Gasgoo Munich- There is one question the industry debates endlessly: amid fierce price wars and heavy investment in smart technologies, just how many domestic automakers will ultimately survive?
Cui Dongshu, secretary-general of the China Passenger Car Association (CPCA), sees it differently. He argues that judging the industry's long-term endgame requires looking beyond the number of nameplates on the road. The real measure, he insists, is whether a company possesses a complete in-house R&D system, scalable production capacity, and global supply chain capabilities.
In his view, electrification and smart technologies have fundamentally rewritten the industry's logic. China auto sector is heading for a clear divergence: small and medium-sized independent automakers lacking full industrial chain support will continue to be washed out. Conversely, large groups armed with core technologies will keep consolidating resources. By deploying a layered, multi-brand strategy to cover every consumer segment, they will eventually establish a stable structure where oligopolistic groups control core capacity while a diverse array of niche brands thrive in parallel.
Going It Alone Is a Losing Battle
The current market is hyper-competitive. Heavy spending is required across the board—batteries, motors, smart driving, vehicle platforms, and overseas compliance. Small automakers going it alone simply cannot sustain such massive R&D costs year after year. Add in the constant squeeze on profits from normalized price wars, and the survival space for these players only narrows. This is the core driver of the current industry shakeout.
Cui draws a clear line for market elimination: the ones exiting are independent automakers with no in-house R&D, no scalable factories, and no complete upstream and downstream supply chains. Niche brands incubated by large groups, however, are not on the chopping block. After a decade of industrial upgrading, China's leading domestic automakers have long moved past crude, single-brand expansion. They have transformed into comprehensive industrial groups spanning R&D, production, supply chains, and talent development.
These companies have built unified, shared middle platforms where vehicle architecture, battery management, smart cockpits, global sourcing, and production lines are all internally connected. On the back end, they jointly amortize high R&D and manufacturing costs. On the front end, they use differentiated brands to segment the market, rooting out internal homogenization and price wars. This widely recognized model is the hallmark of efficient group operations.
Leading domestic groups generally adopt a layered structure with clear, non-conflicting divisions for each brand. The main brand secures the mass-market volume—vehicles priced around 100,000 yuan—to maintain stable cash flow from production and sales. High-end series challenge the pricing tiers of joint ventures to lift the group's overall premium. Specialized brands, such as those for off-roading or micro-mobility, tap into niche demands. Meanwhile, high-end new energy brands roll out cutting-edge technologies to set industry benchmarks.
Cui argues that this layered structure dilutes investment across the entire chain to the maximum extent. Niche brands do not have to shoulder heavy asset burdens alone; they need only focus on refining products for their specific demographics and managing user operations. Even with annual sales of just 100,000 units, they can maintain healthy profitability—far exceeding the risk resilience of standalone niche players. Conversely, independent brands without a group safety net are vulnerable. If the market fluctuates or R&D funding dries up, they can easily slide into sustained losses and be forced out of the game.
Centralized Group Operations, Symbiotic Niche Brands
When analyzing the domestic landscape, Cui cites a century of global automotive history as evidence. He believes that "group consolidation, brand prosperity" is not a path unique to China, but a universal development law distilled by global automakers through multiple rounds of M&A.
In Europe, the U.S., Japan, and South Korea, the number of independent automakers has plummeted after multiple rounds of restructuring. The top groups that remain have all built multi-brand matrices, relying on differentiated products to cover different price points, regions, and usage scenarios.
Volkswagen, Toyota, and Stellantis—the three global leaders—share a remarkably consistent operational logic: the group builds a unified common technology base, while brands operate independently and compete in staggered segments.
Volkswagen shares its MEB and PPE electric platforms across the group: Volkswagen targets the mass market, Audi focuses on the premium segment, Škoda cultivates the value market, and Porsche concentrates on luxury performance. Each lane operates without cannibalizing the others' customers.
Toyota leverages unified hybrid and electric technologies to split into the Toyota main brand, the Lexus premium line, and the Daihatsu micro-mobility brand, creating a complementary ecosystem across high and low markets.
Stellantis relies on its "FASTLANE 2030" strategy to integrate the assets of two major automakers. It retains over a dozen brand IPs, including Peugeot, Jeep, and Maserati, building localized models for Europe, the Americas, and Southeast Asia to balance scale advantages with regional demands.
Drawing on numerous overseas cases, Cui summarizes an industry rule: in every round of consolidation, the ones that disappear are independent automakers lacking full industrial support. Brand IPs with unique niche value, however, are mostly acquired and sustained by larger groups. This rule fits the current domestic market perfectly.
In the medium to long term, the number of leading groups possessing full in-house R&D and global export capabilities will continue to shrink. Yet, each surviving group will constantly enrich its brand portfolio, simultaneously deploying across home, off-road, premium, and international tracks.
The core battle in the industry today is no longer about short-term sales for a single brand, but comprehensive strength across the entire industrial chain. Mergers and acquisitions will continue, but the only casualties will be scattered, unstructured small and medium-sized automakers. Diversified niche brands will rely on large groups for long-term development.
Ultimately, a handful of oligopolistic groups controlling batteries, motors, electronics, vehicle platforms, and global supply chains will command the industry's core resources. Their multi-brand portfolios will cultivate various niche segments, forming a mature landscape led by giants yet flourishing with diversity.
