The paper discusses how to use real option approach for the different risk condition policy-maker entry model when competitive firms join market. It also discusses how to avoid project investment risk. Numerical examples from the automobile markets at both Mainland China and U.S.A are used to illustrate this approach. The purpose of this research aims at enhancing the capacity of reaction by the management under the environment with uncertainty. It reveals the most suitable policy-making threshold value for automobile companies when entering the auto market. The main contents of this research include: