Can huawang, built from scratch, restart gac?

The year 2025 marks the first year following the leadership reshuffle at GAC Group, the first year of the implementation of the three-year Panyu Action Plan, and naturally, the first year the entire group anticipates breaking away from previous survival modes to achieve a new beginning.

At this special stage, the development of each subsidiary carries a strong sense of mission, and it is imperative that everyone puts in their utmost effort to steer the development of each brand onto the right track.

The market performance of GAC Toyota and GAC Honda determines that maintaining stability in joint ventures is what the entire group most hopes to see. As long as they keep pace with the main force, they are one step closer to the expected goal. In comparison, everything related to the independent segment will continue to be the focus of the group's attention in the future.

In the first half of the year, Trumpchi, Aion, and Hyper have indeed launched many major initiatives. They have introduced new vehicles in various market segments, prioritized the development of extended-range hybrid technology, and brought in external talent to lead major marketing strategies. However, overall, these actions are still focused on leveraging the existing foundation of GAC's independent brands.

The outside world is like what? GAC has no reason not to know.

While Chinese brands are rising strongly, it is also an undeniable fact that the market is concentrating towards the leading players. The most obvious example is that when Huawei acts as a supplier or a behind-the-scenes leader guiding car companies in car manufacturing, and users set their purchasing anchors on related products, it becomes extremely difficult for traditional car companies, regardless of size, to venture alone. This has led to more and more car companies choosing to partner with Huawei.

Given this situation, GAC Group has naturally lowered its defenses.

In the first half of the year, GAC Group and GAC Toyota integrated Huawei elements into their product systems. From now on, besides making significant strides toward the timeline for product launches, GAC also needs to present the future development plans of the previously established Huanxiang Auto to consumers.

The first new car from Shangjie, the H5, is already on the horizon, while the all-new AITO M7 and Xiangjie S9T are nearing their release. All signs are urging GAC to quickly draft a new blueprint for Huawang to solidify the foundation of GAC's independent brand before the next market upheaval arrives.

01"Huawei Vision" launches, reinventing GAC

On August 13, GAC Group announced that it held the 8th meeting of the 7th Board of Directors via communication, during which the proposal regarding GAC Aion's investment in Hwasong Motors was reviewed and approved.

According to the "Proposal," GAC Group agrees that its subsidiary, GAC Aion New Energy Automobile Co., Ltd. (hereinafter referred to as "GAC Aion"), will increase its investment in Huawang Automobile Technology (Guangzhou) Co., Ltd. (abbreviated as "Huawang Automobile") by 600 million yuan. After completing this capital increase, the company will directly hold 71.43% of Huawang Automobile's equity and indirectly hold 28.57% of Huawang Automobile's equity through GAC Aion.

Meanwhile, on the official WeChat account of GAC Group, Huawang Auto has also launched its channel investment campaign. The locations of its first batch of 40 stores cover almost all of the first- and second-tier cities across the country.

Based on the previously known information, there is still some time before the launch of Huanwang Auto's first model. However, considering the original intention of Huanwang's establishment and the overall trend of the new energy market, the mid-to-high-end market will be its core focus area. In other words, GAC's independent upward development will simultaneously be reflected in Huanwang.

Currently, within the GAC system, "independent upward development" has been an ongoing expectation of the group. To this end, in the first half of this year, Trumpchi leveraged its collaboration with Huawei to launch the Aspiration series, which focuses on high-end vehicles. The Aspiration M8, S7, and the upcoming S9 have become the main drivers for the brand to break through the 300,000 RMB level.

On the other hand, Haobo has separated from Aion internally, becoming a sub-brand focusing on the high-end new energy market, with the dual-power version of the HL being the key piece in the current brand reshaping. Furthermore, information released by the Ministry of Industry and Information Technology indicates that Haobo intends to surpass its boundaries in the sedan market with the new car A8, anchored above the Haobo GT.

From the consumer's perspective, both Trumpchi and Hyper have a strong GAC style. Looking at competitors with similar genes in the market, such as those from the SAIC group, BAIC group, and Dongfeng group, without exception, they all find it difficult to truly compete with the new generation of high-end independent brands.

Reality is just so helpless. GAC should also understand the disadvantages it faces in industry competition.

Therefore, despite Huawang Auto having a strong background in its establishment, when Huawei participates in the competition in the Chinese car market, traditional car manufacturers can only choose to cooperate with it to leverage its strengths in order to break through successfully. As for GAC, since this is the reality, there is no reason to avoid it.

Back in July 2021, GAC had already shown interest in collaborating with Huawei. At that time, GAC Group announced that its board of directors had approved the proposal for the GAC Aion and Huawei (AH8 model) project. According to the strategic cooperation agreement signed between the company and Huawei Technologies Co., Ltd., both parties would build a new generation smart car digital platform based on GAC's GEP3.0 chassis platform and Huawei's CCA (Computing and Communication Architecture). This platform would integrate Huawei’s full-stack smart car solutions, allowing both companies to jointly define, develop, and create a series of future-oriented smart vehicles.

The announcement also stated that the first model jointly developed by both parties will be a mid-to-large intelligent pure electric SUV, with a total project investment of 788 million yuan. It is planned to be mass-produced by the end of 2023, with project funding sourced and coordinated by the company.

In early 2023, unfortunately, with the group's official announcement, the GAC Aion AH8 project changed from joint development with Huawei to independent development. After this change, Huawei will continue to participate as a key supplier in the development and cooperation of the company's independent brand models. The total investment of the project was adjusted from 925 million yuan to 1.233 billion yuan, and the in-depth cooperation between GAC and Huawei came to an abrupt end.

02 Build from scratch, erect high walls.

What exactly is HUAWEI AUTO aiming to do today? Is it to continue the somewhat regretful partnership between GAC and Huawei? Or is there another purpose behind rekindling the relationship and accelerating their plans in 2025?

From research and development to production, from systems to channels, the thorough actions taken solely for Hua Wang Auto are enough to convince outsiders that in the cooperation between GAC and Huawei, GAC does not regard Huawei as a supplier from the perspective of being the base and controller of GAC.

It is said that GAC Group, which has actual control over HWAUTO, finds it very difficult to create a third successful cooperation model different from the "Four Realms" and HI models.

In the current market situation, the mid-to-high-end market dominated by the four realms has been deeply imprinted with the Huawei label. However, this does not mean that no one else can take a share. Relying on the arrival of Shangjie, SAIC can be another strong player entering the game. Therefore, GAC's formation of Hwa-Wang Motors is surely not weaker than any competitor.

As is well known, all products associated with Huawei consider the quality of intelligence as a core competitive point to counter opponents. This may also be one of the most anticipated outcomes when Huawei Auto was initially established. However, from the perspective of GAC, delving deeper into how to produce subsequent products with advantages that more directly address consumer pain points is also crucial.

From the information currently available, we know clearly that the establishment of Huanwang Auto is a process from 0 to 1. Even though future mass production will still be conducted within the GAC manufacturing system, the fact that the team was built without any assistance from GAC, with all personnel being recruited externally, is enough to indicate the underlying nature of Huanwang.

Under normal circumstances, given the intensely competitive environment across the industry, GAC's performance this year is expected to decline compared to previous years. With the new leadership initiating a restructuring of the group, the pains of transformation will continue for some time. However, the hopes placed on HAWAS undoubtedly exceed those for any other sub-brand under GAC.

Hua Wang, only success is allowed, failure is not permitted.

In my opinion, regardless of the external skepticism, this represents the heartfelt sentiments of GAC Group from top to bottom.

At the beginning of the year, for Haobo, a brand that has just emerged from the Aion system, the newly appointed chairman of GAC Group boldly declared, "The group will provide unlimited support for the development of Haobo." With Huawang, such support can only be more thorough.

The competitive landscape of China's car market next year is still difficult to describe precisely. However, in terms of market trends, the pressure will certainly be no less than this year. As for Huawang Auto, next year will be the first year for its brand to compete in the market.

Some people believe that the belated arrival of Huawei's Hope will face formidable opponents that may be difficult to deal with, including Huawei's direct affiliates "Four Realms" (excluding the Respect Realm) and Xiaomi Automobile.

"Currently, the company is steadily advancing team building and product development work, with the first model expected to be launched in 2026."

Perhaps in GAC's world, the current situation of Huawang can be summed up in a simple sentence like this. However, regardless of this, GAC held a mobilization meeting for the Huawang project development this month, deploying it from a strategic level and emphasizing that the project's success is of great significance to GAC's overall development. It can be seen that Huawang is not necessarily less important to GAC than Trumpchi was in its time.

GAC urgently needs revitalization, and this is no child's play. Under heavy pressure, Huawang has no reason to slack off.