From May 15th to 17th, the 18th Xuanyuan Automotive Bluebook Forum was held in Guangzhou under the theme "Turning Point." Discussing the industry reshuffle, He Xiaopeng, Chairman and CEO of XPeng Inc., stated in a dialogue that the number of Chinese automotive brands will significantly decrease, with only about five domestic brands likely to achieve substantial sales volume in the end, while the vast majority of existing brands will be eliminated.
He Xiaopeng reflected on his initial assessment when transitioning from the internet industry into the automotive sector. He mentioned that initially, there were 110 automotive brands and 300 new vehicle manufacturers in China, totaling approximately 410. By 2021, the number of Chinese brands with meaningful sales volume had dropped to fewer than 40. Currently, only 17 Chinese brands (excluding foreign ones) remain.
He predicts that the number of Chinese brands with significant sales volume will eventually stabilize at around five, with a few additional foreign brands. "However, in my view, the vast majority of brands operating in the Chinese market, including foreign ones, will be eliminated." Globally, there might be two or three more brands. He believes the number of automotive brands will certainly be higher than in the mobile phone industry, "but it will be much, much fewer than it is now."
Amidst this competitive landscape, He Xiaopeng is confident that XPeng Inc. will secure a place. He stated that the company's strategic focus always revolves around one question: "What enables you to be among the final five? Where does your technological differentiation come from? How do you generate sufficient revenue to support such strong technology? This is a process where technology, business, brand, and other flywheels form a closed loop and drive each other in reverse."
He Xiaopeng emphasized that he often does not focus on short-term results because short-term gains can often lead to greater long-term pain. "If you sell certain vehicles very well today, what does that mean? It means your brand, your network effects, and your ability to achieve high quality tomorrow will be squeezed. So ultimately, it's a balanced combination, and it's really difficult. But if the automotive business is done well, by that time you will feel that your dimension is higher than your competitors, and you will also have more confidence."
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