China’s Rising Luxury Car Brand Challenges German Automakers
In less than four years, Seres Group, once known for its affordable minivans, has become China’s top luxury car seller, surpassing established brands like BMW and Mercedes. This rapid rise is attributed to its partnership with Huawei Technologies in 2021 to launch the Aito brand of premium electric and hybrid SUVs.
The Aito M9, launched in late 2023, became China’s best-selling luxury SUV in 2024 with around 151,000 units delivered. Its success is attributed to features like Huawei’s Harmony operating system, a triple-screen dashboard, and luxurious amenities such as a dual-zone refrigerator. The base model starts at 509,800 RMB ($70,712).
Seres Chairman Zhang Xinghai stated that Aito is ‘reshaping the luxury car market in China’ by catering to evolving consumer preferences. The brand’s success demonstrates how Chinese luxury car tastes are shifting and how non-traditional manufacturers can effectively compete in the premium segment.
Challenges in a Competitive Market
Despite its success, Seres faces challenges including a 23% decline in China’s luxury car market in 2024 due to economic slowdown and weak consumer sentiment. The company also slumped 42% in Q1 sales.
A unique challenge lies in its partnership with Huawei, which is also collaborating with other manufacturers, potentially leading to brand homogenization. However, Richard Yu of Huawei remains optimistic, stating that they are committed to making all their automotive partnerships successful.
The rise of Aito highlights the changing dynamics in the Chinese luxury automotive market and the growing influence of domestic technology companies in the EV sector.
