Author 丨 Huang Yaopeng
Edited 丨tian grass
Produced 丨 Automan Media
At CES (International Consumer Electronics Exhibition) in early 2022, Sony Chairman and CEO Kenichiro Yoshida personally unveiled the Vision S concept car, announcing the establishment of a new division, Sony Mobile, which will be responsible for the commercialization of electric vehicles, that is, car manufacturing.
Yoshida revealed that the car has been tested on the European road and is the first mass production car based on the 5G cloud platform. He hinted that the so-called concept car is actually quite mature and quite close to mass production.
At both CES 2020 and 2021, Sony exhibited electric concept cars, also named Vision S. The appearance of this car has not changed much, but from its technical details, it does shift in the direction of engineering.
At the 2020 CES conference, Sony also vowed not to build a car. Sony claimed at the time that the car was only used to "demonstrate the application of Sony technology in the automotive industry."
But this year, the tone of the mouth suddenly changed, and the reason for the change was: "I didn't expect that the first prototype car, the positive feedback from the media and consumers was so much."
Under the "good as flow", a new department was also established, and Sony has been accumulating technology for the past two years for real cars, and seems to be very serious about this matter. If you follow Sony's schedule, it should be earlier than the mass production of the "Xiaomi car".
1 The former king attempts to change his position and ascend
Sony's advantages are clear. Established after the war, its position in the consumer electronics industry rose from the 1970s to its peak in the 1980s and continued into the early 2000s. It was similar to the prestige of Apple today, but it has a longer history so far.
Although Sony is still an important player in televisions, video cameras, cameras, audio, medical equipment and other fields, its main profit today comes from "content".
In fiscal 2020, its most profitable businesses were games and music, which together made a profit of 1,282.1 billion yen (about 70.7 billion yuan). The film and television business has high revenues, but the profits are not high. Sony's strategic direction before building the car seemed to be "creative entertainment company".
In the automotive industry, Sony's CMOS image sensors account for almost 50% of the world's share. It has a deep accumulation of technology in lidar and cameras, VR and AR as an extension of image technology, and Sony is also doing a good job.
The driving chips made by NVIDIA and Mobileye have both chosen to be compatible with Sony's hardware devices and sensors. Because of this, everyone thinks that Sony should be very good at doing smart cockpits.
Obviously, Sony's positioning in the automotive industry is a second-tier and third-tier supplier. And if the smart cockpit is done well, it can be a tier 1 supplier of some solutions (not an all-rounder like Bosch). Sony's idea is to jump directly to vehicle manufacturing and become a system integrator.
Sony's weaknesses are also clear. So far, Sony's technical success has been based on hardware.
However, when the mobile phone was dominated by hardware ecology, Sony had already declined and was forced to merge with Ericsson in the mobile phone business (Nokia was king at that time). This is because Sony is a typical "technical geek", delving deeply into the details of some technologies and reaching a very high level, but ignoring commercial feedback and losing sight of strategic trends.
Sony has repeatedly wanted to revive the mobile phone business, making a fuss about cameras, photographs and screens, and these parts are indeed top-notch, but Sony's design (10,000 years straight board, obsession with thin and light, strange menus) is stubborn and cute. The vast majority of mid-to-high-end mobile phones in the world use Sony cameras or CMOS components. Sony's own mobile phone business is difficult to say.
Compared to hardware, Sony never seems to understand consumer software habits. It stubbornly uses a Japanese software interface, and the younger generation of consumers has long been brainwashed by Windows and MACOS, always feeling that Sony is very awkward from the menu layout and operation methods. According to this, Sony has no software talent at all.
This stereotype has been accompanied by Sony's missed Internet and mobile Internet outlets. At a time when almost all tech companies are involved in car building, Sony seems to be waking up.
2 The logic of car building is the same
Why does Sony have to build a car? This is similar to the logic of Apple, Dyson, Xiaomi, and Huawei (doubtfully) trying to build cars.
The profit margin of consumer electronics is higher than that of the automobile manufacturing industry, and in the automotive industry, the profit margin of suppliers is also higher than that of the whole vehicle manufacturer.
At the peak of Bosch, the net profit margin was as high as 20%, and the main engine factory that mixed well because of the transformation of the software and supply chain was heavily invested, and the profit margin was only about 5%. Like Toyota, it can do 10%, but it is actually an outlier.
However, today's new energy vehicles, which integrate the most cutting-edge industrial technology, ICT technology, IT technology and AI technology, are a powerful "dual engine" of technology and production. Bosch's profit margin fell to 4.5% in fiscal 2020 due to the increase in intelligent research and development (the 2021 financial report is not released, and it is expected to rebound to about 10%).
Investing in the future, you must endure a temporary loss of profit. Although the automotive industry is transforming, its capital return cycle has not been shortened. Equipment updates, marketing expenses, channel construction costs are still not less, and technology research and development costs are directly cut from gross profits.
Because of the current software + new energy technology direction, almost all OEMs are still in the early stage of accumulation. Whoever does not invest will be anxious and unable to participate in the future distribution of industries.
Therefore, from a purely financial point of view, Sony does not need to personally go down, continue to sell image sensors more fragrant. However, all tech companies are seeing that the value system of the automotive industry is shifting, and software and services will become the focus of valuation in the new era.
From this point of view, it is indeed not necessary to build a whole vehicle, as long as it has the ability to get the software ecology and aftermarket services related to intelligence. However, seeing Huawei's exploration in the automotive industry in the past two years, the conclusion is that only by building a car can it form a complete ecology and complete the value traction.
In the face of tickets to participate in future games, financial considerations should be put in the back. If Sony misses the limelight again, its existing content service provider status will still be insecure, because the channel of contact with consumers is pinched by others (such as the concept of metaverse).
3 Is the "Galapagos" effect the fate of Sony's electric vehicles?
Although the manufacturing of automobiles from consumer electronics to heavy industry is huge, electric vehicles have more or less bridged the gap. Neither the industry nor the industry doubts Sony's industrial design capabilities, nor does it doubt its system integration capabilities, but public opinion seems to have reservations about the prospects of Sony's car manufacturing.
Some in Japan are worried that Sony will not be able to get rid of the "Galapagos" effect. This island, isolated from the mainland and highly isolated by the ecological environment, was originally associated with Darwin's "Origin of Species", and later used to describe Japan's commercial ecology, highly developed and self-contained, but the result of the species being highly adapted to the local ecology is that it will perish out of the island.
The Japanese mobile phone industry is the perfect explanation for the "Galapagos" effect. In 1999, I was able to send e-mails, in 2000 I could take pictures, in 2001 I could use 3G, and in 2004 I could use e-wallets, far more than my peers. Today's Japanese brand mobile phones have lost their sense of overseas presence, and even the local market is in jeopardy.
However, Japanese cars do not match the results revealed by this effect. The reason is that Toyota, Nissan and Honda have all made special designs for the US market, and large-scale localization capacity deployment is only the result. In the Chinese market, this process has been repeated again, but the effect is a little worse. The reasons are complex and are not covered too much in this article.
Japanese cars realized at the latest in the 1960s that there was no way out of trapping the main island. Their internationalization process is thorough and irreversible, except for the organizational structure of the enterprise, the rest have been internationalized.
This actually shows that the so-called "Galapagos" effect does not apply to all Japanese companies, let alone the fate of Japanese companies.
When the difference between the local market and foreign demand is getting bigger and bigger, if you can't have it both ways, which end to take care of, Sony needs to think clearly.
This involves the preset market and production chain of "Sony Electric Vehicle", where exactly it is aimed at. If it is still limited to the local area, or self-deception believes that as long as the local market can be passed on, it is likely to repeat the fate of Sony mobile phones.
It is only from the beginning of the international deployment that there is vitality. This means that even if Sony wants to organize vehicle production in china, it will at least focus on the main market and "a considerable part" of the supply chain in China. For now, this seems to be the only way out.
Sony, which produces complete vehicles in China, now looks very unreliable. At the same time, because of the cost competitiveness of Japanese companies' batteries, it is no longer possible to compete with Chinese companies. Panasonic can do it because it bundles Tesla. In the future, with the large-scale deployment of batteries in Europe (the plan of the United States has great uncertainty), the status of the Japanese battery industry will retreat.
There is no "consumption atmosphere" for new energy in Japan. Although this statement is harsh, it is indeed true. The Japanese auto market is around 4 million to 5 million units (4.448 million units sold in 2021), while Japan's new energy vehicles (EVs, PHEVs) are only 3,000 to 4,000 units per month. This can be understood as a huge market space, but at the same time consumers are not ready to accept new energy vehicles.
As long as we compare the plans made by several major Japanese car companies in the local and overseas markets, it can be understood that the Japanese domestic automobile market is difficult to have the soil for the growth of new energy vehicles in 5 years. The planning made by Japanese companies in the local area, even if it is smooth, will only be carried out on a large scale after 2025, and it will not be a matter of slow shooting at that time.
Relying on the domestic market will only make the whole vehicle done by Sony disconnected from the world trend. This is not the time when Japan is the world leader in home appliances and electronics, leading the way in setting rules and forcing other countries to comply.
At present, the sony electric car, which is very low-key, may wish to worry about the survival problem within 5 years before copying the dream of Walkman sweeping the world.
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