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AsianFin -- In the past month, major Chinese automakers including FAW-Volkswagen, NIO, Geely, and BYD have embarked on sweeping organizational reforms, signaling a new phase of industry consolidation aimed at boosting competitiveness in a rapidly evolving electric vehicle (EV) market.
FAW-Volkswagen has taken the lead with the most extensive internal overhaul, integrating multiple departments such as marketing, customer service, and user operations. This follows its earlier reorganization of the ID. Operations Center, which reassigned product and sales functions back to their respective departments. The reforms are designed to strengthen the company's core capabilities in user service and product marketing — critical drivers for survival in the competitive automotive landscape.
Beyond FAW-Volkswagen, Geely announced plans to privatize and delist its premium EV brand Zeekr from the New York Stock Exchange. NIO reversed course on its Onvo sub-brand, folding it back into the main company just six months after launch. Industry giants SAIC and GAC have also restructured their R&D and operational teams, while BYD consolidated PR teams of its Denza and Fangchengbao brands under centralized group management.
This wave of integration reflects a shift from fragmented brand expansion to focused resource consolidation. Analysts say the moves are less about trimming bureaucracy and more a strategic preparation for the intensifying market competition expected in 2026.
The key theme this year is integration. SAIC Motor has merged its component subsidiaries under Huayu Automotive into a new intelligent chassis company, aiming to complete the process by June. GAC Group similarly restructured its R&D system into three independent institutes focused on vehicles, platforms, and design — all centralized under the group's product division.
NIO's deep integration of sub-brands Onvo and Firefly into its main operations, along with Geely's Zeekr privatization, highlight the broader industry trend toward consolidation. BYD has elevated the PR functions of its sub-brands to group-level management to unify messaging and efficiency.
This marks a clear departure from the "multi-brand" strategies popular in recent years, which often resulted in overlapping product lines and diluted resources.
The push for consolidation comes amid significant financial pressures following multiple rounds of price wars that have eroded profitability.
SAIC Motor's 2024 sales dropped 20% year-on-year to 4.01 million vehicles, with net profit plummeting 88% to 1.67 billion yuan. GAC Group faced similar declines, with sales down 20% and net profit falling over 80%.
In contrast, Geely and BYD posted strong sales growth, driven mainly by lower-priced models under 200,000 yuan. However, both face challenges expanding into the high-end EV market — a key battleground in the coming years.
"Automakers are realizing the multi-brand approach fragments their focus and resources," said Cui Dongshu, Secretary-General of the China Passenger Car Association. "They're now prioritizing financial health and profitability, scaling back to core brands for a more sustainable future."
With new energy vehicle penetration in China hovering around 51% after a brief dip, competition is expected to intensify. Hundreds of new EV models have launched in recent months, setting the stage for a high-stakes market battle in 2026.
Automakers are racing to streamline operations, reduce costs, and sharpen brand focus to survive and thrive.
But the transition carries risks. Large-scale restructuring involves personnel shifts, cultural integration, and realignment of business processes — all of which can disrupt productivity and innovation if not carefully managed.
Consumer concerns are also rising. Many worry consolidation will reduce after-sales service convenience and quality, or slow the pace of new product launches.
"I'm worried service centers might close or merge, meaning longer trips and wait times for repairs," said one EV owner. "I hope the unique brand experiences I value won't disappear."
For automakers, reform is a high-stakes gamble — a chance to build a leaner, more competitive future or risk alienating customers and weakening their market position.
As the Chinese auto industry gears up for the next phase of the EV revolution, the companies best able to balance consolidation with innovation will have the upper hand in the battles ahead.
(Note: USD 1 equals about 7.25 yuan)
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