The Bangkok International Motor Show is a great place to exchange views with motoring journalists from all over the world. Not only do members of this fraternity attend major car launches around the world, the Bangkok Motor Show is the one place where they are brand-agnostic and car-focused discussions are brutally frank.
The most interesting topic was the multiplicity of brands and sub-brands of Chinese car marques. A grizzled automotive editor from a Turkish economic magazine had the most persuasive argument.
He explained that the Chinese brand strategy cannot be viewed from the perspective of legacy carmakers. “We should understand that the Chinese, both the people and the companies, are very competitive, even from young.”
He described the multi-brand strategy of China’s carmakers as a sophisticated financial and risk-management structure, designed to maximise access to funding from provincial as well as central governments while creating a firewall against failure.
The managers of Chinese car brands will of course say their multiple brand strategy is purely business-driven to solve a brand identity crisis, pursue global growth and effectively compete in a saturated domestic market.
But as per our Turkish journalist’s argument, these managers won’t openly discuss subsidies.
Behind the brands
Central government subsidies are a critical part of the reason for what is obviously brand duplication. Both direct and indirect government subsidies have been a massive, multi-billion-yuan driver of China’s car industry: a multi-brand structure helps automakers maximise their share.
From 2009 to 2023, total Chinese government support for the new-energy vehicle sector is calculated to have been US$231 billion (RM906 billion). This includes buyer rebates, sales tax exemptions and research and development funding.
A Wuhan-based carmaker reported a net profit of 434 million yuan (RM252 million) in the first seven months of 2025 for one of its sub-brands. However, a closer look reveals that 642 million yuan of its income came from government subsidies. Without this direct support, the brand would have been operating at a loss.
Provincial support
The competition for subsidies isn’t just between brands, but also between the provinces and cities that own them. Local governments pour money into their local champions to protect jobs and economic stability.
This creates a powerful incentive for groups to launch new brands, each potentially unlocking a new stream of local funding. A chart from an industry analyst visually confirms that government-linked brands have the most state involvement.
Then there is the firewall strategy where brands that consistently fail to meet targets are closed without compunction. When sub-brands rack up huge losses, the holding company is able to shut them down. The core brand remains intact, shielded from the worst of financial damage and reputational harm.
Weeding out brands
The industry is now going through another phase of consolidation. Analysts argue that many of the newer brands launched over the past few years are now facing the test of profitability.
As the market slows and subsidies are cut, the expectation is that dozens of these sub-brands will be eliminated. The ones that survive will be those that have proven their value, while the unprofitable ones can be discarded without dragging down the parent company.
In a market described as having razor-thin margins to the point that only a handful of carmakers are profitable, this multi-brand structure allows giant makers to aggressively pursue every opportunity for growth and funding while strategically managing the immense risk of failure in an overcrowded industry.
The subsidy programme is also being pivoted to help only the profitable companies. Where state aid previously favoured government-linked carmakers, it will now also go to privately owned and profitable car companies.
Yamin Vong is on Facebook at yamin.com.my.
The views expressed are those of the writer and do not necessarily reflect those of FMT.