Objectives: This study aims to examine the impact of Sun Tzu’s Art of War Five Virtues Leadership on innovation and the efficiency of the Chinese brand passenger vehicle industry, explore the role of innovation in enhancing industry efficiency, and propose strategies for leveraging the Five Virtues Leadership to improve operational performance and competitiveness in the sector. Methodology: A mixed research method using quantitative research (questionnaire survey) as the main method and qualitative research (in-depth interview) as the auxiliary method. Result: Quantitative and qualitative research results confirm the positive correlation between the Five Virtues Leadership, innovation, and the efficiency of Chinese brand passenger vehicle companies. And through effective data analysis, it explains the importance of the five virtues of leadership in traditional Chinese culture. Further understanding of the effectiveness and competitiveness of China’s passenger car brands, with leadership references. Conclusion: Five Virtues Leadership can foster a favorable environment for innovation, enhance time utilization, optimize resource allocation, and strengthen brand image. By developing and validating a measurement for Five Virtues Leadership, this study enhances the understanding of its role and significance in modern management, paving the way for future research.