Why are home appliance giants involved in car building How to open a new track for profitability?

【Blue Technology Review】When the home appliance industry is facing a growth skyboard, how can the home appliance industry maintain a stable source of profits?

When the boundaries of the home appliance industry continue to break through, and cross-border empowerment becomes the best choice for industrial innovation, the home appliance industry begins to extend to the industrial chain.

In recent years, the new energy vehicle track has continued to be hot, and cross-border car manufacturing is not a new thing. Alibaba and SAIC Motor jointly launched "Zhiji", Baidu and Geely jointly established Jidu Automobile, Huawei announced that it would focus on ICT as a supplier of intelligent car incremental components, and Internet giants gathered to enter the car-making track, triggering a new round of car-making boom. Midea, Gree, Haier, Changhong, Hisense, TCL and other home appliance head companies are involved in the field of new energy vehicles, and the war between home appliance companies has also extended to the automobile market.

However, car manufacturing is not an easy task, and compared with The Internet giants and new car-making forces, home appliance companies are weak in building cars or producing auto parts. Many home appliance giants have tried to build cars without results, and once again continue the "car dream", which will inevitably show stronger productivity in order to be recognized by the market. Why has the new car-making force become the main battlefield for home appliance giants? How do they start a new profitable track?

The largest incremental field in the new era - new energy vehicles

At present, the new energy automobile industry is the new economic growth point of many enterprises, and it is also an "overtaking opportunity". From the perspective of the prospects of the new energy automobile industry, the policy is favorable, the demand is strong, and there is a huge potential space.

First of all, the state put forward the development vision of new energy vehicle sales by 2025 to reach about 20% of the total sales volume of new automobiles. Secondly, iResearch data expects that by 2025, China's new energy vehicle sales are expected to reach 5.3 million, when the number of new energy vehicles will be around 20 million. Third, statistics from the China Automobile Association show that the market penetration rate of new energy vehicles in 2021 has increased from about 6% at the beginning of the year to 17.8% in August.

On the other hand, the concept of smart homes under the 5G wave is gradually becoming a reality, and smart cars are also an important part of smart homes. Compared with the smart home products in the Red Sea, smart cars are a more important diversified layout of home appliance companies and a gold-digging opportunity to break the pattern of the home appliance market.

In the context of this era, many home appliance industries have entered the car-making track. On January 5, at the CES 2022 show, Japanese technology company Sony Corporation released a new electric SUV concept car VISION-S 02. Sony CEO Kenichiro Yoshida also announced that he will establish Sony Mobile to commercialize Sony's electric vehicles.

As the operator of creating the world's first scene ecological brand "Three-winged Bird" - Haier married with Geely, a well-known Chinese automobile company, to cooperate in the fields of new energy and intelligent vehicle application promotion; Skyworth Group also participated in the manufacture of complete vehicles, and at the 9th Electronic Information Expo, the Group exhibited a Skyworth Automobile, which is the re-labeling model of Tianmei ET5. At the same time, Skyworth Group will also upgrade the Tianmei ET5, the new car will be renamed Skyworth Automobile after the upgrade, and the new car tail mark will also be changed to skyworth Group's English name "Skyworth".

Home appliance giants squeezed into the auto parts track

Compared with the war-torn vehicle market, the auto parts track seems to be a good road. That is to say, do not build the whole vehicle but focus on auto parts, and deeply cultivate the core "three electricity" system of new energy vehicles, namely motors, electronic controls and compressors.

TCL founder Li Dongsheng said in response to a reporter's question that the future will be in the new energy vehicle-related products, has been set up a new on-board products department, these businesses have been carried out, we will catch the new energy vehicle train, become a provider of key components of new energy vehicles.

Hisense's entry into the automotive industry is not to choose to build cars, but through the three major layouts of automotive electronics. The idea of Hisense entering the car is to take the core components of vehicle-road collaboration and body perception as the entry point, and at the same time rely on the advantages of new display technology to cross-border layout of cockpit electronics, and layout of new energy vehicle air-conditioning compressors and vehicle thermal management fields with the advantages of automotive air-conditioning resources. Hisense's goal of entering the automotive industry chain is very clear - to do things in a down-to-earth manner, the positioning is very clear, that is, to serve the main engine factory, to be a first-class supplier of key components and solutions for smart cars.

As we all know, LG has always been a giant-level presence in the field of power batteries. According to data from the Institute of High Industry And Industry (GGII), the global power battery installed capacity in 2020 is about 136.30GWh, an increase of 18% year-on-year, while the installed capacity of LG chemicals reached 30.91GWh, with a market share of 22.7%. LG Group is now fully relying on its advantages to announce the closure of the ace mobile phone business and enter the car manufacturing to strengthen the auto parts business. LG said the next journey will be in the fields of electric vehicle components, smart homes, artificial intelligence and so on.

In the era of car building, how to layout the outlet

Huang Hongsheng, founder of Skyworth Group, bluntly said at the Third Global New Energy and Intelligent Vehicle Supply Chain Innovation Conference that "new energy vehicles are home appliances with wheels". From the current point of view, domestic head home appliance companies such as Gree, Midea, Haier, Hisense, Skyworth and Xiaomi have all cut into the new energy vehicle track. It is worth noting that although they are all cars, the angle and logic of each company are not the same.

At present, home appliance companies are mainly divided into three categories: one is to directly participate in vehicle manufacturing; the second is to penetrate into industries related to automobile supporting products; and the third is to invest in car-making projects.

Vehicle manufacturing, represented by Haier and Skyworth. Judging from Haier's current strategic layout, it is better to "build scenes" than to "build cars". As the world's first scene brand "Three-winged Bird", Haier has always been in a leading position in the field of intelligent life scene ecology. Therefore, Haier's "car-making" is more through its industrial Internet platform to empower and connect automobile manufacturing-related enterprises, intelligently connecting the two life application scenarios of cars and homes to achieve the interconnection of all things.

For Skyworth, Skyworth has launched two vehicles ET5 and EV6, but in the domestic market where new energy intelligent vehicles are fiercely competitive, Skyworth does not have an advantage, so it can only seek more differentiated performance in the on-board driving scenario.

At present, the power point of Skyworth Automobile in the driving scene is also the interconnection of cars, but the innovation point of Skyworth Automobile is to pay more attention to health functions such as blood pressure and heart rate of drivers, and is equipped with patented sleeping seats, making the car the user's second sleeping space.

Although Huawei, Haier and Skyworth are all car-making enablers, Huawei is technically empowered on the infrastructure of smart cars, such as the core autonomous driving of new energy intelligent vehicles, the Internet of Vehicles, chips and other basic intelligent fields. Haier and Skyworth are more on the on-board intelligent foundation built by Huawei and car companies, starting from the company's own core smart home scene, building and opening up the IOT scene between the original smart life and smart cars, and realizing the driving scene empowerment of new energy vehicles.

The production of automotive supporting parts is represented by Midea, Hisense and Gree. For Midea, which has experienced a car-making failure, this time the target is the core "three electric" system of new energy vehicles, that is, the motor, electronic control and compressor as the core of the auto parts, the product line involves motor drive system, thermal management system and auxiliary, automatic driving system.

Interestingly, in March 2021, Hisense spent about 1.3 billion yuan to hold Japan's Sanden Holdings Co., Ltd., and also intends to make efforts in subdivisions such as air conditioning compressors and vehicle thermal management technologies for new energy vehicles.

In April, Gree Electric Appliances disclosed a patented technology named "a core punch, stator core, motor and new energy vehicle". According to the patent, this technology is applied to the field of permanent magnet motors, and permanent magnet motors are generally used to power new energy vehicles. In this way, the idea of Gree car manufacturing is also starting from new energy auto parts in a short period of time. Compared with the first logic, the production of parts and components can not only improve the profit margin of home appliance companies, but also reduce the risk of business operations to a certain extent because they do not conflict with their main business.

Participated in the automobile industry, represented by Hisense. In March 2021, Hisense Home Appliances invested about 1.3 billion yuan to hold a stake in Japan's Sanden Holdings Co., Ltd., and plans to use the resources of partners to focus on new energy vehicle air conditioning compressors and vehicle thermal management and other segments.

Although the logic of the "car-making" of home appliance companies is more cautious and rational than ever, "car-building" has always been a coexistence of opportunities and risks. Whether the future will repeat the mistakes of the past or enjoy a new life, everything needs to be witnessed by time.

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