With only 11 days left until 2022, I thought that after the Guangzhou Auto Show, the automotive industry began to enter the final stage, and all car companies began to calm down and plan for the next year. However, unexpectedly, in the past week, we have seen a number of new car companies emerge, including Binli Automobile, founded by Su Mingwei, former global executive vice president of Volkswagen Group, and NiuXin Energy, founded by Li Yinan, founder of Maverick Electric.
Although the above-mentioned new force car companies have successfully attracted the attention of all parties, combined with all the new force car companies that have entered the car manufacturing sequence in 2021, the popularity of xiaomi car manufacturing has almost run through the entire 2021. In this regard, many readers or peers have also analyzed with the cylinder brother, why does the popularity of Xiaomi car construction last for a long time? On this issue, Brother Cylinder believes that behind this is more related to the business thinking of Xiaomi founder Lei Jun.
Bargaining power, you have to tie it into your own hands!
With the development of new energy vehicles, we have heard several words such as "cost", "supply chain", "homogenization" and so on. As we all know, the competition of the next generation of automotive products is not limited to the "luxury interior" and so on, but has penetrated into the high computing chip and the corresponding computing platform. On this basis, how to build a set of software systems and ecology will determine the key to the degree of intelligence of the car. In contrast, core technologies such as batteries, motors, and electronic controls, the differences between major car companies in this regard are constantly narrowing. Therefore, how to strengthen their own intelligent attributes, in order to attract consumption has become the focus of new power car companies and established traditional car companies.
In fact, although strengthening the intelligent attributes of automotive products is one of the technical problems that all car companies have to face, in most cases, how to effectively reduce costs is also a difficult problem for car companies to avoid. On the issue of cost, we can analyze the cost of spare parts in the traditional automotive industry.
Remember that in 2019, the Bosch Group, the world's largest auto parts supplier, announced its 2018 annual financial report, showing that the revenue of Bosch Automotive Division was 47 billion euros, and the EBIT was 3.32 billion euros. Perhaps many people have no concept of this profit figure. For example, Audi, for example, only achieved revenue of 45.5 billion euros after delivering 1.86 million complete vehicles and more than 700,000 powertrains, and its EBIT was almost similar to that of Bosch Automotive. Combined with the data, it is not difficult to find that the revenue and profit of a luxury car brand with annual sales of nearly 2 million units are comparable to the revenue of the Bosch Group's automotive business, which is hard to believe.
In fact, Tier 1 auto parts suppliers, led by the Bosch Group, distribute more than 40% of the cake from the automotive market by producing 20% of the parts. Taking the cost structure of Audi A6L as an example, the cost of imported spare parts accounts for 41%. After careful investigation, it can be found that the most expensive parts of spare parts, such as sensors, controllers, AC motors, ESP device safety systems and other industry standard configurations, most of them come from the Bosch Group. It should be noted that in the sensor department of Bosch Group as an example, its products have the characteristics of wide coverage, high accuracy and strong stability, so it has laid a hegemonic position in the field of Sensor for Bosch, giving it a strong bargaining power, and few car companies can refuse to cooperate with it.
Similarly, although the current stage has begun to gradually enter the era of intelligent electric vehicles, the position of Tier 1 suppliers in the automotive market has always been difficult to shake, the only difference may be the difference in spare parts products, from the previous mechanical structure to today's lidar and other technology higher gold content of spare parts. In other words, at this stage, if any car company can build a perfect supply chain system, it will successfully grasp the bargaining power of spare parts in the next development, lay a more solid foundation, and gain consumer recognition with more cost-effective products.
Copy the Xiaomi phone strategy!
Regarding Xiaomi's products, there may be many readers who stay in the stage of Xiaomi mobile phones. However, from the perspective of Xiaomi's previous investment path, in addition to Xiaomi mobile phones, Xiaomi's product matrix also revolves around the layout of C-end products, creating a closed ecological environment through the model of "investment + incubation" and forming a synergistic effect. Maybe when it comes to synergies, people may not understand it. In layman's terms, the synergy effect is to form the effect of "1+1>2".
It is understood that at present, there are two main investment forces within the Xiaomi Group, one is the internal strategic investment fund, and the other is the Xiaomi Yangtze River Industry Fund, which is jointly initiated with the Yangtze River Industry Fund. Among them, the investment direction of Xiaomi's strategic investment is mainly based on the Internet of Things and AloT products, and the Xiaomi Yangtze River Industry Fund mainly invests in Xiaomi-related manufacturing upstream technology and core components. Through horizontal investment in the ecological chain and vertical investment in the industry, Xiaomi has successfully gained leading software and hardware development, manufacturing capabilities and supply chain advantages.
Combined with Xiaomi's industrial chain companies outside the automotive field, as of the end of 2020, Xiaomi has invested in more than 310 ecological chain partners, covering smart homes, smart home appliances, travel vehicles and other fields. In 2020, Xiaomi's loT field and consumer products achieved revenue of 67.4 billion yuan, accounting for 27.4% of the company's total revenue.
After tasting the sweetness in the mobile phone field, Xiaomi seems to be interested in replicating the strategic solution in the mobile phone field to the automotive field. Looking back at Xiaomi's investment time in the automotive industry this year, we can clearly find that Xiaomi is accelerating the layout of the supply chain of intelligent electric vehicles, including automatic driving, lidar, power batteries, etc. For example, in June 2021, Xiaomi participated in leading the D round of financing of more than 300 million US dollars for Hesai Technology (lidar solution); in July, Xiaomi participated in the B round of investment of 10.28 billion yuan in Hive Energy and invested 187.5 million yuan in Ganfeng lithium battery; in August, Xiaomi participated in the Pre-A round financing of nearly 400 million yuan for geometric partners.
As of the end of September this year, Xiaomi has invested in 62 enterprises in the field of intelligent vehicles, including 17 intelligent driving layouts, 13 intelligent electric layouts, and 6 intelligent cockpit layouts. Among them, 22 companies are Xiaomi's new investments this year. For Xiaomi's investment this year, we can see that Xiaomi has made preparations before building cars, and accelerate the promotion of car-making plans through these parts and components. In other words, after investing in these companies, Xiaomi can better obtain resources, not only have bargaining power, but also help to ensure the stability of the supply chain.
summary
In the new car-making enterprises in 2021, in addition to Xiaomi led by Lei Jun, Li Yinan's cattle innovation energy is also a big hit. It should be noted that we see too much overlap in Lei Jun and Li Yinan, such as both are academic bullies, similar in age, and so on. However, from the perspective of the strength and preparation of the two sides to build cars, Lei Jun seems to be better than Li Yinan to some extent, because from the current information, Li Yinan seems to have no other preparations except for receiving $500 million in financing. On the other hand, Lei Jun has not only initially formed a supply chain in the automotive field, has certain bargaining power, but also has sufficient funds.