Author | Zhou Zhiyu
In the first quarter of 2026, the Chinese passenger car market faces significant challenges, yet nearly every mainstream automaker is increasing its annual targets. Everyone is racing for the same thing: before the market structure solidifies, scale must be pushed above the safety line.
Where exactly is this safety line? There are various opinions within the industry. Zhu Huarong, Chairman of CHANGAN AUTOMOBILE, offered his answer. At CHANGAN AUTOMOBILE's global strategy launch event held on April 21, 2026, he stated bluntly that sales of 3 million to 3.5 million units are only enough to survive, while 8 million to 10 million units are needed to thrive.
From this perspective, Chinese automakers still have a long way to go to achieve &#34;thriving.&#34;
Zhu Huarong's response was not to launch more models to fight for market share, but rather to do the opposite: reduce the product lineup from 63 models to 36, cutting nearly half of the product lines. The focus is on flagship products, with a target of reaching 5 million unit sales by 2030. CHANGAN AUTOMOBILE has set a series of goals, summarized as the &#34;1445&#34; Global Strategy, aiming to clarify the path and avoid vague strategies.
In July last year, Changan became the third central state-owned automotive enterprise. Nine months later, this new central enterprise released its first complete group-level strategy. The question this strategy aims to answer is one facing the entire industry: selling cars alone is insufficient to build a top-ten global company.
<h2>The Exam Paper for the New Central Enterprise</h2>
From the New Energy Shangri-La initiative, to the Intelligentization Beidou Tianshu project, to the Globalization Hai Na Bai Chuan program, CHANGAN AUTOMOBILE has previously launched three major plans on its transformation journey. Each line has made progress with notable results.
After becoming a central automotive enterprise, Zhu Huarong needed to submit a new report at this juncture: explaining the direction of the new central enterprise to SASAC and outlining the next steps for the market following the &#34;3311&#34; strategic goals proposed at the end of 2024.
On April 21, CHANGAN AUTOMOBILE released the &#34;1445&#34; strategy—a vision, four business sectors, four transformations, and five doublings—as this report. Zhu Huarong simultaneously provided a &#34;Ten-Year Two-Step&#34; timeline: entering the top ten global automotive enterprises by 2030, and consolidating that position by 2035 with significantly improved efficiency and profitability.
He also set clear market targets: the global automotive market is expected to reach 100 million units by 2030. With the entry threshold for the top ten automakers continuously rising, failing to accelerate means falling behind.
However, facing this vast market, CHANGAN AUTOMOBILE hopes to adopt a different approach. Wall Street News learned that Changan plans to gradually reduce its product lineup from 63 models to 36, cutting nearly half, while proposing to create one global flagship model with annual sales of 500,000 units and five global flagship models with annual sales of 300,000 units each. Six core models are to contribute 2 million units, while the remaining 30 models will share the other 2 to 3 million units.
The problem is that Changan is currently some distance from this goal. Zhu Huarong's solution is to define &#34;flagship models&#34; as &#34;global flagship models,&#34; meaning a single vehicle selling 500,000 units globally. This binds the logic of flagship models with the logic of globalization. The Hai Na Bai Chuan plan has also been upgraded from 1.0 to 2.0, with the core change being a shift from product-trade-led to an integrated model of manufacturing, services, and investment.
Overseas production capacity is to expand from 350,000 units to 800,000 units, with overseas sales targets of 1.5 million units and a challenge goal of 1.8 million units. In March this year, Changan's overseas proportion reached 35.5%, with monthly exports breaking 100,000 units for the first time.
Brand consolidation is also underway. Zhu Huarong revealed at the strategy launch event that Avatr and Deepal will be advanced towards comprehensive strategic synergy, creating a mid-to-high-end brand cluster with a total volume of 1.5 million units. Specifically, Avatr targets 500,000 units and Deepal 1 million units, with overseas proportions exceeding 40%. Through independent front-end operations and collaborative back-end support, brand independence will be maintained.
The essence of slimming down the product line is to further enhance economies of scale and avoid mutual cannibalization among multiple brands in the same price segment.
Regarding energy routes, Zhu Huarong forecasts the ratio of BEV, XEV, and ICE to be &#34;4:4:2.&#34; He stated that focusing solely on fuel vehicles limits the market to 30 million units, while focusing solely on new energy vehicles also caps it at 30 million; only a multi-energy layout can capture the full 60 million units. This explains why Changan just released the Blue Whale Super Engine hybrid system on March 30, targeting a city driving era with fuel consumption under 2 liters, while simultaneously setting a new energy sales target of over 2.4 million units, with a challenge goal of 3.6 million units.
Cutting models, selecting markets, merging brands, and covering multiple energies all point to the same objective: the core methodology of the &#34;1445&#34; strategy is to become more focused while growing scale. However, whether this focus can penetrate the market depends entirely on whether six global flagship models with annual sales exceeding 300,000 units can be achieved in the future.
<h2>Seeking New Growth Poles</h2>
Data from the National Bureau of Statistics shows that China's automotive industry profit margin was 4.1% in 2025, the lowest level in history. In the first two months of 2026, this figure hit a new low.
An automotive executive told Wall Street News that under the current competitive market environment, if an automaker relies solely on selling cars domestically to generate profits, the business logic is difficult to close. Automakers must find breakthrough points.
Zhu Huarong also admitted that automotive enterprises cannot achieve high-quality development through the century-old model of merely building and selling cars. The automotive industry must break boundaries, cross into other industries, and partner with technology partners both inside and outside the industry to co-build an open, win-win, sustainable cooperation ecosystem.
Consequently, CHANGAN AUTOMOBILE has proposed achieving a target of 600 billion yuan by 2030. This involves creating one 500-billion-yuan sector, two 100-billion-yuan sectors, and several 10-billion-yuan sectors.
The two 100-billion-yuan sectors refer to the service industry and the parts industry, which will become CHANGAN AUTOMOBILE's important future sources of revenue and profit.
Industry pioneers have already laid the groundwork. XPeng reported service and other income of 8.34 billion yuan in 2025, accounting for 11% of total revenue. Among them, the technical cooperation with Volkswagen had a profit margin of 68.2%, more than five times that of whole vehicles. Other automakers are also accelerating growth in auto parts and other businesses, seeking more growth beyond whole vehicle sales.
Changan's path is to turn whole vehicles into traffic entry points. Software and service revenue is targeted to account for 10%, after-market revenue to reach 22 billion yuan, and the parts platform to open up to 100 billion yuan externally.
Additionally, Zhu Huarong repeatedly mentioned that intelligent investments in the SDA platform can be reused at low cost across all mobile bodies. Robots are scheduled for mass production in 2028, flying cars for delivery in 2028, and unmanned logistics vehicles for commercial closure in 2027. The tone he set for intelligence serves this logic: &#34;Intelligence does only three things: safety, safety, and still more safety.&#34; Rather than competing on speed in features, the barrier is built on safety and reliability, providing the foundation for the generalization of the SDA platform.
Changan is not the only automaker telling these stories. Seres' annual reports frequently mention intelligent robots, XPeng is developing low-altitude economy and humanoid robots, and Li Auto is expanding into embodied intelligence. However, how a central enterprise approaches this differs from private enterprises. Private enterprises can burn cash to test errors and pivot quickly, whereas every investment by a central enterprise must justify returns to SASAC. In the new industrial ecosystem, resource allocation remains a practical issue.
Zhu Huarong's offer is 100 billion yuan in R&amp;D investment over five years. On the organizational front, information systems are being implemented in one step, resource inputs are cut in half, and decisions are completed in three steps. The goal is to achieve carbon peak by 2027. For a central enterprise with near 3 million units of annual production, this represents a round of organizational reconstruction to be completed within two to three years.
From selling cars to selling services, technology platforms, and ecosystems, this is not just a story told by Changan. However, among all Chinese automakers telling this story, Changan may be the first to document it in the form of a group strategy as a central enterprise. As the elimination phase reaches this stage, what determines who stays at the table is no longer just how many cars are sold.

000625

200625

Focusing efforts like a clenched fist

Wallstreetcn

CHANGAN AUTOMOBILE

阿维塔科技(重庆)股份有限公司

XPENG-W

XPeng

Volkswagen

Volkswagen AG Pref

SERES

LI AUTO-W

Li Auto

Volkswagen AG

Plans to Cut Nearly Half of Models: Zhu Huarong Says 3 Million Units Are Only Enough to Survive