Gasgoo Munich-the Ministry of Industry and Information Technology (MIIT) released its 408th batch of announcements in June 2026, formally removing the vehicle production qualifications of eight companies—including FAW Xiali, Brilliance Auto, Zotye, Leopaard, Lifan, Hawtai, BAIC Yinxiang (HYOSOW), and Haima—from the registry and permanently freezing them. This decision marks a substantive end for these brands on both legal and industrial levels, mandating the full sealing of production lines and stripping them of any legal right to manufacture vehicles.
Image source: Zotye Auto
These companies once dominated China's early auto boom. FAW Xiali held the title of best-selling sedan for 18 consecutive years, moving 253,000 units in 2011 and becoming synonymous with the "national family car." Zotye surged to 330,000 sales in 2016 on the back of aggressive value-for-money strategies. Leopaard, with its military roots, built a reputation in the government service market with rugged off-roaders, while Lifan pivoted from motorcycles. At various points, Brilliance Auto, Hawtai, BAIC Yinxiang, and Haima also commanded significant market share.
Analysts point to a lack of core technology as the fundamental driver of this collective exit. Most brands relied on an extensive model of "rebadging and assembly" for years, with R&D spending falling critically short. For instance, Zotye, Haima, and Brilliance Auto kept annual R&D budgets in the tens of millions to just over 100 million yuan—a stark contrast to the tens of billions routinely poured in by top-tier players. This long-term technological "hollowing" left them ill-equipped for the shift toward electrification and intelligence, unable to meet new demands like China VIb emissions standards or advanced autonomous driving. Compounding the issue, some automakers diverted capital into non-core sectors like real estate and finance, further eroding their manufacturing foundations.
The MIIT had actually established an exit mechanism as early as 2012, but early 2026 saw the "30,000-kilometer reliability verification" upgraded to a mandatory entry hurdle. Combined with a market chill that saw passenger car retail sales slump 19.5% year-on-year between January and May, the survival space for these brands was crushed. The market had already turned its back: residual values for their models collapsed, used-car dealers refused to stock them, and aftersales parts supplies began drying up.
Yet, industry resources haven't gone entirely to waste. Production bases and technical teams from some of these firms have been absorbed and revitalized by players like GAC AION and Geely, reallocating capacity and talent. The departure of these brands draws a line under the "Wild West" era—an age defined by imitation, low prices, and joint-venture dividends. They stand now as historical markers on China's path toward a more advanced automotive industry.
