Snubbing the Polar Fox, offending Xilis, and Huawei "forced" to build its own car?

Economic Observer reporter Pu Zhenyu only knows Huawei, not the brand. This is the impression left by some consumers on the latest new car AITO Q&A M5 on display in Huawei's experience store. "As soon as I came over, the sales told me what kind of huawei advanced technology this car uses, how advanced the appearance and interior are, and how to conform to Huawei's consistent style." On December 28, Xie Bolong, a consumer living in Beijing's Fengtai District, came to Huawei's world's first new concept store that had just opened and saw the just-released Q&E M5.

What puzzled Xie Bolong was that the logo "Jinkang Cyris" on the rear of the M5 was a strange name that the salesperson had not actively mentioned. Until he took the initiative to inquire, the sales staff told him that this car is a product created by Huawei and Xilis in deep cooperation, and at the same time did not forget to casually say a sentence "Huawei does not build cars, but Huawei helps car companies build good cars."

This sentence casually said by the salesperson is also an old saying that Huawei has emphasized many times. Recently, at the Q&I M5 new car launch event held in Shenzhen, Yu Chengdong, managing director of Huawei, CEO of consumer business, and CEO of smart car solution BU, mentioned this sentence.

However, this old saying became contradictory after the release of the Q&C M5 - Huawei has de facto "built cars", but still regards itself as a supplier. The two roles of car building and being a supplier are recognized to be very conflicting, because if companies play these two roles at the same time, it will be difficult to balance the originality and openness of their own technology.

In fact, the conflict between the two roles of car building and being a supplier has begun to appear in Huawei. On December 25, the large-scale delivery night of the Hi version of the Polar Fox Huawei originally planned to be held in Shenzhen was not held as scheduled.

A person familiar with the matter told the Economic Observer reporter: "Huawei has put the polar fox aside this time and replaced it with a well-off Xilis, in fact, this is also an important trade-off between Huawei and its cooperation with partners, Huawei feels that Xilis is more obedient, and it is more difficult for The Polar Fox to cooperate."

Although Huawei eventually "chose" Cyrus, Cyrus did not fully buy it. A person close to Xilisi told the Economic Observer reporter, "Yu Chengdong left Xilis clean and misled everyone to think that AITO was made by Huawei, but this is not the case."

For Huawei's contradictory approach, one of the industry's explanations is "raw rice is made first to cook mature rice", and the LOGO is added after the car is built first. In the view of Zhang Kangkang, senior analyst of Qingyan Huake New Energy Research Institute, unlike Apple and Xiaomi's car-making strategy of pursuing blockbusters, Huawei belongs to the rapid iteration of the first to do it - just like the counterattack history in the field of mobile phones, I believe that Huawei will definitely build cars.

Huawei's one-man show

Although Huawei has repeatedly emphasized "not to build cars, focus on ICT, and be a supplier of incremental components for smart cars", at the recent winter new product launch conference, Huawei went to the front of the stage for the first time from behind the scenes of the automotive industry by releasing the first model of the AITO brand.

Prior to this, there was no precedent in the automotive industry for suppliers to release vehicle products instead of brands. From the perspective of trademark ownership, the AITO brand undoubtedly belongs to the well-off group behind Xilis.

The event specifications also show that Huawei has completely regarded the AITO brand as its "pro-son". As a new product of "pressure platform", the M5 occupied as much as half of the time of the entire conference, and extended the originally planned 90-minute conference to more than 150 minutes.

More than 1 hour of the M5 release activity has become Huawei's one-man show, not only did not appear on the stage of Cyrus related people, even Yu Chengdong's speech rarely mentioned Cyrus, but mainly emphasized Huawei's role in the new car manufacturing process. As a contrast, when Xilix released the AITO brand in early December, Yu Chengdong made a video speech, and the speeches of relevant people of Xilis also frequently mentioned Huawei.

Yu Chengdong's "strong" attitude at this launch event was interpreted by the outside world as Huawei is the real leader and helmsman of the AITO brand. "This time, we used the industrial design team, software team, and user experience team of Huawei's consumer business to create this product together." Yu Chengdong stressed that the AITO Q&I M5 integrates Huawei's multi-faceted advantages.

In addition to the hardware and software of the vehicle itself, AITO also has a deep Huawei brand at the brand level of a higher dimension. Yu Chengdong said, "When this car was designed, my request to the team was that we should adhere to the brand spirit that Huawei Consumer BU (business team) has adhered to for 10 years, which we call 'three modernizations', high-end, fashionable, and youthful brand spirit."

By personally releasing the AITO brand Q&A M5, Huawei sent a high-profile signal to the industry that it had substantially built a car, and the statement that "Huawei does not build a car" became a "cover-up".

A small friend who is left out in the cold

The signal conveyed by Yu Chengdong at the press conference was quickly transmitted to the capital market. On the day of the release of AITO Q&I M5, the shares of Xilis's parent company Xiaokang fell by more than 7%, and fell for two consecutive days, and the market value shrank by more than 17 billion yuan in two trading days.

This sparked strong resentment on the side of Cyrus. A person close to Xilis told the Economic Observer Network reporter: "AITO's vehicle technology and research and development design are all manufactured by Xilis, and Huawei only brings new cars and machines in, including some interior configurations, but these absolutely cannot be called Huawei's by AITO." ”

Huawei's involvement in the AITO brand has deviated from the business scope of general auto suppliers. In addition to releasing vehicle products instead of the brand side, Huawei's support for the AITO brand at the channel level also exceeds the previous cooperation model Cyrus Huawei Smart SF5.

The sales staff of a Huawei authorized experience store in Beijing introduced to the Economic Observer reporter that the previous Xilis Huawei smart selection SF5, Huawei is only responsible for sales, not responsible for after-sales, and the sales and after-sales links of the Q&I M5 are personally taken over by Huawei, and even the charging piles are marked with Huawei's LOGO.

As a "supplier" that is not willing to just provide parts, Huawei not only leaves Xilis, but also shows signs of "cooling" in its relationship with another car company partner, Jihu.

"Huawei has expressed its dissatisfaction with Polar Fox, probably because in terms of cooperation, the Pole Fox factory adopts Magna's design concept, management method, and work process, and Huawei hopes to replace Magna's thinking with its own thinking, because the two are completely incompatible, and Polar Fox is not willing to do so." The above-mentioned people familiar with the matter said.

During the Guangzhou Auto Show in November 2021, Jihu revealed that the alpha S new HI version large-scale delivery tasting activity will be held in Shenzhen on December 25. For the location of the event, the outside world is not surprised, Shenzhen is the base camp of Extreme Fox partner Huawei, and the important selling point of the Extreme Fox Alpha SHI edition lies in the strong Huawei technology brand.

However, on December 23, the secretary of the board of directors of Beiqi Blue Valley, the parent company of Jihu Fox, told investors that the large-scale delivery tasting event scheduled for December 25 had been replaced by an internal delivery event held on December 20 at the Magna intelligent manufacturing production base of Beiqi Blue Valley, that is, the Zhenjiang factory.

There are more details that show that there is an "mutual suspicion" between Polar Fox and Huawei. At the 2021 Guangzhou Auto Show, Jihu emphasized that the car has three "firsts", including "the world's first mass production car equipped with Huawei's HI full-stack intelligent driving solution, the world's first mass production car that supports high-end intelligent driving on urban roads, and the world's first pure electric car equipped with Hongmeng OS".

But on December 22, at an official media communication meeting, The Fox only called the car "the world's first high-end intelligent driving mass production car that supports urban roads." From this caliber alone, it is not clear that the car has anything to do with Huawei. While the new HI version of Alpha S no longer mentions the title of "the world's first pure electric car equipped with Hongmeng OS", the Q&I M5 is called "the first Hongmeng car" by Huawei.

A person close to the extreme fox quite helplessly told the Economic Observer reporter, "After all, everyone is grabbing the concept of the first model, people (AITO) is their own brand, and it is certain that the extreme fox can only give way."

Huawei is in between

While shouting the slogan of "no car" and on the other hand, it is increasing the number of "car building" under the banner of cooperation, Huawei is not unaware that this move will cause concerns as a partner, but it insists on doing it. Under the seemingly contradictory mentality, Huawei may already have its own plans.

At the Shanghai Auto Show in April 2021, Huawei became the "top stream" of the industry in the absolute sense. At that time, Huawei announced a high-profile in-depth cooperation with Xilis, and automakers such as Jihu, GAC, and Changan were vigorously rubbing Huawei's traffic. Being able to get involved with the Huawei concept is something worth boasting about for automakers.

However, half a year has passed, and the "empowerment" effect expected by the industry has not appeared. Xilis Huawei Smart Choice SF5, which has in-depth cooperation with Huawei, did not have a hot sales scene. Pole Fox has not gained too much heat in the market because of Huawei's HI full-stack intelligent driving solution.

It is precisely because of the poor market expectations of Celis Huawei's smart choice of SF5 that Huawei and Xilix plan to re-establish the high-end brand of AITO. In fact, "starting from scratch" to recreate a new brand has long been something that many independent brands have done in the process of moving towards high-end, especially in the context of the mushrooming of high-end brands in the current independent brands.

It is understood that there has been a long-term dispute within Huawei over whether to build a car or not. In November 2020, Huawei formed two camps internally over whether it wanted to "build cars", of which the "car-making faction" was led by Yu Chengdong. In the face of internal controversy, Ren Zhengfei personally made a decision, high-profile drew the red line that Huawei does not build cars, and mentioned that "whoever proposes to build a car in the future and interferes with the company can be transferred from the post."

However, the general view in the industry is that "no car" is only a consensus on paper within Huawei, and the private struggle between car-making and non-car-making factions is still fierce.

Looking back at Huawei's entry into the automotive industry, it is actually only two years. An important background for Huawei's entry into the car is that its mobile phone business has suffered a heavy setback, and it needs to find a new growth point. Regarding the point of making up for the loss of mobile phone business, Yu Chengdong has made relevant statements many times.

According to the data, Huawei's mobile phone business shrank again in 2021, and the shipment of Huawei mobile phones in the global market in the third quarter was 5.8 million units, with a market share of only 2%, down 40.8% month-on-month and 84.95% year-on-year. Affected by the mobile phone business, in the first three quarters of 2021, Huawei's revenue was 451 billion yuan, a decrease of more than 200 billion yuan over the same period last year, down 32.14% year-on-year.

In the view of Yan Jinghui, an analyst in the automotive industry, the M5 should be a car built by Yu Chengdong under the pressure of the red line of "no car". For the principle of "no car building", Huawei may not relax in the short term, but Yu Chengdong will not give up continuing to substantively promote "car building". "This [caused dissatisfaction among vehicle partners] is exactly what the car builders want to happen." Some auto industry analysts told the Economic Observer that Huawei's internal car-making faction hopes that the outside world will have expectations for Huawei's big package, in fact blocking the possibility of Huawei's cooperation with the big car manufacturer as a tier1, and finally leaving Huawei with only one road to build cars and achieve darkness.