Why does Yu Chengdong insist on making station wagons?

On September 16, 2025, Hongmeng Auto and BAIC BluePark (600733.SH) launched their second jointly developed model, the "Xiangjie S9T". This model is a station wagon version developed based on their first jointly developed vehicle, the Xiangjie S9. The official guide price ranges from 309,800 yuan to 369,800 yuan. Within 24 hours of opening pre - orders, 7,500 firm orders were placed. Although it is not outstanding compared to the high - end SUV models under Hongmeng Auto, it has far exceeded the sales performance of the base - model Xiangjie S9.

A station wagon, in essence, is developed by extending the "trunk" part of a three - box sedan upwards to the same level as the roof on the basis of a three - box sedan, thus forming a large and regular storage area connected to the passenger compartment. People can understand it as a combination of "the driving experience of a sedan" and "the large trunk of an SUV".

The project establishment process of this model was not smooth sailing. Yu Chengdong, Executive Director of Huawei, and Zhang Jianyong, Chairman of BAIC Group, said at the press conference that before the project establishment, BAIC was inclined to develop a large - sized SUV targeting the price gap between the Wenjie M9 and the Zunjie, while Yu Chengdong strongly advocated choosing a station wagon. Eventually, Yu Chengdong convinced BAIC, and the Xiangjie S9T was successfully approved for development.

According to our observation, there are mainly three reasons behind Yu Chengdong's insistence on developing a niche product type like a station wagon: 1. Hongmeng Auto needs to break out of its comfort zone in the SUV market; 2. With the changes in the Chinese automotive market, non - SUV models are becoming increasingly important; 3. In the era of new energy vehicles, station wagons can better leverage their advantages and avoid disadvantages.

01 Breaking Out of the SUV Comfort Zone is a Must

The richness and comprehensiveness of the product line are the foundation for the maturity of an automotive brand or brand alliance. Huawei's Hongmeng Auto is advancing rapidly, but its product series needs to address the challenge of category imbalance.

In the SUV segment, Hongmeng Auto has built a highly dense product matrix ranging from 200,000 yuan to 500,000 yuan. The four main models, the Wenjie M5, M7, M8, and M9, cover the medium - sized, mid - large, and large - sized SUV markets. The Zhijie R7 and Shangjie H5 are also SUVs. Hongmeng Auto has made arrangements in all mainstream price segments of the SUV market.

In contrast, the sedan product line appears thin. Even including the Xiangjie S9T, there are only four sedans in the Hongmeng Auto ecosystem, and the price distribution is very scattered. The Zhijie S7, Xiangjie S9, and S9T cover the 200,000 - 400,000 - yuan range, and then there is the million - yuan luxury car, the Zunjie. In the first eight months of 2025, the cumulative sales of Hongmeng Auto's SUV models exceeded 270,000 units, while those of sedans just exceeded 20,000 units.

This "one - long, one - short" product structure is partly due to path dependence. The success of the Hongmeng Auto model began with the Wenjie M5 and M7. These two SUV products achieved great success in the market, which built confidence for subsequent partner automakers and allowed the team to accumulate experience in defining, developing, and marketing SUVs. Continuing to launch models such as the M8 and M9 along the path of success is the expansion method with the lowest risk and the quickest results.

On the other hand, the rapid growth of the SUV category in the Chinese automotive market in the past few years has also led automakers to generally tilt their resources towards SUVs.

However, the challenges brought about by this strategy are gradually becoming more concrete - it is not only easy to cause internal strife among different models, but also, lacking the support of the sedan category, it is easy to hit the sales ceiling.

02 Sedans are a Must for Reaching One Million in Annual Sales

There has long been a view in the market that the rise of SUVs is continuously squeezing the living space of sedans. However, from a macro - data perspective, the market position of sedans remains stable.

According to the data from the Passenger Car Market Information Joint Committee of the China Automobile Dealers Association (hereinafter referred to as the Passenger Car Joint Committee), from 2019 to January - July 2025, the market share of SUVs steadily climbed from 44.3% to 49.2%, and the market share of sedans decreased from 49.0% in 2019 to 46.1%. Although SUVs have indeed occupied some of the sedan's market share, the basic pattern of the two each accounting for about half of the market has not changed fundamentally.

For any automotive brand aiming for an annual sales volume of one million units, it is unimaginable to lack competitive products in the sedan market. Looking at leading automakers at home and abroad, the real cornerstone products have always been sedans. BYD's Qin series; Geely's Emgrand and Xingrui; Volkswagen's Lavida, Sagitar, and Passat; Toyota's Corolla and Camry; BMW's 3 Series; Mercedes - Benz's C - Class. Without a classic sedan product, it is impossible to become a successful automotive brand.

Specifically for Chinese independent brands, the importance of the sedan category is even more prominent.

Comparing the year - on - year growth rates of sedans and SUVs of independent brands from 2019 to January - July 2025, except in 2023 (the SUV growth rate was 17.6%, and the sedan growth rate was 13.4%), the year - on - year growth rates of sedans of independent brands were significantly higher than those of SUVs. This indicates that sedans are becoming a new engine for the growth of independent brands.

In recent years, a number of successful independent - brand sedans have emerged in the market, such as BYD's Qin and Han, Geely's Xingrui and Xingyuan; Xiaomi's SU7; XPeng's MONA M03, etc. Their sales figures have proven that Chinese brands also have strong product competitiveness and market appeal in the sedan field.

Hongmeng Auto is not just an automotive brand. More accurately, it is an ecological brand in a new technology cycle. To evolve from a successful business model into a large - scale automotive brand alliance, it must create sedan products that can serve as benchmarks.

03 Why a Station Wagon?

Choosing a station wagon as a breakthrough is a choice based on the characteristics of new energy vehicles. In the era of electrification, the station - wagon form can fully leverage the structural advantages of a pure - electric platform while avoiding the problems encountered by traditional three - box sedans in the electrification transformation.

First, at the level of exterior design, a station wagon can effectively solve the problem of disproportionate body proportions in large - sized new energy sedans. To maximize the cabin space, pure - electric platforms generally adopt the "four - wheel - at - four - corners" design, that is, the wheels are arranged as close as possible to the four corners of the vehicle body, which results in very short front and rear overhangs (the distance from the front wheel to the front of the vehicle / the distance from the rear wheel to the rear of the vehicle).

This characteristic has little impact on models with smaller body sizes. However, once the vehicle length approaches or exceeds 5 meters, it is easy to cause visual incoordination, with the front and rear of the vehicle being short and cramped, and the middle section of the body being too long, resulting in an overall disproportionate body. Models such as the Zhijie S7, Xiangjie S9, and even the Zeekr 007 are all facing this challenge to varying degrees.

There are currently two mainstream solutions in the industry. The first is to return to tradition, that is, to lengthen the front and rear of the vehicle, imitating the classic body proportions of traditional fuel - powered vehicles. Representative models include the Tesla Model 3 and the Xiaomi SU7. The advantage of this approach is that the body proportions are more in line with popular aesthetics, and it can also provide a front trunk with a considerable volume. However, the cost is sacrificing the internal space advantage of the pure - electric platform, which is equivalent to using the structure of an electric vehicle to create the space of a fuel - powered vehicle.

The second solution is to reshape the overall vehicle proportions by changing the roof and rear - end shapes. Shooting - brake station wagons and hatchback designs are representative examples. By extending the roof line backward to integrate with the rear, the station wagon visually lengthens the vehicle body, effectively avoiding the proportion imbalance caused by the short rear overhang.

The sales of the Zeekr 001, 007GT, and the new XPeng P7 have proven the market's acceptance of this design solution. In today's era when consumers have increasingly strict requirements for the "appearance" of cars, it is difficult for a model with obvious appearance flaws to survive in the market competition.

Second, at the level of user experience, a station wagon can integrate the core advantages of sedans and SUVs, becoming a more comprehensive solution.

A station wagon has better aerodynamic performance than an SUV. Due to its lower body height and smaller windward area, it has an inherent advantage in the drag coefficient, which means lower energy consumption and longer driving range for new energy vehicles.

In addition, a station wagon inherits the low center of gravity of a sedan, and the large battery arranged on the chassis of the pure - electric platform further lowers the vehicle's center of gravity, offsetting the impact of the raised rear of the vehicle. Its handling performance can even be better than that of sedans in the same class. At the same time, it provides far more storage space than a three - box sedan and has the same loading flexibility and versatility as an SUV.

Another important factor is that with the support of technologies such as air suspension, the shortcomings of a station wagon can be effectively compensated. Air suspension can adjust the chassis height, enabling today's station wagons to have comparable passability to SUVs, meeting users' needs for occasional driving on rough roads, such as sandy, grassy, and gravel roads.

Therefore, in the era of new energy vehicles, the station wagon has become a special category that is most likely to achieve a model without obvious shortcomings.

Yu Chengdong's insistence on developing a station wagon is neither a "willful" act nor a "bandwagon" move. It is a breakthrough in the face of the over - crowded SUV product line of Hongmeng Auto. After two setbacks in developing three - box sedans with the Zhijie S7 and Xiangjie S9, the station wagon has become one of the few options for entering the sedan market.

This article is from the WeChat official account "Finance AI Wave", author: Yin Lu, editor: Xie Lirong, published by 36Kr with authorization.