Just as some observers were predicting a bumpy ride for SAIC, the embattled conglomerate undertook a series of drastic reforms to show that it is not yet ready to throw in the towel amid China鈥檚 cut-throat electric vehicle market.

These efforts started with a leadership reshuffle, including the appointment of Jia Jianxu to the top job as SAIC Group chairman.

Jia is a veteran sales manager with decades of experience with SAIC and Yanfeng, an auto parts supplier affiliated with SAIC-GM, the joint venture with General Motors.

After taking the helm, he steered SAIC toward a more pragmatic approach.

Letting go of ego

In October, just three months into his tenure, Jia made a bold statement at an internal meeting: 鈥淲e need to make an impact, but we also need to sit while kneeling.鈥�

This came from an executive whose organization was once too proud to work with Huawei and says a lot about the need for SAIC to accept changing market realities, cast aside its ego and rebuild from the ground up.

Against this backdrop, SAIC had no choice but to reconsider entrusting its 鈥渟oul鈥� to a supplier that can help it regain strength. Yet, at this stage, talk of the 鈥渟oul鈥� seems exaggerated. After all, striking a deal with Huawei isn鈥檛 tantamount to making a Faustian bargain.

Rather, the partnership seems to be a practical move necessitated by circumstances, and it aligns well with the adage: If you can鈥檛 beat them, join them.

After shedding ego, things become much easier.

The SAIC-Huawei partnership has had much of the Chinese auto industry abuzz with anticipation about what it has in store for the country鈥檚 already intensely competitive auto market.

According to China Business News, the first model under the new joint-venture Shangjie brand will feature Huawei鈥檚 cockpit and intelligent driving technology, available in two versions with different ranges. The model is expected to launch in the fourth quarter of this year.

Coming with a sticker price of 150,000-250,000 yuan (US$20,600-34,330), this vehicle will be the most affordable model in Huawei鈥檚 Harmony Intelligent Mobility Alliance line-up.

Huawei engineers reportedly have been deployed to a SAIC research and development center in suburban Shanghai to work on the cockpit and driving assistance system for the new car.

鈥楾hank you, great Huawei鈥�

Whether Shangjie can sustain the strong momentum seen in other Huawei alliances remains to be seen. But if experience is any guide, Huawei鈥檚 brand recognition and tech prowess have helped numerous smaller automakers rise to prominence.

In previous media stories, some pundits have hailed Huawei collaborative model as an 鈥渁ircraft carrier鈥� in the country鈥檚 sprawling electric car industry. They credit it with elevating obscure, 鈥渦nderdog鈥� automakers to unprecedented heights.

Take Seres, for example. Before joining forces with Huawei, the company primarily known for making vans was racking up losses of 3.3 billion yuan from 2018 to 2020.

After joining Huawei on the Aito project, Seres revived its fortunes, reporting a net profit of 1.63 billion yuan in the first half of 2024. At one point, its market value even rocketed to 150 billion yuan.

This rags-to-riches story was so dramatic that Seres鈥� President He Liyang publicly thanked Huawei during the April 2024 launch of the new Aito M5 model, stating in a somewhat obsequious tone: 鈥淭hank you, great Huawei.鈥�

It鈥檚 clear that partnering with Huawei has helped many lesser-known brands gain an unexpected premium, propelling them into the luxury car segment.

A ranking released by Yiche.cn, a car news app, reveals that in October, Huawei collaborative models topped the list of top 10 car brands in China with an average transaction price of 383,000 yuan, 7,000 yuan higher than second-place Mercedes-Benz.

History often repeats itself, but the players on stage are not always the same.

About 40 years ago, SAIC made history by becoming the first company to bring foreign marques into China as part of its joint venture with Volkswagen.

This time around, it is banking on a homegrown tech giant to rejuvenate its ailing business and help it rise back to the top of the value chain.

Huawei, China鈥檚 answer to Bosch?

Back in 2021, when then SAIC Chairman Chen Hong told a shareholder meeting that relying on a third-party like Huawei for developing an entire vehicle would be tantamount to the company鈥檚 selling its 鈥渟oul,鈥� Richard Yu, chairman of Huawei鈥檚 smart auto subsidiary, surprisingly refrained from comment.

His silence was telling. Yu earned the nickname 鈥淏ig Cannon Yu鈥� within the industry for his outspokenness.

By 2024, a full-fledged Huawei had grown powerful enough to dictate the terms of its expanding partnership network, choosing whom to collaborate with.

鈥淢any manufacturers are eager to cooperate with Huawei, but due to limited resources, we can only work with four companies for now, creating four flagship smart vehicles,鈥� Yu said at a forum last June.

Despite his brashness, he himself may not have foreseen the precipitous ascent of Huawei鈥檚 auto business in less than a decade.

But as early as 2019, some analysts already began to suggest that Huawei had the ambitions to become China鈥檚 equivalent of German giant Bosch.

Founded in 1886, Bosch is widely regarded as the largest Tier-1 supplier in the global auto industry. Despite shrinking market share due to competition, it remains the revenue leader.

According to industry data submitted by global auto parts suppliers, Bosch reported US$55.89 billion in revenue in 2024, way ahead of second-placed ZF鈥檚 US$49.71 billion and Canada鈥檚 Magna, which came in third at US$42.79 billion.

In the meantime, Huawei posted revenue of 10.4 billion yuan in the first half of 2024. Even if it meets the forecasted growth of another 10 billion yuan in the second half, its total revenue for 2024 would still be equal to less than 5 percent of Bosch鈥檚.

This makes any attempt to mention the two in the same breath, at least for now, sound a bit ridiculous.

However, as Huawei continues to expand its network, and as more automakers 鈥� whether private, state-owned or joint ventures 鈥� adopt its technology, the gap between the two is expected to narrow.

For example, Audi鈥檚 new A5L sedan, which is available in two versions and built in conjunction with Chinese automakers FAW and SAIC, features Huawei鈥檚 cockpit and intelligent driving systems.

Amid a shift toward new-energy vehicles and smart technologies, Huawei鈥檚 autonomous driving business is poised for faster growth, enabling it to close in on market incumbents.

A marathon with no clear winner

But even as it is edging closer to its 2019 vision of becoming the enabler of China鈥檚 smart vehicles, it is too soon to predict Huawei will win the race.

In the auto industry, market leadership is not guaranteed. It can be won and lost very quickly. Competition between domestic carmakers is fierce and occasionally gets nasty. What some refer to as a race may well turn out to be a marathon.

As a new kid on the block, Huawei has yet to acquit itself in tests like reliability, driving pleasure, user satisfaction and brand prestige. Technology is just one facet of success but not the whole picture.

None of this Bosch comparison is SAIC鈥檚 immediate concern, of course. Fixated on navigating the tough times ahead, the state-run automaker can only hope that Huawei will help it turn things around.

More symbolically, and decisively, SAIC may have just helped other companies still on the fence decide to jump off.

The author, a former Shanghai Daily opinion writer, now works as a business analyst and communication strategist. He has no conflict of interests to declare.