Update: Added the content of SAIC's announcement.
The R brand will focus on the RMB 200,000-400,000 price range, while IM Motors will focus on the RMB 400,000+ market.
SAIC, which already owns high-end electric vehicle company IM Motors, is setting up a new company to run its more affordable R brand electric vehicle business.
SAIC will set up Rising Auto and the R brand, which was formerly under SAIC Passenger Vehicle, will be run by it, the company said in a statement today.
SAIC has announced on October 27 that Wu Bing, CEO of the company's mobility services company SAIC Mobility, has become CEO of Rising Auto.
Rising Auto and IM Motors have a relationship like that of Audi and Porsche and the two brands will work together to help SAIC gain market share in the electric vehicle segment.
IM Motors is an electric vehicle brand jointly invested by SAIC Group, Zhangjiang Hi-Tech and Alibaba, and has developed the IM AD autonomous driving system in partnership with autonomous driving company Momenta.
The IM L7 was available for pre-order during the Shanghai Auto Show in April, and at the end of April, IM Motors announced a pre-order price of RMB 408,800 ($62,800) for the L7.
Rising Auto's registered capital is RMB 7 billion, slightly less than IM Motors' RMB 10 billion. SAIC will contribute RMB 6.65 billion, accounting for 95 percent of the shares; the employee stock ownership platform will contribute RMB 350 million, accounting for 5 percent of the shares.
R brand will focus on the RMB 200,000-400,000 price range, while IM Motors will focus on the market above RMB 400,000, local media report said.
This approach is similar to NIO, except that NIO is preparing to enter the mass market with a new brand only after first achieving some success in the high-end market.
NIO announced in early August that it would enter the mass market through a new brand, and preparations for this have been accelerated and a core team has been established.
"The NIO brand has a similar relationship to this new brand as Lexus has to Toyota, and Audi has to Volkswagen," William Li, NIO's founder, chairman and CEO, said on the company's second quarterly call.
Li said the VW brand NIO will launch hopes to be lower in price than Tesla, but the experience will surpass the latter.