Recently, Baojun, a brand under SAIC-GM-Wuling, announced plans to introduce a novel SUV equipped with Huawei's advanced ADS intelligent driving solution and lidar technology.

This SUV is anticipated to enter the market by year's end, priced competitively between 150,000 and 250,000 yuan.

This marks a significant breakthrough, as Huawei's intelligent driving technology will now be accessible at the 150,000-yuan price point, and Baojun will unveil its most premium model to date.

This partnership represents Huawei's first collaboration with Baojun and its foray into the sub-200,000 yuan vehicle segment with intelligent assisted driving technology.

Baojun Seeks Revival with Huawei's Expertise

Baojun once enjoyed remarkable success, achieving annual sales of one million units in 2017 with models like the Baojun 510 and 730. However, in the face of the surge in intelligent and electric vehicles, Baojun has struggled to keep pace.

Outdated engine technology and slow progress in intelligence, coupled with a gearbox recall incident, have tarnished its brand reputation. In 2024, sales plummeted to around 44,000 units, a staggering 90% drop from its peak, leaving the brand in a precarious position.

By teaming up with Huawei, Baojun aims to leverage Huawei's "high-end intelligent driving" reputation to break the current stalemate and shed its "low-cost" image.

Huawei Expands Its Reach

Huawei's intelligent assisted driving solutions were previously confined to the premium market, primarily vehicles priced above 300,000 yuan, with a cost of 20,000 to 30,000 yuan per set.

This collaboration with Baojun signifies Huawei's ambition to expand its intelligent assisted driving technology into the 200,000-yuan market, potentially positioning itself as one of the most affordable options for this technology.

For Huawei, this represents a golden opportunity to validate the pricing potential of its intelligent driving technology in the lower-tier market, fostering a more comprehensive product portfolio that spans from entry-level to luxury vehicles.

Challenges Ahead for the Partnership

While Huawei aims to validate its pricing strategy in the lower-tier market, and Baojun seeks to transform its brand image, this partnership is not without its risks.

The cost of Huawei's intelligent driving solution, ranging from 20,000 to 30,000 yuan per set, accounts for over 10% of the vehicle's selling price, compressing profit margins. Additionally, consumers' ingrained perception of Baojun as a low-cost brand casts uncertainty over the market acceptance of the new high-priced model.

This bold move comes with an uncertain outcome, making it a risky bet for both parties involved.