Shulou(Shulou.com)11/24 Report--

The model of Huawei's car business is slowly changing.

"Huawei does not build cars, but should help enterprises build good cars." this has always been a clear strategic direction for Huawei. Although it does not directly "build cars", Huawei has summed up three routes and cut into the auto market. How is Huawei's performance in entering the auto market? Are these three roads going smoothly?

There are three ways for Huawei to build cars. There are three main car-building models launched by Huawei:

The first is Huawei's smart selection model, which will be fully responsible for the design, R & D and production of the entire car, which is also similar to the traditional car manufacturing model, except that Huawei adopts a light asset car-building model, which saves a lot of car-making costs.

The second is Huawei's HI (Huawei Inside) model, which strengthens the "HI" (Huawei Inside) brand, develops jointly with auto companies, provides Huawei full-stack smart car solutions, and becomes an important partner of domestic automakers.

The third is the parts TIer 1 model, which is similar to traditional parts suppliers and provides standardized products.

Among the three models, HI mode and smart selection model Huawei have varying degrees of participation, in which the HI model is dominated by car companies, Huawei only provides relevant technologies and solutions, the final experience of the product is the responsibility of the car factory, and the smart selection model Huawei is more involved in the product design and experience, and is responsible for the whole vehicle.

From the perspective of market feedback, the transcripts of the two car-building models proposed by Huawei are very different.

Because of Huawei's high participation, the smart selection cooperation model between Huawei and Cyrus has attracted the most attention in the industry. from the development in recent years, the smart selection model is the best of the three models.

Take the delivery performance of the AITO boundary in 2022 as an example, in the year of incomplete delivery, the delivery volume of the two models exceeded 70,000, and in October 2022, the AITO boundary set a record delivery record of 12018 vehicles. It has created the record of the fastest growth of the new brand of the intelligent electric vehicle track.

By contrast, the performance of Huawei's HI model is not satisfactory. Huawei has successively announced that it has established deep cooperation with BAIC, Changan, Guangzhou Auto and other companies. BAIC's high-end new energy brand ARCFOX Polar Fox has become the first car brand with Huawei HI full-stack smart car solution.

Despite the blessing of Huawei's key technologies, sales are very weak. In 2022, the annual delivery volume of BAIC polar fox has not exceeded 12000.

In addition, Huawei also reported recent personnel changes, Huawei BUCOO, intelligent driving solutions product line president Wang Jun has been suspended, speculation may be related to Huawei HI model business progress is not going well. In early 2022, when Wang Jun was asked about the profit forecast of the HI model in an interview, he admitted that "hundreds of millions or even billions of yuan need to be invested every year. At present, it is still a loss, and it is difficult to make a profit in the short term."

What are the problems faced by the three car-building modes? After the development in recent years, several very different and interrelated car-building models are also facing some challenges.

When Huawei first entered the auto business, it positioned itself as a supplier and became "the Bosch of the auto industry". Recently, Yu Chengdong, BU CEO of Huawei's smart car solution, expressed different views in an interview with China Finance and Economics.

"We used to do parts model, want to become Bosch, mainland, it is to do standardized parts, this is not possible." Yu Chengdong said.

Sun Yongjie, the master of tricks, told TechWeb that the so-called parts model, from Huawei Yu Chengdong's answer in a recent interview that it could not become Bosch in the automobile industry, can be considered that this model is basically not the focus of Huawei, nor does it basically reflect Huawei's core competitiveness in car building.

In fact, from the perspective of development in recent years, Huawei's parts model has not formed a scale effect, because the magnitude of partners is not enough, shipments are also very low, resulting in cost pressure, unable to compete with Bosch, the leading company in the industry.

As for the Hi model, judging from the recent resignation of the head of Huawei in charge of the model, the progress should not be very satisfactory.

Sun Yongjie pointed out that Alpha sales in cooperation with Jihu are poor, and both sides may not be satisfied with each other.

Judging from the current cooperative Hi model, Huawei's advantages are mainly reflected in the intelligent cockpit and intelligent driving, that is, the intelligence of electric vehicles, while the cooperation with Jihu is not ideal. In fact, from one aspect, Huawei has exposed that Huawei is not outstanding in terms of differentiation or experience compared with other manufacturers that provide relevant solutions in terms of car intelligence. at the same time, it also explains why Huawei focuses on smart mode. On the one hand, the so-called deep participation can give the outside world the feeling that the car is made by Huawei, which is more conducive to giving play to the effect of its brand.

Second, we can make use of Huawei's existing channels (for example, a large number of stores and direct stores laid for previous mobile phones), while promoting, it can also enable the channel side to make a profit from selling cars, in order to ensure the stability of the previous channels (otherwise some channels are likely to be closed down if they are unprofitable). Can be said to kill two birds with one stone.

Finally, there is deep participation, and we can also take Huawei's previous design advantages in consumer terminals as a selling point. After all, in the eyes of users, compared with traditional car companies, Huawei's design ability is still strong. "Sun Yongjie said.

Ding Shaojiang, a technology industry analyst and founder of nail technology, told TechWeb that there are two main reasons why the Hi model is not as good as the smart selection model, one is that the ability of the cooperative car companies is not high, and the other is that Huawei's own resources are not as large as the latter.

"the HI model introduces Huawei's full-stack automobile solution, and he has relatively high requirements for the products, design and quality control of the cooperative car companies. Only when combined with Huawei's technical capabilities can we achieve good results. In addition, Huawei itself does not invest as much energy and resources as the smart selection model."

"the car companies at the head of the industry may also be reluctant to adopt the HI model to cooperate with Huawei, and they are more willing to develop independently. Relatively weak car companies are restricted by their own product marketing ability, and it is helpful to transform market sales through cooperation with Huawei, but it is difficult to make a big breakthrough. this may be the inherent model problem of the HI model." Major General Ding added.

The last wise selection model, from the current sales volume, should have achieved certain results, but in view of this effective model, it is the increase of the loss of the well-off shares of the partner.

Sun Yongjie believes that although Yu Chengdong said in an interview with the media that with the improvement of future sales, the car factory will certainly make a profit, or even a very good profit, but judging from its break-even line of annual sales of 1 million vehicles, it is difficult to achieve with well-off shares alone. on the contrary, it will allow car factories to fall into the imbalance between production capacity, production line construction and sales, and the possibility of sustained losses is much higher than the dilemma of profits.

How to attract more powerful partners and how to balance the interests of each partner will affect the future of Huawei's car business. The model of Huawei's car business is still being optimized.

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