(Yicai) Dec. 17 -- Foreign automakers in China with annual sales of less than 300,000 units face an up to 80 percent probability of exiting the market, with at least four such companies expected to leave over the coming years, according to a new report.

Foreign and joint venture carmakers selling between 100,000 and 300,000 units a year face a 50 to 80 percent exit probability, with four to five likely exits, per the report released by think tank China EV100 yesterday. In addition, those in the 300,000 to 600,000 unit sales range face a 20 to 50 percent chance of going, with two to three likely to leave.

The high exit probability is closely tied to the market size, the report said. There are more than 45 foreign and joint venture carmakers operating in China, accounting for about 40 percent of passenger vehicle manufacturers.

Among JVs, Dongfeng Peugeot-Citroën, Chery Jaguar Land Rover, Smart Automobile, Changan Lincoln, Changan Mazda, and Jiangling Ford all sold fewer than 100,000 vehicles in the past year, according to insurance registration data.

China's car maker has shifted over the past years, with the share of domestic brands surging to 65 percent in the first 10 months of this year from 36 percent in 2020, while that of foreign rivals dropped to 35 percent from 64 percent. Marginalized automakers such as Japan's Suzuki Motor and Mitsubishi Motors have already left during this restructuring.

German car brands made up 14 percent of China's retail sales last month, Japanese brands 12 percent, US brands 5.7 percent, and South Korean brands just 0.9 percent, data from the China Passenger Car Association showed.

To adapt to market changes, leading foreign carmakers have accelerated their shift to an "in China, for China" strategy, while Chinese teams within JVs have gained more influence over product definition. For example, Volkswagen Group set up its China Technology Research Center and developed a common modular platform electric vehicle architecture exclusively for the country, Toyota Motor set up a local electric intelligent vehicle research and development center, and Nissan Motor established Nissan Technology Development Shanghai to focus on autonomous driving tech, connectivity, and new energy research.

Some foreign carmakers have even begun an "in China, for the world" approach to capitalize on the country's lead in electrification and intelligence, sharing local R&D achievements worldwide. For example, BMW Group developed a voice interaction system based on Alibaba Group Holdings and DeepSeek's large language models for Neue Klasse models.

In addition, Tesla has integrated over 60 Chinese suppliers into its global procurement system, while European automaker Stellantis has taken the reverse approach by forming a JV with China's biggest EV startup Leapmotor to use its autos to fill gaps in the affordable EV market.

Editor: Martin Kadiev