Using data of listed companies in chinese automobile industry from 2000 to 2011, we found that centrality has an inverted U shaped relationship with firm’s exploratory innovation and exploitative innovation. Continuously increasing the centrality will restrain exploratory innovation first, then restrain exploitative innovation. Knowledge distance is negatively related to exploitative innovation, but its effect on exploratory innovation takes the form of an U shaped. The interaction effect of centrality and knowledge distance has a significant negative effect on exploitative innovation.