(Yicai Global) May 9 -- Intense competition will eliminate between 60 percent and 70 percent of car brands in China over the coming two to three years, according to the chairman of state-owned Changan Automobile.

“The competition in China's automotive industry is fierce, and its reshuffle is accelerating,” Zhu Huarong said yesterday. “In the next two to three years, even by a conservative estimate, 60 to 70 percent of brands will be eliminated.”

There are 148 brands in the Chinese auto market, the world’s largest, of which 114 are domestic and 34 are foreign. About 20 percent of have a more than 90 percent market share.

In the past three years, 75 brands have been knocked out, Zhu noted. “Only leading firms with good products, strong technologies, and large-scale and rapid transformation capabilities can survive and develop amid fierce market competition,” he said.

Last year, Chinese brands seized 80 percent of the domestic new energy vehicle market, Zhu said, noting that with the ongoing electrification process, Chinese carmakers will undermine European, US, Japanese, German, and South Korean rivals to dominate the local market. Traditional carmakers, joint ventures, startups, and information and communications technology firms will be the four major players in the Chinese market, he added.

China's car production and sales fell 4.3 percent and 6.7 percent to 6.2 million and 6.1 million units, respectively, in the first quarter from a year earlier.

Despite these worse-than-expected growth rates, Chongqing-based Changan Auto still believes that China's car industry will sell 30 million units by 2027, with the penetration rate of NEVs exceeding 50 percent in 2025 and 75 percent in 2030, Zhu said. Vehicles will be smarter, and Chinese autos will usher in opportunities for international development, he said.

Zhu expects the global penetration rate of NEVs to reach 16 percent in 2025 and exceed 33 percent in 2030. Chinese car companies can provide better products and services to the world with their industrial and technological strength, he added.

Changan Auto will launch 13 new energy products this year, forming the matrix for three NEV brands: Changan Qiyuan, Deep Blue Automobile, and Avatr, Zhu noted.

The automaker also is accelerating its layout in Europe, the United States, the Middle East and Africa, Asia Pacific, and the Commonwealth of Independent States, and plans to enter major overseas markets around 2025, with no less than 30 global products and more than 3,000 overseas outlets, Zhu said.

Changan Auto reported CNY121.2 billion (USD17.5 billion) in revenue last year, up 15.3 percent from the year before. Net profit soared 120 percent to CNY7.8 billion (USD1.1 billion).

Editor: Futura Costaglione