Domestic Brands Target Premium Large SUVs and Shooting Brakes to Capture High-Margin Segment

During the 2026 Beijing Auto Show, numerous Chinese automakers unveiled large SUVs and shooting brake models targeting the mid-to-high-end market. Large three-row SUVs—commonly referred to as “big three-row” SUVs—have become a strategic focus for automakers due to their spacious interiors that cater to family users’ needs and declining entry barriers driven by advancements in new energy vehicle (NEV) technology. New energy-focused brands such as Li Auto, NIO, and Zeekr, alongside traditional domestic brands like Hongqi, WEY, and Zeekr, all launched new large-size SUVs. BYD, meanwhile, expanded its presence across the mid-to-high-end and ultra-luxury segments through new models—including the Seagull 08, Sealion 08, and Tang Plus—as well as its premium sub-brands Denza, Fangchengbao, and Yangwang. According to data from the China Passenger Car Association (CPCA), domestic brands captured a 65.3% market share in 2025, a significant increase from 35.7% in 2020. This growth was primarily driven by vehicles priced between RMB 50,000 and RMB 150,000, which accounted for 70.6% of sales in that segment during the first half of 2025. However, in the above-RMB-150,000 price range, domestic brands still held less than 50% market share. Industry data shows that higher-priced vehicles generate substantially greater profits: although sales volume in the RMB 150,000–250,000 segment is roughly half that of the RMB 50,000–150,000 segment, their total profit is comparable. Vehicles priced above RMB 250,000 sold approximately 4 million units annually, generating around RMB 80 billion in profits. Amid persistently declining industry profit margins—which fell from 4.1% in 2025 to 3.7% in March 2026—and adjustments to the 2026 “trade-in-for-new” subsidy policy (which now ties subsidies to vehicle prices, disadvantaging low-end models)—automakers widely view moving upmarket as a critical strategy to improve profitability. However, risks are emerging: over 30 models now compete in the large SUV segment, raising concerns about oversupply. While shooting brakes offer differentiation potential, they remain a niche category—the best-selling model in 2025 achieved only several thousand units in monthly sales. Industry insiders worry that excessive crowding into these segments could trigger a new round of price wars, eroding expected profits.