automobile producers developed their technologies through FDI outflows. The large local automobile producers have paid much attention to their own research and development (R&D) activities. China has tried hard to build its human capital. Acquiring intellectual property rights from foreign manufacturers has been another way for the local producers to acquire advanced technologies. They have also tried to establish partnerships with the local technology groups. The ways in which the local automobile companies acquired advanced technologies may provide meaningful policy implications for the other technology-intensive industries and developing countries trying to develop the automobile industry.