China's Premium Auto Brands Diverge: Private Firms Outperform State-Owned Counterparts

Sales data for the first half of 2024 reveals a clear divergence among China’s premium automotive brands. Private automakers such as Zeekr and NIO have achieved simultaneous growth in both sales volume and pricing, while state-owned enterprises’ premium brands—including Avatr and IM Motors—have fallen short of sales expectations. Chinese domestic brands have been striving to break into the premium market for nearly two decades, broadly progressing through three phases: Around 2010, they attempted to launch high-priced models like Geely’s Emgrand EC8 and SAIC’s Roewe 950, but most failed due to limitations in core technologies, manufacturing capabilities, and brand equity. Starting in 2016, companies shifted toward establishing independent premium brands; Geely’s Lynk & Co and Great Wall’s WEY found moderate success in the RMB 150,000–250,000 price range, while Chery’s Qoros was eventually sold off and its Exeed brand struggled with low sales. During this period, new entrants like NIO and Li Auto entered the market and gradually secured their foothold. From 2020 to the present, electrification has become the main battleground for premiumization, with “national team” brands such as Dongfeng’s Voyah and SAIC’s IM Motors joining the EV race. However, their overall performance has lagged behind that of private-sector players, including NIO, Li Auto, Zeekr, Seres’ Aito, and Xiaomi’s SU7, all of which have received strong market responses. As of the first half of 2024, apart from Hongqi (Red Flag), most state-owned premium brands have underperformed relative to expectations, widening the gap with their private-sector counterparts. Under pressure, some state-owned automakers have resorted to price cuts or relied heavily on external technology partnerships (e.g., with Huawei)—strategies that risk diluting their premium brand positioning. In contrast, private automakers are typically founder-led, benefit from agile decision-making structures, and have already weathered critical survival challenges.