Introduction

Private automakers underpin half of China's automotive industry.

On the morning of February 17th, a high-level forum on private entrepreneurs held in Beijing created a buzz both within and outside the industry. Participants were eager to identify which entrepreneurs attended and how they would positively impact the capital market and various sectors.

Last night's Xinwen Lianbo (Xinhua News Broadcast) dedicated 8 minutes to reporting this news, dispelling doubts about the participating enterprise representatives. The high-level transmission of the conference's spirit and instructions to private enterprises pointed out a clear direction for China's economic development and the path forward for private enterprises.

In fact, the last forum of such high standards was held in 2018. It has been 6 years and 3 months since the central government specifically convened a forum for private enterprises again, highlighting the forum's significance and far-reaching impact.

On one hand, China's economy faces challenging issues that need addressing, and private enterprises must abandon the mindset of "lying flat" and "running away." On the other hand, the driving and promoting role of private enterprises in the economy cannot be overlooked. Returning to the glory of "56789" (contributing 50% of tax revenue, 60% of GDP, 70% of innovation, 80% of employment, and 90% of the number of enterprises) is the country's earnest expectation.

If the 2018 forum focused on "bailouts," the 2025 keyword has shifted to "technological breakthrough." The leaders who participated in the forum are the core representatives of new productive forces. High-level leaders emphasized that "private enterprises should implement new development concepts and deeply participate in the construction of a modern industrial system," aiming to address "choking points" in China's economic core technologies.

This forum is also a landmark event for the automotive industry. Judging from the front-row representatives, whether it's Ren Zhengfei from Huawei, Wang Chuanfu from BYD, Lei Jun from Xiaomi, or Zeng Yuqun from CATL, these four leaders are directly related to the automotive industry.

Huawei is deeply involved in the transformation of smart cars, reshaping the automotive industry chain in the new era. The high-end automotive development potential brought by the "AITO" series of brands has given Chinese brands their own BBA (Benz, BMW, Audi).

BYD is the champion of Chinese automakers and the core driver of new energy products, leading Chinese automobiles to overtake in the new energy racetrack and the global automotive industry.

Although Xiaomi's core business is electronic consumer products, Xiaomi Automobile has emerged as a leader in consumption upgrading trends with its strong appeal and breakthrough in the high-end automotive field. It is expected to become China's version of Tesla.

CATL is the global king of power batteries and the definer of global power battery standards. It has also deeply promoted and driven the revolution of China's new energy vehicles. The power battery safety standards it leads in formulating have been incorporated into the global technical regulations by the United Nations Economic Commission for Europe.

These four companies and leaders undoubtedly represent the trends and future directions of the entire automotive industry. This also demonstrates that the automotive industry, as the first pillar of the national economy (in 2024, the revenue of the automotive industry was 10.65 trillion yuan, surpassing that of the real estate industry), has received strong attention from the country and high-level leaders.

As key players in the automotive industry, private automakers, with their market-oriented genes and rapid decision-making mechanisms, continue to break traditional monopolies, activate industrial vitality, achieve overtaking in the field of new energy vehicles, and consolidate China's leading position in automotive technology and the global automotive industry, becoming reshapers of the automotive market landscape.

The latest data shows that as representatives of private enterprises, BYD and Geely are currently the champions and runners-up among domestic automakers, with even more pronounced leading edges. Considering the sales volume of all private automakers, in 2024, over a dozen (less than one-third of all automakers) private passenger vehicle enterprises contributed sales of over 10 million vehicles (accounting for more than one-third), becoming the backbone of China's automotive industry.

This is even more evident in terms of profits. In the first half of 2024, the total net profit of the three private automakers BYD, Geely, and Great Wall reached 31.31 billion yuan, far exceeding the combined total of the top three state-owned automakers SAIC, Changan, and GAC (10.976 billion yuan). The profit gap between the two was 2.85 times. This competitive pressure forces state-owned automakers to accelerate reforms and push the entire industry to shift from a "win-win model" reliant on joint venture brands to "hardcore competition" driven by independent innovation.

In terms of technological innovation, private automakers are also the main force, especially regarding the first-mover advantage in the current automotive electrification and intelligence race. Private automakers have broken through technological bottlenecks, built discourse power in the industrial chain, and become leaders in technological innovation.

BYD controls the three-electric technology through a vertical integration model, with a global market share of power batteries reaching 37%, posing a direct challenge to Japanese and Korean companies. The CMA architecture jointly developed by Geely and Volvo reduces platform-based R&D costs by 30% and shortens the product iteration cycle to 18 months. The derived SPA, SEA, and GEA architectures have become the confidence behind Geely's continuous upward trend. New force automakers define cars with software. Leading industry experiences such as smart cockpits and intelligent driving brought by NIO, XPeng, Li Auto, Huawei, and Xiaomi provide new directions for the transformation and upgrading of the automotive industry.

The core of the automotive industry lies in the ecosystem and supply chain. In the past, the top 100 global auto parts companies were primarily controlled by foreign capital, and the rise of Chinese automobiles relied on the industrial chain advantages of developed countries in Europe and America. Now, the rise of private automakers and auto parts enterprises has reconstructed the value distribution pattern of the automotive industry.

For example, in the vertical pulling field of the battery industry, CATL's global market share of power batteries exceeds 35%. The competition between it and BYD has promoted an average annual increase in lithium battery energy density by 8%. Both have become the core force behind China's new energy vehicle power batteries, guiding and nurturing the development and growth of China's automotive power batteries, and becoming the core driving force for the transformation of new energy vehicles.

In terms of horizontal integration of the industrial chain, the Huawei model empowers automakers in their intelligent transformation, driving the average annual growth rate of supporting industries such as automotive chips and high-precision maps to exceed 25%, and promoting the growth and rise of numerous related parts and supporting enterprises. This is even more true in job creation. As the largest sector of the manufacturing industry, each vehicle position drives seven related positions. Private automakers contribute 80% of new jobs in the automotive industry, contributing to social development and the improvement of people's living standards.

Of course, in terms of China's automobiles going global and establishing international influence, private automakers are also game-changers rewriting international competition rules and globalization. Private automakers leading Chinese automobiles globally are breaking the stereotype of "Made in China = low-end OEM." For example, BYD's overseas factory layout covers Southeast Asia and Europe, with an average single-vehicle price exceeding USD 30,000, an increase of 150% compared to 2018. Geely has invested in Mercedes-Benz, acquired Proton and Lotus, and reversely exported the SEA architecture, engine technology, and vehicle platforms, setting a precedent for technology licensing by Chinese automakers and becoming a typical representative of technology export.

In the field of economic transformation, private automakers are the engine driving economic transformation and holding high the banner of new productive forces. In terms of investment driving, BYD's average annual R&D investment exceeds 5% of revenue. The rise of private new force automakers such as NIO and Li Auto has driven the formation of related new energy vehicle industrial clusters.

In terms of consumption, in the past, Chinese brands were primarily concentrated in the low-price range, and high-value products were monopolized by foreign luxury brands. Now, with the transformation of new energy, high-priced and high-value products launched by private automakers, such as Li Auto L9, AITO M9, and Zeekr 009, have not only broken the price barrier established by foreign automakers but also activated new momentum for consumption upgrading.

The manufacturing industry is a solid foundation for technological innovation. It not only promotes breakthroughs in new technologies and processes through high-intensity research and development but also provides rich application scenarios to accelerate the transformation of scientific and technological achievements into real productive forces. The automotive industry is the core driver of the manufacturing industry, and private automakers are the leaders of the automotive industry. Their contributions to China's economic development and the growth of national strength are self-evident.

As the official commentary stated, the rise of private automakers is not only a successful business case but also a vivid manifestation of the institutional advantages of the socialist market economy. They prove that in the field of strategic emerging industries, the synergistic effort of market-oriented competition mechanisms and national industrial policies can quickly cultivate industrial clusters with global competitiveness. In the future, as smart electric vehicles evolve into "mobile intelligent terminals," private automakers may lead China to seize the commanding heights of the fourth industrial revolution.

Of course, discussing the advantages of private automotive enterprises here does not negate the value and significance of central enterprises and state-owned enterprises. On one hand, central enterprises and state-owned enterprises are still an important part of the automotive industry, occupying half of the industry. At the same time, central enterprises and state-owned enterprises are the cornerstone of the development of China's automotive industry. Without the joint venture experience of central enterprises and state-owned enterprises over the past 20 years, which has brought about the cultivation of the industrial chain and talent training, there would not be the current situation of Chinese automobiles standing on their own. This contribution cannot be forgotten.

On the other hand, with the changes of the times, central enterprises and state-owned enterprises are also undergoing reforms and adjustments. The integration of Dongfeng and Changan leaves room for imagination for the further development of central enterprises in the future. After the mixed-ownership reform, central enterprises and state-owned enterprises will also exhibit strong vitality. Chery, which ranks among the top three in domestic sales and first in exports, is a typical representative.

The continuous perseverance and long-term efforts of central enterprises, state-owned enterprises, and private enterprises in the manufacturing industry are the confidence of China's economy.

After this conference, some said that the hardcore entrepreneurial spirit will never go out of style, but it needs to match the way of the times. When the warm current of policy meets hardcore innovation, and when institutional commitments hedge against uncertainties and risks, the seeds planted in this spring will undoubtedly bear fruit in autumn. The answer may be hidden in the eyes of every entrepreneur who reignites hope.