Automobile Companies Repeatedly Split: Where Is the End of Integration?

In today's automotive industry, a wave of transformation is surging. Especially as the gears of the automotive industry enter the fast lane of electrification and intelligence, a storm of resource restructuring is sweeping across the entire industry.

From Geely Holding Group announcing a merger agreement between Geely Auto and Zeekr Intelligent Technology, to SAIC Motor integrating five companies to form a "major passenger car sector"; from GAC Group undertaking a major reorganization of its R&D system, to NIO integrating its sub-brands into the main brand system; from Chery establishing four major business groups to build a clear brand matrix, to Great Wall Motors changing its brand logo, and Dongfeng Motor establishing Yipaike Automotive Technology Company...

Automakers' intensive integration efforts outline the survival landscape during the industry's transition period. These actions are not isolated but are strategic decisions made to adapt to new market structures and technological trends in the context of the global automotive industry's transformation.

01Automotive Industry Consolidation Trend: Strategic Choices Under Multiple Factors

The consolidation of the automotive industry has never been a coincidental event; rather, it is the inevitable result of the combined effects of market conditions, technological changes, and corporate strategies. In the industrial revolution of new energy and intelligent technology, car manufacturers face unprecedented survival pressures while also harboring strong aspirations for future development. These factors intertwine to jointly drive the wave of consolidation.

The intensification of market competition is the primary factor driving car companies towards integration. With the rapid expansion of the new energy vehicle market, traditional car companies are accelerating their transition to electrification, and new emerging car companies are continuously rising. The number of market participants is surging, and the dimensions of competition have extended from mere product comparison to multiple levels such as technology, service, and ecosystem.

In the case of the domestic market, data from the China Association of Automobile Manufacturers shows that sales of new energy vehicles in China continue to grow in 2024, but market concentration is constantly changing. Many car companies, in order to secure a position in the limited market space, have to enhance their competitiveness by integrating resources.

Against this backdrop, increasing the scale of individual models and reducing costs have become core demands for automotive companies.

For example, last year Geely released the "Taizhou Declaration," focusing on strategic concentration and integration to reduce internal resource consumption among its brands. The Geometry brand was merged into Geely Galaxy to concentrate resources in building a more competitive mainstream new energy product brand, avoiding repetitive investment and internal friction in the mid-to-low-end new energy market, and to engage in direct competition with rivals such as BYD with a stronger lineup.

SAIC Motor Corporation has integrated SAIC Passenger Vehicle Company, SAIC International, Innovation Research and Development Institute, Zero Beam Technology, and Overseas Mobility into a "Large Passenger Vehicle Segment." The core purpose of this integration is to concentrate resources to increase the scale of individual products, thereby reducing costs.

Similarly, NIO integrated the Le Dao and Firefly brands into the main brand system and revoked their independent business unit status in order to streamline the entire product-to-market chain, improve cross-departmental collaboration efficiency, and maintain a competitive edge in the fierce high-end new energy vehicle market.

The automotive industry is currently in a critical period of technological transformation characterized by electrification, intelligence, and connectivity. The development of new energy technologies requires massive capital investment. From breakthroughs in battery technology to the iteration of autonomous driving technology, the research and development of each key technology tests the financial strength and technical reserves of automakers. The accelerated iteration of technological changes forces automakers to enhance R&D efficiency through integration.

At the same time, in the era of software-defined vehicles, cars are no longer simple mechanical products but intelligent terminals integrating hardware, software, and services. This places higher demands on automakers' R&D capabilities. The continuous increase in R&D investment makes it difficult for a single department or company to undertake all the R&D tasks alone, making the integration of R&D resources and achieving collaborative innovation an inevitable choice.

SAIC Group's software company "Lingshu Technology" has completed integration with SAIC R&D Institute. The autonomous driving teams from both sides have merged offices and are collaboratively advancing R&D work. This integration breaks down research barriers and makes the chain of technological innovation smoother.

GAC Group announced a restructuring of its R&D system by splitting the GAC Research Institute into three independent research institutes: Vehicle, Platform, and Styling. These will be integrated into the Product Division of GAC Group, forming a brand-new "Large R&D System." This transformation aims to optimize the R&D process, enhance the speed of R&D response, and ensure the company remains competitive in the rapidly evolving technological environment.

The focus and upgrading of corporate strategy is an important driving force for promoting integration. Some car companies have diversified their operations and expanded their business scope during their past development processes. However, with changes in the market environment, some car companies have realized the need to return to their core business and concentrate resources to enhance the competitiveness of their automotive business.

In different stages of automotive industry development, car manufacturers continuously adjust their strategic focus. When the industry enters a critical transformation period, focusing on core business and clarifying brand positioning become strategic choices for many car companies.

Dongfeng Motor Corporation announced the establishment of Yipai Automotive Technology Company, which includes three brands: Dongfeng Yipai, Dongfeng Fengshen, and Dongfeng Nami. This company carries Dongfeng Motor's expectations for further development in the independent passenger vehicle sector. This integration also reflects the company's focus on the independent passenger car business and clarifies its strategic direction.

This strategic shift back to core business operations enables automakers to focus more on the research and development, production, and sales of automotive products, thereby improving product quality and service standards, and creating differentiated competitive advantages in the fierce market competition.

02The Deep Impact of Integration: Reshaping the Competitive Landscape

The series of integration actions by car manufacturers is not merely a simple organizational adjustment or brand merger, but will have a profound impact on the ecosystem and competitive landscape of the automotive industry. This impact is reflected in multiple dimensions such as brand positioning, resource allocation, and technological innovation.

The clarification of the brand matrix is a direct result of integration. Before integration, some automakers had unclear brand positioning or even overlapping brands, leading to scattered resources and difficulty in forming synergy. Through integration, automakers can streamline their brand system, clarify the market positioning of each brand, and achieve differentiated competition.

After Chery established the four major business units of Chery, Fengyun, Tiggo, and QQ, the Exeed brand continues to target the high-end market. The Tiggo division focuses on the classic product lines of the Arrizo and Tiggo series, the Fengyun division specializes in the new energy brand Fengyun, and the QQ division concentrates on the small car market. At the same time, Chery focuses on "Value," Jetour interprets "Wild," Exeed defines "Luxury," and iCAR leads "Trend." Each brand has a clear positioning, forming a complementary brand matrix.

Geely Galaxy has officially been upgraded to the Geely Galaxy brand, further clarifying its position within the Geely Group. Yizhen Automobile has been merged into Geely Galaxy to become the high-end MPV series, and the Geometry brand has been integrated as the GEOME series, making the product lineup of the Galaxy brand more complete and clearly positioned.

Great Wall Motors has released a new brand logo, "GWM." The rear badges of the new Ora Good Cat GT and Haval Big Dog have been replaced with the "GWM" logo. This move strengthens the unity of the group's brand to some extent, and also lays a foundation for clearly defining the positioning of its sub-brands within a unified group brand framework.

In the future, the brand landscape of the automotive market will be characterized by both concentration and differentiation. On one hand, large automotive groups will reduce the number of brands under their umbrellas through consolidation, but the influence and market share of these brands will further increase, leading to the emergence of a few highly competitive brand groups.

On the other hand, within these brand groups, each brand will place greater emphasis on differentiated positioning to meet the needs of different consumer groups. After the establishment of Zeekr Technology Group, Zeekr mainly targets the market for vehicles priced at 300,000 yuan and above; Lynk & Co is positioned as a "global high-end new energy brand," focusing on the market for vehicles priced at 200,000 yuan and above. Through differentiated positioning, the dual brands achieve synergistic development, enhancing the group's overall competitiveness in the high-end automotive market.

Certainly, integration helps automobile companies optimize market resource allocation, and the optimization of resource allocation is the core value of integration. The automotive industry is capital-intensive and technology-intensive, and the rational allocation of resources is directly related to the competitiveness of enterprises. Through integration, automobile companies can consolidate dispersed resources such as research and development, production, and sales, achieving sharing and collaboration, thereby improving resource utilization efficiency.

The integration of Lingbund Technology and SAIC R&D Headquarters has enabled the intelligent driving team to collaborate, avoiding the duplication of R&D resources and accelerating the R&D process. The construction of GAC Group's "large R&D system" reorganizes and integrates R&D resources, making the R&D processes of complete vehicles, platforms, and design more coordinated, allowing for a rapid response to changes in market demand and improving the input-output ratio of R&D resources.

The acceleration of technological innovation is an important outcome of integration. In the competition of intelligence and electrification, the speed of technological innovation determines a company’s market position. After integration, automakers can concentrate more human, material, and financial resources on core technology research and development. At the same time, collaboration across departments and companies promotes the integration and breakthrough of technologies.

NIO has established a horizontal "vehicle product line" organization, integrating key segments such as product design and development, industrialization, user experience, and service. This full-chain integration helps to rapidly transform technological innovation into product competitiveness and improves the efficiency of technology implementation.

It can be said that the intensification of industry competition is an inevitable result of integration. As the integration among automobile manufacturers deepens, industry concentration will continue to increase. Automakers with resource and technological advantages will occupy more favorable positions in the competition, and industry competition will upgrade from single-product competition to comprehensive strength competition across the entire industrial chain.

SAIC, GAC, Geely, NIO, Chery, Great Wall, Dongfeng, and other automakers are continuously enhancing their strengths through integration. The competition among them will become more intense, while also putting greater pressure on other car companies, driving the entire industry to continuously improve its competitiveness. This escalation in competition will prompt automakers to constantly innovate in technology and upgrade their services. Ultimately, the biggest beneficiaries will be consumers, who will enjoy higher-quality, smarter, and more diverse automotive products and services.

From the current consolidation actions of car manufacturers, splitting and integration are merely means, not the end. This wave of consolidation is ongoing and will reshape the automotive industry's ecological landscape, driving the industry toward greater efficiency, innovation, and quality.

For automobile enterprises, whether they can accurately identify their own positioning during integration and achieve effective resource coordination will determine their place in the future landscape of the automotive industry. As for the entire industry, this integration may well be a necessary step towards a new stage of development, injecting fresh vitality into the sustained prosperity of the automotive sector.