Why “exclusive franchise” is the choice of the times

文：李浩

“Wenjie Brand Exclusive Franchise” has recently sparked heated discussions online. Some people speculate about changes in cooperation, and some are worried about user rights. But zooming out, you will find that the discussion on this matter actually touches on a larger proposition: when China’s auto market moves from first-time purchases to replacement purchases, what do high-end brands rely on to retain users?

Five years ago, Cyrus and Huawei jointly launched the Wenjie brand, pioneering cross-border cooperation between the automotive industry and the ICT industry.

In the past five years, Cyrus and Huawei have been highly focused and in-depth co-creation. Without any existing model to learn from, they jointly created an innovative business model of cross-border integration. They wholeheartedly transformed the industry from 0 to 1, forming today’s high-end brand, millions of users and system foundation, which fully proves the value of the cooperation model.

So why do you want to be an exclusive franchise? In the latest round of interviews, Kang Bo, director and vice president of Thalys Group, further explained the purpose of Wenjie’s adjustment to an exclusive franchise model. Kang Bo said: “Wenjie has entered a new stage of millions of users and high-end brands, which has put forward higher requirements for the refinement and differentiation of brand management.” Kang Bo particularly mentioned that high-end luxury users need an exclusive sense of nobility and brand belonging.

One of the benefits of exclusive franchise is to highlight differentiation. Only differentiation can lead to high-end products.

Compared with when the industry was first established, the structure of China’s auto market has changed today. The importance of first-time purchase demand gradually decreased, and additional purchases and replacement purchases began to bear more sales; at the same time, the demand for high-end models did not cool down simultaneously.

When repurchasing consumers make a new choice with the experience of their previous car, factors other than technical parameters, such as product positioning, after-sales service, and brand identity, also begin to become brand assets that can span the product cycle.

Therefore, exclusive franchise is not only an adjustment at the operational level, but also a choice in this era.

Hard currency in the “trade-up era”

If we turn the time back to five years ago, Wenjie was facing a completely different market at that time.

According to data from the Ministry of Industry and Information Technology, new energy vehicle sales reached 3.521 million units in 2021, a year-on-year increase of 1.6 times. However, high growth often means a low base, and the penetration rate of new energy vehicles is only 13.4%.

For OEMs, in the market environment at that stage, the path for business growth was very clear.

Fuel vehicles are being replaced by new energy sources. Subsidies, purchase tax exemptions, and license plate policies in some cities continue to lower the purchase threshold. Coupled with the still strong first-time purchase demand, the new car market is rapidly expanding. As long as products can catch up with this round of substitution and channels can deliver cars to consumers, new users will be enough to support sales growth.

Five years later, China’s new energy market has become even bigger.

By 2026, new energy will still maintain absolute dominance even when the total market volume is under pressure. In August this year, the retail sales of new energy vehicles reached 1.005 million units, with the penetration rate rising to 65.2%, a record high.

However, compared with five years ago, the domestic automobile market has undergone structural changes, and the importance of the first purchase is gradually fading.

In August this year, when the China Automobile Dealers Association analyzed the passenger car market, it directly listed “trade-up demand squeezing first-time purchase demand” as one of the main characteristics of the market. At the same time, demand for B-class and above high-end models is still strong, and “consumption upgrades and consumption downgrades and exits coexist.”

This means that consumers’ past car experience will directly enter the next round of decision-making, but the existing brand relationship will not automatically continue.

(Consumer brand loyalty in various countries, source: Boston Consulting, “What Car Buyers Want: A Global Guide for Automotive OEMs”)

According to the report “2025 Global Automotive Consumer Study” released by Deloitte, 76% of respondents in China said they plan to change to a different brand next time they buy a car.

Similarly, the Autohome Research Institute has tracked replacement users for three consecutive years and found that in the first half of 2025, the replacement intention loyalty of a single brand has been less than 10% and is still declining. Even for automobile groups that cater to different needs through multiple sub-brands, most internal customer retention rates can only be maintained at around 20%.

Therefore, in the current era of redemption, brand recognition has become hard currency.

Whether the product experience and service capabilities that have been accumulated before can continue to be converted into purchase intentions many years later also determine whether brand equity can span the product cycle.

High-end brands need their own business

In fact, Toyota had already encountered similar problems in the 1980s.

In order to meet the needs of high-end users, Toyota promoted Lexus to enter the US luxury car market. From the beginning, Lexus was put into an independent system. Independent brands, independent dealers, and sales and service systems specifically designed for luxury car consumers were established almost simultaneously with new cars. Relying on this exclusive franchise model, Lexus quickly achieved market success after officially entering the US market.

Volkswagen later made similar adjustments to Audi.

In 1993, the Volkswagen Group returned Audi sales responsibility to Ingolstadt; in 1995, it further strengthened the brand differentiation between Volkswagen and Audi. Since then, Audi’s product marketing and sales system began to be designed independently in accordance with high-end brand positioning. After 1997, Audi successively established Audi Center to extend its brand independence to terminal stores.

Looking at the development history of global automobile brands, we can see a pattern: the more high-end the products become, the more independent the brand management becomes.

The higher the price of a car goes up, the harder it is for competition to stay on the configuration list. The product awareness, channel experience and after-sales evaluation formed by one car purchase will continue to be carried into the next rotation of purchases; whether these experiences can be accumulated into brand assets will ultimately determine whether old users are willing to stay in the same product system.

Establishing a sense of identity for high-end brands is now also a question that Chinese companies, including Cyrus, need to face.

Choice after five years

For Thalys, the starting point of this problem is precisely based on an extremely efficient sharing system.

According to the latest disclosure from Cyrus, Wenjie has entered the stage of one million users; its existing products extend from M5, M6, M7, M8 to M9, and it plans to continue to add sedans and MPVs in the future. Around these products, sales, delivery, after-sales, charging and user communities have also formed a system covering the complete vehicle life cycle.

What’s more, brand recognition has an increasing impact on sales.

According to the “Research Report on Wenjie M8 User Portraits and Car Purchase Journeys” released this year by the Electric Vehicle Users Alliance, first-time purchasers only accounted for 26%, while additional purchasers and replacement purchasers reached 39% and 35% respectively.

As for the more expensive M9, a survey of 124 first-time owners of the new-generation M9 by Jielan Road in July this year showed that 46% were additional purchases, 49% were trade-ins, and only 5% were first purchases; among them, 59% of the trade-up users originally used traditional luxury brands.

In other words, most users of the higher-priced M8 and M9 are no longer first-time car buyers. A higher budget, past experience with luxury cars, and already formed product and service judgments will all enter into the next car purchase decision.

One of the current favorable conditions is that Wenjie’s product lines have covered multiple mainstream price ranges, and users can find new products under the same brand.

From the M5, M6, and M7 to the M8 and M9, Wenjie has formed an SUV product line covering different price ranges. At the same time, according to the currently disclosed plan, cars and MPVs will continue to be added. If SUV users have demand for cars or MPVs in the future, they will also have the opportunity to continue to stay in the industry system.

That’s what exclusives are all about.

On September 20, Yinwang Intelligent issued a statement on Weibo saying: “Yinwang will continue to support the development of Haowenjie and work with Wenjie to ensure user services and experience.” Yinwang will continue to supply solutions such as Qiankun Smart Driving and Hongmeng Cockpit to Sailis, and technical support and subsequent upgrades will not stop. Xu Qinsong, President of Huawei Terminal China, also made it clear in an internal speech that the world is still within the Hongmeng Intelligent System.

Exclusive franchise is not a separation of cooperation, but another model innovation based on the cross-border integration between Cyrus and Huawei. Through exclusive channels, exclusive service teams, and exclusive brand operations, we will deepen and deepen the high-end brand value that has been formed, making brand delivery purer and more accurate.

As Zhang Xinghai, chairman (founder) of Cyrus Group, said at the 2026 semi-annual performance briefing on September 22, the exclusive franchise model that meets users’ demand for “pure, focused, exclusive services throughout the entire life cycle” is Cyrus’s ability to ultimately transform brand loyalty into sales.

Five years ago, faced with the question of “soul theory,” Sailis still chose to achieve success in the world in a way that seemed radical at the time. Five years later, the auto market has moved from incremental growth to stock, and the industry has made a bold turn, which reflects the strategic vision of Thalys management.