Plan to cut nearly half of the models; Zhu Huarong says 3 million vehicles are only enough to survive.
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Author | Zhou Zhiyu
In the first quarter of 2026, China's passenger car market faced significant challenges, but nearly every mainstream automaker has raised its annual targets. Everyone is fighting for the same thing: before the market landscape is set, getting their scale above the safety line.
Where is the safety line? There are various opinions in the industry. Zhu Huarong, Chairman of Changan Automobile, gave his answer: at Changan Automobile's global strategy conference on April 21, 2026, he stated bluntly that 3 to 3.5 million vehicles is just enough to survive; 8 to 10 million is to live well.
From this perspective, Chinese car companies still have a long way to go before they can "live well."
Zhu Huarong’s response is not to launch more models to grab market share, but to do the opposite: cut the product line from 63 models to 36, reducing nearly half, focus on big volume models, and target 5 million sales by 2030. Changan set a series of goals, summed up as the "1445" global strategy, with the aim of laying out a clear roadmap to avoid strategic ambiguity.
In July last year, Changan became the third central state-owned automaker; nine months later, this new central SOE unveiled its first comprehensive group strategy. The questions this strategy has to answer are those facing the whole industry — merely selling cars is not enough to support a world top ten company.
The Exam Paper for a New Central SOE
From the NEV Shangri-La, Intelligent Beidou Tianshu, to Global Haina Baichuan, Changan has launched three major plans on its transformation journey, with various achievements along the way.
Having become a central SOE, Zhu Huarong must now provide new answers — both to explain the new SOE’s direction to the SASAC, and to the market on what comes next after proposing the "3311" strategy at the end of 2024.
On April 21, Changan released the “1445” strategy: one vision, four main businesses, four transformations, five “doublings.” Zhu Huarong also offered a “two-step in ten years” timeline: by 2030, entering the world’s top ten automakers; by 2035, consolidating that position with large improvements in profitability and efficiency.
He also gave clear market goals: the global auto market is expected to reach 100 million vehicles by 2030, the entry threshold for the top 10 automakers will continue to rise; if you don't move fast, you'll fall behind.
Yet in the face of this vast market, Changan wants a different approach. According to Wallstreetcn, Changan plans to gradually cut its product line from 63 models to 36, and to create one global blockbuster with annual sales of 500,000 units, plus five models at the 300,000-level. The six core models are to contribute 2 million sales, with the rest 30 models sharing the remaining 2 to 3 million.
The problem is, Changan is still some distance from this goal. Zhu Huarong’s solution is to define “blockbuster” as “global blockbuster” — one model selling 500,000 units worldwide. This links the blockbuster logic and globalization logic together. The Haina Baichuan plan has also upgraded from 1.0 to 2.0, shifting from product-trade-focused to manufacturing, service, and investment integration.
Overseas capacity will be expanded from 350,000 to 800,000 units, with overseas sales targets of 1.5 million and up to 1.8 million. As of this March, Changan’s exports accounted for 35.5%, exceeding 100,000 units exported in a single month for the first time.
On the brand level, consolidation is underway. Zhu Huarong revealed at the strategy launch that Avatr and Deepal will advance full strategic coordination to build a mid-to-high-end brand group targeting 1.5 million units, with Avatr aiming for 500,000 and Deepal for 1 million, and over 40% overseas share. With independent operations up front and coordinated middle- and back-ends, brand independence is maintained.
The essence of slimming the product line is to further enhance economies of scale, avoiding internal competition between brands in the same price range.
On the energy roadmap, Zhu Huarong expects the shares of BEV, XEV, and ICE to be "4:4:2." He says, only making ICE gets you a market of 30 million, only NEV also gets 30 million; only with multi-energy can you access the full 60 million. This explains why Changan launched its Blue Whale hybrid focused on 2L urban fuel consumption on March 30, while also setting an NEV sales target above 2.4 million — striving for 3.6 million.
Cutting models, choosing markets, merging brands, and covering multi-energy are all directed at the same thing: the core of the “1445” strategy is to focus even more, while growing scale. But whether this focus will break through depends on whether six models can each sell more than 300,000 globally in the future.
Searching for New Growth Engines
According to the National Bureau of Statistics, profit margin in China's auto industry was 4.1% in 2025, the lowest in history. In the first two months of 2026, it hit a new low.
A car company executive told Wallstreetcn that in the current market, if companies rely only on selling cars domestically for profit, the business model can hardly close the loop — car companies need to find a breakthrough.
Zhu Huarong also acknowledged it is difficult for an auto company to achieve high-quality growth just by making and selling cars—the model that’s persisted for over a century. The industry must break through boundaries, cross into other sectors, and work with technology partners in and outside the industry to co-build an open, win-win, sustainable collaborative ecosystem.
Thus, Changan proposes to achieve 600 billion in revenue by 2030: one business with 500 billion, two at 100 billion, and several at the 10-billion level.
The two 100-billion-level businesses are services and components, which will become important revenue and profit sources going forward.
Some have already begun to experiment. In 2025, XPeng’s service and other revenues reached 8.34 billion yuan, 11% of total, with the VW tech cooperation at a 68.2% margin, more than five times that of vehicles. Other automakers are also accelerating growth in components and other business, seeking more growth beyond vehicle sales.
Changan’s approach is to make whole vehicles the traffic entry. Software and services income should reach 10%, aftermarket income 22 billion, and open the components platform to outside for 100 billion, etc.
Moreover, Zhu Huarong repeatedly emphasized that intelligence investment in the SDA platform can be leveraged at low cost for all mobile products. Robots will be mass produced in 2028; flying cars delivered in 2028; unmanned logistics vehicles will reach commercial closed loop in 2027. His positioning for intelligence also serves this: “Intelligence is only for three things: safety, safety, and safety.” Not competing on functional speed, but building the moat on safety and reliability, thereby providing a foundation for platform versatility.
Changan is not the only automaker telling this story. Seres mentions smart robots in its annual reports; XPeng is working on low-altitude economy and humanoid robots; Li Auto is expanding into embodied intelligence. But SOEs act differently from private enterprises: private companies can “burn money and pivot,” but SOEs must account for returns to the SASAC on every investment. Resource allocation in the new industrial ecosystem is thus a practical question.
Zhu Huarong’s bid is 100 billion in R&D over five years. On the organization side, simultaneously achieving instant information flows, halving resource investment, and making three-step decisions. In 2027, strive to reach carbon peak. For a SOE producing nearly 3 million vehicles annually, this is organizational reinvention in two to three years.
Shifting from selling cars to selling services, technology platforms, and ecosystem is a story told by more than just Changan. But among Chinese car companies telling this story, Changan may be the first to write it down as a central SOE and group strategy. At this stage of the elimination race, whoever remains at the table is determined by more than just how many cars they sold.
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