GAC Group has also partnered with Huawei

Author | Wang Xiaojun

Editor | Chai Xuchen

The automotive industry is highly competitive, and many traditional car manufacturers are choosing to partner with Huawei to enhance their own "Huawei content."

On November 30, GAC Group signed a deepening cooperation agreement with Huawei. GAC Group will create a brand new high-end intelligent new energy vehicle brand in addition to its Trumpchi, Aion, and Haobo brands.

The two parties will collaborate in product development, marketing, and ecological services for the new brand. This cooperation is also an important move for GAC as it bets on the second half of intelligent transformation. Moreover, for GAC, its long-anticipated high-end new energy brand Haobo has struggled to gain traction, and this collaboration to create a high-end brand perfectly compensates for GAC's shortcomings in high-end development.

However, GAC stated that this cooperation is not the previous "Aito, Zhijie, Zunjie, Xiangjie" Harmony Intelligent Travel model, but rather an exploration of a new cooperation method, although specific details have not been disclosed by the official.

Affected by this positive news, on December 2, GAC Group's Hong Kong stock closed up 25.17%, also tasting the "sweetness" of Huawei concept stocks.

As fellow Guangdong enterprises, GAC and Huawei began collaborating on intelligent networking as early as 2017. By 2021, GAC Aion decided to test the waters with the AH8 model using Huawei's HI model, equipped with GAC's GEP3.0 chassis platform and Huawei's full-stack intelligent automotive solutions.

However, this cooperation ultimately did not materialize. At the end of March last year, GAC announced that the Aion AH8 project would be changed to independent development, and Huawei would continue to cooperate with GAC Group as a supplier.

But now, GAC has once again joined hands with Huawei, reflecting a reversal of fortunes for both companies.

Before 2023, GAC held two major joint venture brands, contributing over 1.5 million units per year in sales for the group. Aion was once a new force valued at nearly 100 billion, with monthly sales exceeding 50,000 units. At that time, the magic of Huawei's HI model had not yet been unleashed, and representatives like ZEEKR and Avita had not achieved the expected scale, so GAC naturally had reasons not to deepen the cooperation.

Now, GAC is no longer in its former glory, while Huawei's automotive business is thriving, with many established car manufacturers eager to collaborate with Huawei and making cooperation with Huawei a marketing focus. This has forced GAC, which is eager to catch up on intelligence and high-end development, to embrace Huawei again, leading to a closer partnership.

In September of this year, the two parties signed a digital strategic cooperation memorandum in Shanghai, planning to further deepen cooperation in the digital field. At the Guangzhou Auto Show, GAC introduced that their cooperation would focus on GAC Trumpchi, launching three major series of new mid-to-high-end SUVs, MPVs, and sedans, all equipped with Huawei's advanced intelligent driving technology.

Now, the cooperation between the two parties has directly elevated to a brand new level. The official has denied the Harmony Intelligent Travel cooperation model, and from the personnel present at the signing event, Huawei's rotating chairman Xu Zhijun and CEO of Huawei's automotive business unit Jin Yuzhi are both key figures in the HI model, indicating that this cooperation is likely also related to the HI model.

Once again partnering with Huawei reflects GAC's desire for revival Since the beginning of this year, GAC has faced tremendous challenges in sales, with almost every month's sales showing a year-on-year decline. In the first ten months of this year, GAC Group's cumulative sales reached 1.52 million units, a year-on-year decrease of 24.66%. Moreover, the decline is not limited to joint venture brands; the sales of independent brands have also dropped by around double digits. Even the once-star new force Aion has lost its competitiveness in the fierce competition and is beginning to fade.

As various companies compete in the second half of the intelligent transformation, GAC's news in this area seems somewhat sparse and requires significant efforts to catch up.

Feeling the crisis, GAC has decided to undergo comprehensive reform, primarily reflected in the transformation of its independent brands and the acceleration of its overseas expansion.

At the Guangzhou Auto Show two weeks ago, GAC announced the launch of the three-year "Panyu Action," relocating its headquarters to Guangzhou Panyu Auto City, and shifting its management model from strategic control to operational control, directly descending to the front line. This action aims to ensure that the front line hears the sound of gunfire and accelerates its own transformation.

This will also be the focus of GAC's transformation in the coming period. For its independent brands, GAC has set a new goal for the next three years: to achieve independent brand sales accounting for over 60% of the group's total sales by 2027, challenging the target of 2 million units in independent brand sales.

The collaboration with Huawei is one step towards GAC's independent rise. For the three existing independent brands, GAC plans to launch 22 new models in the next three years, including 7 models in 2025, covering all mainstream new energy power forms such as pure electric, extended range, and plug-in hybrid.

In addition to betting on the comprehensive rise of independent brands, GAC has also actively invested in overseas markets this year to capture new growth.

At the Paris Auto Show in October, GAC launched its global strategic model AION V second generation; GAC also decided to establish a technology center in Europe, build a local ecosystem, and construct factories in Europe, aiming for full market coverage across Europe by 2028.

The transformation of the automotive market is becoming increasingly fierce year by year, with companies seeking new strengths or suitable partners while fiercely competing in the second half of intelligent transformation.

In the face of setbacks in both joint ventures and independent brands, GAC has no choice but to employ greater strategies to maintain its position.

Currently, besides the "Four Realms" of smart selection vehicles, many brands such as Changan, Voyah, and Equation Leopard are also collaborating with Huawei, but the specific performance of each brand will depend on its own strength. GAC also needs to accelerate the completion of its own intelligent and high-end puzzle to possibly gain more initiative in future competition