Source | Yuan Auto

As of August 31 this year, Qiu Xiandong, Chairman of FAW Group, will have completed his three-year tenure.

When considering the notable transformations at FAW Group over the past three years, from an external viewpoint, one significant change is the substantial increase in large-scale strategic investments amounting to billions of yuan. For instance, in November 2025, Zhuoyu announced it had secured a strategic investment exceeding RMB 3.6 billion from FAW. Approximately a month later, FAW declared its intention to invest RMB 3.744 billion to subscribe for additional shares issued by Leapmotor.

When combined with the strategic capital injection into FAW Besturn, as disclosed by the Beijing Equity Exchange in September 2025, FAW's total investment in the second year following Qiu Xiandong's appointment as chairman has surpassed RMB 10 billion. This level of investment is remarkable even within the context of FAW's 73-year history.

For context, notable investments exceeding RMB 1 billion by FAW Group prior to 2023 include, but are not limited to, the 2022 joint venture with Audi to establish Audi FAW New Energy Vehicle Co., Ltd., which involves a total investment of RMB 35 billion in its first dedicated battery electric vehicle factory project; the 2020 investment of RMB 4 billion to co-establish T3 Technology with Dongfeng, Changan, and others; and the 2019 subscription of RMB 980 million to form a joint venture with CATL known as Contemporary FAW.

Focusing on FAW's strategic investments in Zhuoyu and Leapmotor, the market generally viewed these moves optimistically at the time. On one hand, Zhuoyu could help FAW's new energy vehicles (NEVs) and even fuel-powered vehicles avoid criticism regarding their assisted driving capabilities. On the other hand, Leapmotor could assist FAW in efficiently developing more NEVs and forge a strong alliance with FAW at the brand level.

However, while the vision was promising, reality often presents challenges. As these two strategic collaborations approach their one-year milestone, it appears that FAW is still primarily awaiting a return on its investments.

01 Did RMB 3.6 Billion Just Secure an Additional Option?

Let's begin with Zhuoyu.

According to the Tianyancha app, Zhuoyu, previously known as DJI Automotive, was once a leading supplier of assisted driving solutions, on par with Horizon Robotics, Huawei, and Momenta, collectively referred to as the "Four Horsemen" in the industry. Prior to receiving the RMB 3.6 billion strategic investment from FAW, Zhuoyu was already a key player in accelerating the intelligent transformation of FAW's affiliated automakers.

For instance, FAW-Volkswagen launched major new fuel-powered models in 2025, such as the all-new Magotan, Tayron L, and Sagitar L, all equipped with IQ.Pilot enhanced driving assistance functions based on Zhuoyu's technology.

In addition to FAW-Volkswagen, FAW Hongqi also incorporates a significant amount of "Zhuoyu technology." The strategic pure electric model Hongqi Tiangong 08, launched by FAW Hongqi in January 2025, is equipped with Hongqi Sinan Intelligent Driving, developed based on Zhuoyu's platform. Subsequent new models like the Tiangong 05 and Tiangong 06 also continue to utilize this intelligent driving solution.

However, many of the "FAW × Zhuoyu" collaboration models that emerged in 2025 have generated more hype than actual sales, particularly the new models in FAW Hongqi's Tiangong series.

According to third-party retail data from the China Association of Automobile Manufacturers and the China Passenger Car Association, the monthly sales of the Tiangong 05, Tiangong 06, and Tiangong 08 models have consistently remained in the triple digits since their launches. The latter two models even occasionally experienced double-digit monthly sales in 2026. The combined sales of the three models over nearly two years since their launch have not exceeded 15,000 units.

Whether this figure represents the total sales of the Hongqi Tiangong series is yet to be confirmed, as FAW Hongqi has not released official sales data for its new models for an extended period, let alone specific performance figures for the Tiangong series.

As for FAW-Volkswagen, while some models equipped with IQ.Pilot, such as the all-new Magotan, Tayron L, and Sagitar L, remain top sellers, it is still challenging to reverse the overall downward trend in brand sales. Additionally, it is noteworthy that the assisted driving system in FAW-Volkswagen's most significant new pure electric model this year, the ID.AURA T6, is no longer linked to Zhuoyu but instead utilizes a hardware and software solution from Corepower (a joint venture between Volkswagen and Horizon Robotics).

Perhaps, without significantly boosting the sales of new models under FAW Group, Zhuoyu, despite receiving a substantial RMB 3.6 billion investment from FAW, remains merely one of the options for FAW's intelligent transformation partners.

It is worth mentioning that FAW Hongqi's first "boxy" off-road vehicle, the G919, as well as multiple models under FAW Jiefang, including heavy trucks, are planned to be equipped with Zhuoyu's assisted driving solutions and are expected to be launched in the second half of this year.

02 Anticipating Leapmotor's Role in Taking Hongqi Overseas

Compared to the collaboration with Zhuoyu, the partnership between FAW and Leapmotor appears more promising at this stage.

"The Hongqi Global SUV is positioned as a globally aesthetic, intelligent, and enjoyable pure electric SUV, strictly adhering to global safety standards. The new model is planned to enter the Hong Kong market in the fourth quarter of 2026," FAW Hongqi stated in a June post about its participation in the Hong Kong Auto Show.

The so-called Hongqi Global SUV is the first model resulting from the collaboration between FAW and Leapmotor, corresponding to the previously internally codenamed "G117." According to public information, this new model is built on Leapmotor's pure electric platform and is positioned similarly to Leapmotor's compact SUV, the B10, within Leapmotor's product lineup. It is intended for urban commuting scenarios.

If the overseas market can perceive the Hongqi Global SUV as a luxury derivative of the Leapmotor B10, perhaps FAW Hongqi, and even FAW as a whole, will have found an invaluable springboard for overseas expansion.

Because the Leapmotor B10 is incredibly popular in overseas markets.

Data indicates that since its launch and delivery at the 2025 Munich Motor Show, the Leapmotor B10 has swiftly become Leapmotor's top seller overseas, entering more than 35 countries across Europe, South America, the Middle East, and Asia-Pacific regions. In terms of sales, nearly 20,000 new units of the Leapmotor B10 were sold in the first half of 2026, securing the championship in the compact pure electric SUV segment in Italy for six consecutive months.

It is noteworthy that the sales of the Leapmotor B10 in Italy are primarily driven by private users. In other words, the title of the top-selling compact pure electric SUV for the Leapmotor B10 is not achieved through ride-hailing services or corporate procurement.

With the established market foundation of the Leapmotor B10 and the backing of the Hongqi Global SUV by China's luxury automotive brand, which is rich in stories, this represents a unique advantage in the market. Furthermore, the overseas price range of RMB 29,900–33,400 for the Leapmotor B10 also leaves ample room for pricing the Hongqi Global SUV.

In terms of return on investment, the Hongqi Global SUV alone may be sufficient to recoup FAW's investment of over RMB 3.7 billion in Leapmotor. Moreover, this is just a small part of their collaboration. There are reports that Leapmotor will also procure engines from FAW for use in its new models.

It is expected that the cooperation between FAW and Leapmotor will evolve in a direction where "1+1>2."

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