SAIC can't wait, and Shangjie can't afford to lose.

In the ever - changing Chinese automotive market, SAIC Motor was once the undisputed leader. However, nearly four years after the "soul theory" was put forward, SAIC Motor has failed to produce any phenomenal products, and its voice in the public opinion and the capital market has rapidly faded.

In 2021, SAIC's sales volume reached a staggering 5.46 million vehicles, firmly holding the top position in the industry. By 2024, its sales volume plummeted to 4.013 million vehicles, the net profit attributable to the parent company plunged by nearly 90%, and its market value evaporated by over 100 billion yuan. The title of the "largest automotive group in China" was snatched away by BYD.

After the new president, Jia Jianxu, took office, he shouted, "Learn to be humble," urging SAIC employees to lower their stance and start anew.

To reverse the decline, SAIC chose to join hands with Huawei and launched the fifth brand of Hongmeng Smart Mobility, "Shangjie". From the signing of the cooperation agreement between the two parties in February 2025 to the launch of the first vehicle in September this year, it only took nineteen months, which can be described as "rocket - speed".

Behind this, SAIC Motor simply couldn't wait any longer.

Yu Chengdong and Jia Jianxu

The Lost Four Years

In the past four years, SAIC Motor has experienced a gap between its joint - venture and self - owned brands.

When Chen Hong put forward the "soul theory" in 2021, SAIC was still at the forefront of the industry, and its joint - venture brands still had a dominant position: the Buick GL8 dominated the MPV market, and customers even had to pay a premium and wait in line to buy it; the Volkswagen Lavida became a popular family car in China, competing with the Volkswagen Sagitar in the A - class car market, known as the "rivalry between the northern and southern Volkswagen".

The long - term situation of easy success gave SAIC both the resources and the confidence to explore a model of "nurturing self - owned brands through joint - ventures": the profits from joint - venture businesses were widely invested in the technological R & D of self - owned businesses and the creation of new brands, so that SAIC could complete a transformation of old and new driving forces when the era of intelligent electric vehicles arrived.

In 2021, SAIC's passenger vehicle division launched high - end new energy vehicle brands IM Motors and Feifan successively. Among them, IM Motors focused on handling and intelligence, strongly competing with Tesla, while Feifan was derived from Roewe, aiming to get rid of Roewe's label as a ride - hailing car brand and target the market above 200,000 yuan. At the same time, MG, under the protection of its British heritage, was busy selling Chinese cars around the world.

But reality often shows that even when one thinks they are fully prepared, the change of the era still comes unexpectedly.

After 2022, as the penetration rate of new energy vehicles in China soared past 30%, SAIC's joint - venture division, which mainly relied on fuel vehicles, saw a continuous shrinkage in profits and a decline in capacity utilization year after year, becoming the backdrop for the rise of new energy models of other self - owned brands.

Facing the ebb of joint - venture business, SAIC's self - owned brand division launched multi - pronged breakthroughs, but failed to shoulder the main responsibility.

In 2024, the sales volume of IM Motors increased by 71% year - on - year, but the annual delivery was still less than 70,000 vehicles, with an average monthly delivery of less than 6,000 vehicles. The brand has not yet grown into a major player. After IM Motors targeted the 200,000 - 300,000 - yuan price range, Feifan lost its expected market position and was eventually merged back into Roewe. The MG brand, which avoided the fierce domestic competition and focused on overseas expansion, also saw its sales decline in 2024 due to a trade war.

Before the slogan of "learning to be humble" was put forward, the market had already shattered SAIC's pride.

The Soul is in a Horse Race

In the situation where the joint - venture and self - owned brands have not completed the transition, SAIC has re - arranged its joint - venture cooperation and carried out reverse technology output to joint - venture brands.

In 2024, the AUDI E5 Sportsback, which was further developed based on SAIC's vehicle platform, was officially unveiled. At the end of the same year, SAIC and Volkswagen renewed their joint - venture agreement in advance and planned to jointly develop more than a dozen pure - electric and plug - in hybrid models. At the same time, SAIC - GM began to introduce technologies from the same source as Roewe into Buick's new cars.

AUDI E5 Sportsback, which uses a large amount of SAIC's technological assets

In the transformation from technology import to reverse technology output, the intelligent and new - energy technologies developed by SAIC with huge investments have a larger stage and more possibilities for monetization. However, it is a bit embarrassing that the soul that SAIC most wants to master - the intelligent driving technology independently developed by SAIC - is not at the center of these cooperation stages.

SAIC's efforts in researching and developing intelligent driving technology and defending its "soul" have been a multi - party horse race with a complex process and unexpected results in the past few years.

In 2021, SAIC established Zero Beam Technology. This company, formerly known as SAIC Group's Software Center, is responsible for the R & D of core technologies such as electronic and electrical architecture, intelligent cockpit, and intelligent driving, and should have a very high strategic position. As a platform - type software technology company, it is supposed to build a moat for SAIC's intelligent technology sovereignty.

Zero Beam is the main force promoting the application of Horizon's chip solutions in SAIC's vehicle models

At the same time, within SAIC's Passenger Vehicle Technical Center, there was also an intelligent driving center team that was most closely related to vehicle model projects, which was conducting independent R & D of intelligent assisted driving technology and first applied it to the Feifan R7. In 2022, this team was incorporated into the newly established SAIC Innovation and R & D General Institute, which can be regarded as the regular army for R & D of intelligent driving within SAIC's system.

In addition, as IM Motors became a key project of SAIC after 2021, SAIC led the Series C financing of Momenta in 2021, becoming an important shareholder, and bet on Momenta for the mass production of IM Motors' intelligent assisted driving technology [1].

After 2024, Zero Beam struggled with the lack of mass - production experience in intelligent driving projects, and the self - R & D team of the intelligent driving center lost its strategic fulcrum after Feifan cancelled its independent brand. At this time, it was not SAIC's in - house R & D team, but the "adopted son" Momenta that actually helped SAIC defend its "soul" in the field of intelligent driving.

However, the contradiction lies in that Momenta also has its own development needs. Therefore, while playing the role of defending SAIC's "soul", it is also selling its technology to other automakers such as Mercedes - Benz, Toyota, and Nissan.

What's more embarrassing is that even though Momenta always gives priority to applying the latest algorithms and engineering progress to IM Motors' models, maintaining the superficial dignity of SAIC's "soul", it has not helped IM Motors create a best - selling model with long - term high sales.

After all, for a car to achieve commercial success, it needs to do many things right, and having good intelligent driving technology is just one of them.

With the increasing market pressure, after years of the "horse race" for the "soul", SAIC suddenly realized that the top priority was no longer to struggle over the ownership of the "soul", but to save its "body" first.

On the same timeline, Huawei's business related to intelligent electric vehicles also experienced an "internal horse race":

The Smart Selection Vehicle Model (i.e., Hongmeng Smart Mobility) provides a comprehensive set of unified services in terms of technology, design, and marketing for automakers through Huawei's in - depth involvement. It not only provides the "soul" but also helps automakers transform their "body".

Some automakers that had in - depth cooperation with Huawei in the early stage have frequently produced best - selling models. For example, the Wenjie series under the Seres brand, as the "eldest son" of Huawei's Smart Selection Vehicle Model, sold more than 380,000 vehicles last year, driving Seres from the verge of delisting to a market value of over 200 billion yuan, once exceeding SAIC, giving a vivid lesson to the automotive industry.

In contrast, the cooperation depth of the HI model is limited, focusing on technology licensing. Huawei provides a full - stack intelligent solution but does not participate in product definition and sales. The market performance of products mainly depends on the automakers' own capabilities.

For example, the annual sales volume of the Avita series was 73,600 vehicles in 2024. Although the monthly sales exceeded 10,000 vehicles for three consecutive months, it was still lower than the adjusted sales target. As the first customer of the HI model, ARCFOX has never entered the mainstream new - energy vehicle camp.

Comparing the two, it is obvious which model to choose for automakers eager to find a quick - fix solution.

In the spring of 2025, the Shangjie brand made its debut at the Hongmeng Smart Mobility press conference. SAIC temporarily put aside its obsession with the "soul" and chose to stand on the shoulders of another giant.

The Newcomer

However, the entry of Shangjie does not mean that SAIC can just sit back and relax.

Compared with the HI model, which mainly provides software and hardware technologies to automakers in a relatively light - weight way, Hongmeng Smart Mobility is a heavy - weight model that involves deeper intervention in automakers and requires the simultaneous use of Huawei's 2B and 2C capabilities.

At the end of last year, Yu Chengdong appeared on CCTV with the chairmen of the four partner automakers of Hongmeng Smart Mobility and clearly stated that "Hongmeng Smart Mobility has limited human resources and will currently focus on the 'Four Brands' to make them into successful examples." This means that before Shangjie enters the market, it has to face the problem of how much human and material resources Hongmeng Smart Mobility can allocate to it.

The first mass - produced model of Shangjie, the H5, has a relatively traditional appearance

At the same time, in order to avoid competition among the Four Brands, Hongmeng Smart Mobility had already planned the market positions of each brand in advance:

The Wenjie brand focuses on SUVs and family users; the Zhijie brand targets a younger audience and focuses on sports, aiming to compete for Tesla's market share; the Xiangjie brand targets the executive and station - wagon markets, emphasizing comfort; the Zunjie brand aims at the ultra - luxury segment. The Four Brands cover a price range from 250,000 yuan to 1 million yuan, forming a relatively complete market layout with clear distinctions and complementarity among them.

However, with the intensification of competition and the development needs of each brand, the boundaries have begun to blur. For example, the Zhijie brand was originally competing with Tesla in the pure - electric vehicle market. But after the launch of the extended - range version of the Zhijie R7, its competitor became the Wenjie M7. Both models are equipped with Huawei's ADS 3.0 and Hongmeng cockpit in their core configurations and use the same energy form.

The late entry of Shangjie has added another challenge to the product planning of the Five Brands.

In 2024, when asked whether to launch low - priced models, Yu Chengdong emphasized that "due to the lack of cost - control ability, Hongmeng Smart Mobility will not consider launching cars below 200,000 yuan for the time being" and even said bluntly that "models below 300,000 yuan basically incur losses."

However, for the sake of Shangjie, Hongmeng Smart Mobility has given the green light and will compete in the price range of 200,000 yuan or even lower, which is not a familiar territory for it.

Offering high - quality products at low prices has never been Hongmeng Smart Mobility's core competitiveness. Whether it is the Wenjie M9 or the Zunjie S800, they all reflect the philosophy that "Huawei - affiliated cars" are more popular when they are more expensive. This is called the Veblen Effect in consumer psychology, which means that the higher the price and the scarcer the product, the more popular it will be. Because at this time, the price is not just the price itself, but has become a status symbol pursued by high - end consumers.

The market below 200,000 yuan is a tough battlefield for Chinese electric vehicles. Users value functional value and cost - effectiveness, which will pose a huge challenge to SAIC: how to effectively reduce costs to accommodate Huawei's not - cheap intelligent solutions.

In addition, we learned that the Shangjie H5 was not defined by Huawei from the very beginning like the Wenjie M9 and the Zunjie S800. Instead, it was deeply modified based on a model under development by SAIC, similar to the first - generation Wenjie M7, except that its intelligent driving and intelligent cockpit are in full - fledged versions from the start.

However, the opportunity lies in the fact that SAIC has been operating in the field of intelligent technology for many years and has laid a relatively solid foundation in the electronic and electrical architecture, which provides convenience for the rapid application of Huawei's intelligent solutions.

At the same time, in the 200,000 - yuan - level market, there was a gap for high - Huawei - content models before. A low - priced model with Huawei's brand endorsement and equipped with Huawei's full - set of automotive intelligent technologies has a similar feeling to Huawei's sub - brand Honor in the past, and Honor had very good sales.

Although Shangjie seems to have entered the Hongmeng Smart Mobility system as a newcomer, based on the proven track