In the past five years, China’s automotive industry has burgeoned in such a short period, driven by the wave of electrification, intelligent transformation, and supply chain localization.

In 2026, China’s automotive industry will enter the new development stage of the 15th Five-Year Plan. Under the current megatrend of accelerated integration of AI and the automotive industry, what new trends will emerge in the development of the automotive industry in the next five years? Which innovative solutions will be born?

To answer these core questions in the industry, Lan-You Technology held the 2025 AI+ Auto Digital Intelligence Innovation & Sharing Annual Conference and Automotive Industry 15th Five-Year Plan Digital Intelligence Development Summit themed “Creating AI Momentum, Sharing Digital Intelligence Transformation” recently. At the conference, business leaders and authoritative experts from the industry gathered to conduct in-depth discussions on the digital intelligence upgrading of the full value chain of AI+ auto “R&D, production, supply, sales, service, and management”, showing the way for the high-quality development of the automotive industry during the 15th Five-Year Plan period.

“Three 3:7 Ratios”:  The Automotive Industry is on the Verge of Restructuring

As we review the development of China’s automotive industry during the 14th Five-Year Plan period, intelligent electrification and domestic brands that stood out strongly ran through the whole period as the dual main lines of industry transformation.

In 2020, the domestic NEV market was still in its infancy, with less than 1.5 million NEVs produced and sold throughout the year, with a penetration rate of 5% only. However, in 2024, the overall production and sales volume exceeded 10 million quickly, and the penetration rate also exceeded 40%, which further climbed to 44.3% in the first half of this year, showing strong growth momentum.

Remarkable achievements have also been made in the field of intelligence. According to analysis data from the Gasgoo Automotive Research Institute, the installation volume of L2 and above ADASs in domestic new vehicles reached 10.982 million in 2024, with a penetration rate of 47.9%, in which the penetration rate of L2 and above ADASs in NEVs was 56.9%. During the same period, the overall penetration rate of intelligent cockpits in the domestic passenger vehicle market exceeded 70%, and the penetration rate in the new energy passenger vehicle market was close to 90%.

The core driving force behind this transformation is undoubtedly domestic brands. In 2024, the market share of Chinese brands in the domestic passenger vehicle market reached 65.2%, while it was less than 40% in 2020. In particular, in the emerging field of intelligent EVs, domestic brands have established a significant leading position through their first mover advantages and technological innovation.

What will the development curve of China’s automotive industry be like in the next five years?

In this regard, Xu Changming, former Deputy Director of the State Information Center, pointed out at the summit that China’s automotive industry will continue to be transformed and upgraded around the “Three 3:7 Ratios” strategy: the ratio of ICE vehicles to EVs of 3:7, the ratio of joint venture brands to domestic brands of 3:7, and the ratio of overseas sales to domestic sales of 3:7.

Currently, these three major structural changes have shown a clear evolutionary path in the domestic automotive market.

Image courtesy: Gasgoo

According to analysis data from the Gasgoo Automotive Research Institute, in the first half of this year, 10.95 million new vehicles were sold in the domestic passenger vehicle market, including 5.44 million NEVs, and 5.51 million ICE and hybrid vehicles, where the proportions of ICE vehicles and EVs were 50.3% and 49.7%, respectively.

In terms of the brand competition landscape, domestic brands dominated the market with a sales volume share of over 68% in the first half year. Specifically, BYD continued to be far ahead with a sales volume of 1.97 million vehicles, demonstrating its dual competitive advantages in the field of NEVs and the mass consumer market. In addition, Chery, Geely, Changan and other automakers also performed well, showing an overall trend of “one superpower and multiple powers”.

In this context, Xu believed that in the next few years, with the continuous enhancement of competitive advantages of EVs, the acceleration of intelligent transformation, and the continuous expansion of the “post-95” consumer group of intelligent EVs, the penetration rate of NEVs will continue to rise inevitably. Thanks to the rapid development of EVs, the overall market share of domestic brands will continue to increase.

However, this does not mean that there is no opportunity for foreign investors.

Xu believed that in the rapidly developing EV market, mainstream luxury models and first-tier joint venture brands still have opportunities. Recently, the Dongfeng Nissan N7 has seen a rising sales volume, and over 10,000 vehicles were delivered successfully in a month, which is the most direct evidence. In the long run, foreign brands are expected to occupy a share of 60% in the ICE vehicle market and a share of 20% in the NEV market, totaling about 32%.

While domestic brands continue to become increasingly competitive in the domestic market, their overseas influence is also growing rapidly.

In the first half of this year, the cumulative export volume of domestic passenger vehicles was 2.581 million, accounting for about 19% of the total sales volume of passenger vehicles. In contrast, in mature overseas automotive markets such as Germany, Japan, and South Korea, overseas new models account for over 80% in terms of sales volume, and this proportion is even over 40% in the U.S.

This means that in order for China to further transition from a major automotive manufacturing country to an automotive power, it has to further increase its sales volume shares and influence in overseas markets.

It is worth mentioning that currently, proprietary automakers represented by Chery, BYD, Geely, Changan, Great Wall, etc. are implementing their globalization strategies at a faster pace, and deepening their overseas market presence through measures such as R&D going global, production capacity going global, and channel network expansion, thereby providing solid support for Chinese automotive brands to strive for an overseas sales volume share of 30%.

Lan-You AI Factory Creates a New Engine for Auto Digital Intelligence Upgrading

It is undoubted that China’s automotive industry is accelerating its entry into higher levels of intelligent, electric, high-end and global transformation.

This transformation not only reshapes the competitive landscape of China’s automotive market and even the global automotive market, but also poses unprecedented challenges to full-chain operation capabilities of OEMs. In particular, in face of core demands such as lead time shortening, production efficiency improvement, international supply chain building, and marketing system transformation, the industry urgently needs more disruptive solutions.

For now, AI is restructuring the transformation and upgrading paradigm of the automotive industry deeply from product definition to R&D, from production and manufacturing to sales and aftersales, and from the tool level to the value creation level with its data-driven intelligent decision-making capabilities.

It is precisely because of this trend that Lan-You Technology proposed the innovative Lan-You AI Factory concept at this event in order to build a full-value-chain AI application scenario library for the automotive industry around the automotive industry chain beginning with application scenarios, and help the automotive industry break bottlenecks of AI application innovation alongside open and cooperative technology ecosystems and businesses, as well as an organization for in-depth technology integration.

Image courtesy: Lan-You Technology

According to Hu Yongli, General Manager of Lan-You Technology, Lan-You AI Factory focused on single-point innovation at the beginning, and will gradually connect points into lines in the future to reengineer core business processes in fields such as R&D, manufacturing and marketing, and then further penetrate and cover the full value chain of “research, production, supply, marketing, service and management” from lines to planes, thereby helping the automotive industry achieve business transformation through AI.

For example, in the manufacturing stage, vehicle product scheduling has always been the toughest aspect in production and manufacturing, especially in the production model of collaboration among multiple factories, production lines and supply chains, which has to handle exponentially growing constraints. In this regard, Lan-You Technology’s AI Factory can read orders and resource ledgers automatically by fully tapping into implicit experience of business experts, achieving the coverage of hundreds of constraints at a time and solving 300,000 variables concurrently, and shortening the production planning and scheduling cycle from 1-2 days in the past to less than 20 minutes. Furthermore, AI Factory also supports the simulation and verification of production scheduling results to ensure that production plans are truly implemented.

In the marketing stage, conventional lead management is a one-way flow line that relies mainly on manual labor, which is not only highly subjective but also inefficient. By comparison, AI Factory can tag leads in real time, identify high-quality leads, allocate them selectively, and even perform automatic invitation, group creation, process quality inspection, script recommendation, and profile extraction automatically through AI, achieving end-to-end closed-loop lead management while improving efficiency and the conversion rate.

Even as proprietary automakers accelerate their global market presence, Lan-You Technology’s AI Factory can provide relevant digital intelligence upgrading support for Chinese automakers in overseas markets, including assisting in building overseas distribution systems, export customs clearance trade systems, end-to-end cost management systems, overseas process management systems, overseas parts logistics management systems, etc.

In terms of dealer management systems, according to Hu Yongli, Lan-You Technology’s solution has already covered 4,000-5,000 first-tier dealers in China. Today, as proprietary automakers go global, Lan-You Technology is introducing this mature management model into overseas markets such as Europe, the Middle East, and Russia.

The overseas production capacity building of proprietary automakers is also a key focus of Lan-You Technology. It is reported that in the Thailand factory project of a leading proprietary automaker, Lan-You Technology helped it build a parts logistics management system covering five business capabilities (material order management, customs management, warehouse management, supplier collaboration management, and quality management) and 15 core business scenarios to achieve a transparent and remotely visible production process.

In addition to overseas production, manufacturing and operation management, Lan-You Technology can also provide relevant services to automakers during the R&D stage. For example, by building and deploying ICV systems in overseas markets, Lan-You Technology enables users to experience the same intelligent functions of exported domestic vehicles in overseas markets as in China, and also fully meet regulatory requirements of overseas markets.

For this purpose, Lan-You Technology also launched the “Smart Flame Program” together with automaker customers, ecosystem partners, universities, etc. during this event to create a full-value-chain application scenario library for AI+ auto research, production, supply, marketing, service and management. The program will release 100+ scenarios in the first stage, with 1,000+ scenarios planned. In the future, it will invest 120 million yuan to promote the successful application of AI+ auto full-value-chain scenarios.

Epilogue

In the era of “AI-defined vehicles”, AI has already broken the boundaries of simple technical tools and transformed into the core engine driving the transformation and upgrading of the whole automotive industry, reshaping the competitive landscape of the domestic market and even the global market.

Next, as AI further penetrates into various aspects of the automotive industry chain, enterprises that can convert data into insights, algorithms into experiences, and technologies into value will be dominate the future.

(Source: Gasgoo)