Author/ Author of "Finance and Economics" Weekly Hong Hanqi
Edited / Mao Shiyang
The first model of Cyrus and Huawei, the SF5, faded out of the Huawei storefront
At the beginning of the new year, many prospective owners of the Cyris SF5 panicked. Recently, some car owners have reflected in the car community that the Xilis SF5, which they have paid a deposit, is facing the embarrassing situation of model discontinuation before it is delivered.
The reason for the doubts of car owners is that in Huawei's smart store, the Xilis SF5 no longer accepts reservations, whether it is the "C position" of sales or marketing, it is occupied by another product, that is, the first product of Huawei's more engaged AITO brand, Q&A5.
In December 2021, Xilis cooperated with Huawei to launch the high-end pure electric brand AITO. At the end of the same month, Huawei's winter flagship new product launch, the AITO brand and the first mass production model M5 finale was released, and Huawei Yu Chengdong introduced the new car in nearly 60 minutes. The AITO brand is announced to be jointly built by Huawei and Jinkang Xilis, a subsidiary of Xiaokang Co., Ltd., but the products and brands are dominated by Huawei.
Yu Chengdong said that this is a "four-wheel intelligent terminal launched by Huawei" and a model that is "comparable to millions of luxuries". A total of three models of new cars have been launched, and the pre-price after subsidies is 250,000 yuan to 320,000 yuan.
In the sales of Huawei stores, "Huawei-led development models" has become one of the core selling points of products. "Finance and Economics" Weekly visited and found that many Huawei experience stores in Beijing do not see the figure of the Cyrus SF5, and the models that are placed in a conspicuous position in the store have indeed been replaced by AITO Q&A M5.
A Huawei store salesperson told Caijing Tianxia Weekly that at present, xilis SF5 Huawei Smart Selection has suspended sales, "because the delivery volume before the (Spring) Festival has been sold out, considering the delivery problem has closed the predetermined channel." As for whether the booking will be re-accepted after the Spring Festival, the salesman said that he had not received relevant notices.
It is not only the sales channel that gives up the "C bit", but also the production capacity. Another Huawei store sales staff revealed that because the Q&I M5 has been listed, "the company has limited production capacity and needs to give up the production line to the second-generation model", that is, the Q&E M5. Compared with the Xilix SF5, the AITO Q&I M5 is priced higher, and Huawei's participation is also higher from product development to technical support.
In the above sales view, although the price of the M5 is raised by about 30,000 yuan relative to the SF5, the product strength has been upgraded, and the mileage, intelligent configuration and interactive experience have been upgraded, "This is already the second generation of products, (compared to SF5) The product force is definitely stronger, and the manufacturing process is more mature."
At a Huawei Smart Select experience store in Beijing's East Third Ring Road, Caijing Tianxia weekly visited and found that a huge poster of the AITO brand was posted on the façade of the mall where the store was located, and the booth area that originally belonged to the SF5 model was now parked in a silver-white Q&A M5. In addition to the words "Jinkang Xilis" at the rear of the M5, the relevant brand logo of "Xilis" is nowhere to be found in the store.
In addition, Huawei's official store does not see Cyrus model sales information. Entering the Huawei Mall, the first-level page is a conspicuous "AITO car", and the Xilis SF5 only retains the new car test drive reservation service.
In the sales of Huawei stores, "Huawei-led development models" has become one of the core selling points of the product, and the sales staff said that "from the opening of pre-sale to now, the order volume of the M5 has reached more than 6,000 units nationwide." ”
Compared with Huawei's deeply involved M5, Cyrus SF5 is the carrier of the first cooperation between Jinkang Cyrus and Huawei, but before Huawei participated, the Cyrus brand and SF5 products already existed, and were developed by Jinkang Cyrus. Until April 19, 2021, the Xilis Huawei Smart SF5 was launched during the Shanghai Auto Show, equipped with Huawei's electric drive system and HUAWEI HiCar part of the function, and the new car launched two configurations, with a price range of 216,800 yuan to 246,800 yuan.
Compared with Huawei's "plug-in", this cooperation brings greater rights and interests to Xilisi, which can be stationed in Huawei's sales channels and become the first product after Huawei 'sells cars'.
Today, the new protagonist has become The Inquisition M5. According to the plan, starting from January 20, 2022, the M5 will open a test drive reservation and reservation in 500 Huawei stores in 118 cities across the country, and it is expected to start delivery at the end of February this year.
As early as the launch of the AITO brand, controversy over the fact that Xilix would be reduced to a Huawei foundry had already spread. Regarding the controversy over the "foundry", Xilis parent company Xiaokang Co., Ltd. responded on December 31, 2021, saying that "Xilis is a long-term partner of Huawei, not a foundry".
Xiaokang, Jinkang, is it a foundry?
In fact, for the first product developed by kinkon cyrus, the official is not willing to give up easily, and now SF5 is returning to kincon cyrice's own sales channels.
Xilis officially told the "Finance World" weekly that at present, the SF5 Huawei Smart Edition of Xilis can still accept pre-orders, and consumers can place orders through the official website of Xilis. However, if you want to see the car offline, "consumers in Beijing can only go to the Xilisi Five-Party User Center." According to official information, Wufang User Center is the only self-owned sales store of Xilisi in the Beijing area.
For the rumors of "Celis SF5 discontinuation", Cyrus also gave a completely different answer. On January 5, Xilis issued a letter to Xilis SF5 users, saying that "Xilis SF5 will continue to accept user orders, and after the user places an order, we will arrange a special person to follow up and assist in delivery in a timely manner."
In fact, there is also a vigilance within Kincon Cyris that it has become a foundry.
According to sources close to Huawei, Huawei told Caijing Weekly that Huawei was preparing to launch a high-end car brand as early as 2020, and "the existing Xilix SF5 cannot meet Huawei's ambitions and expectations for the automotive field."
In Xilis, the attitude towards in-depth cooperation with Huawei is equally clear. "Zhang Zhengping once wanted to maintain her own dominance," a source revealed, but handed over the "soul" of Jin Kang Cyrus to Huawei, directly promoted by Zhang Xinghai, the ruler of Xiaokang shares.
Zhang Zhengping is the son of Zhang Xinghai, the founder and chairman of Xiaokang Co., Ltd., who was at the helm when Jinkang Cyris was founded in 2015. From the establishment of the company, the launch of the Xilis brand, to the SF5 product, behind the Parent Company of Xilis Chongqing Xiaokang Industrial Group (hereinafter referred to as Xiaokang Shares) once hoped to achieve a counterattack by means of the electrification and intelligent changes of the automotive industry, and it is also the ambition of Zhang Zhengping, the "second generation of cars" after the 80s.
Xiaokang co., Ltd. was listed in June 2016, relying on cooperation with the state-owned enterprise Dongfeng Company to produce low-cost passenger cars and "vans", which is not well-known in the automotive industry. In January 2017, Jinkang New Energy was approved by the National Development and Reform Commission for its annual output of 50,000 pure electric passenger car projects, and in October 2018, Jinkang New Energy was approved by the Ministry of Industry and Information Technology and officially obtained the new car announcement access permit, becoming the ninth car company to obtain the qualification for car manufacturing.
In order to expand the voice of the Xilis brand, Zhang Zhengping initially adopted Silicon Valley as a research and development center, trying to endorse the brand with overseas background. At the beginning of 2016, Jinkang New Energy, led by Zhang Zhengping, launched its subsidiary SF MOTORS, the predecessor of Xilix, in Silicon Valley, in the United States, focusing on high-end electric vehicles.
In October 2017, Xiaokang announced a partnership with Martin Eberhard, one of Tesla's founders and former Tesla's first CEO.
In order to achieve this cooperation, Xiaokang shares spent a lot of money, and its wholly-owned U.S. subsidiary invested $33 million to acquire 100% of martin's founding company. According to public information, Martin Eberhard founded a company called InEvit, with total assets of $402,300 and net assets of -$391,100 in the consolidated statement of 2017.
After completing a series of asset acquisitions and "gold plating", at the end of 2018, the Jinkang New Energy Intelligent Factory in Liangjiang New District, Chongqing, started trial production and was officially put into operation in April of the following year, with an annual production capacity of 100,000 vehicles, and the first mass production model was the SF5. That same year, SF MOTORS also launched another SUV product, the SF7.
According to Zhang Zhengping's expectations at the time, the acquisition of factories in the United States and the Chongqing plant of Jinkang New Energy will achieve an annual production capacity of 200,000 SF MOTORS, and achieve full production in the next 3 to 5 years, that is, between 2021 and 2023.
Reality comes in more bone. In 2019, when the new domestic car-making forces are facing difficulties in product delivery and financing difficulties, the development path of SF MOTORS in the US market is also not smooth.
This year, Zhang Zhengping decided to abandon the US business and return to the domestic market and continue her activities under the name of Cyrus. The final delivery date of the Cyris SF5, which was scheduled for delivery in the third quarter of 2019, was postponed to July 2020, and the technical route was changed from a range extender, a pure electric dual technology route, to a range extender technology version that only remains.
In fact, before Huawei entered, the sales performance of the Xilis SF5 can be described as dismal, from July 2020 to April 2021, the monthly sales of the Xilis SF5 peaked at 300 vehicles, and during the period of several months of sales of less than 100 vehicles. The ideal ONE, which also takes the range extender technology route, has climbed from 2,400 vehicles to more than 6,000 vehicles in the same period.
Xiaokang is close to Huawei
On the one hand, the development of Jinkang Cyrus is not smooth, and on the other hand, the operation of Xiaokang shares behind it has begun to be challenged.
In August 2018, Xiaokang executives proposed that due to the shortage of funds, new financial investors were urgently needed, so Xiaokang executives met with the relevant responsible persons of the state-owned enterprise Dongfeng Company to seek cooperation.
At the end of September, Xiaokang proposed to trade with Dongfeng Company, planning to give 50% of the equity of dongfeng Xiaokang, a joint venture between the two sides, to Xiaokang shares, 100% of which were merged into listed companies, and at the same time, Xiaokang shares gave the equity of listed companies to Dongfeng Company, and Dongfeng Company's shareholding ratio in Xiaokang shares would increase from about 7% to more than 30% to solve the problem of funds.
In the "new car" business, Zhang Xinghai also needs other solutions. Just as Xiaokang co., Ltd. used Dongfeng Motor Group to develop mini-vans that year, in the new energy vehicle track, Jinkang New Energy tried to get close to Huawei in the field of smart cars.
Around November 2020, Huawei accelerated its layout in the field of intelligent vehicles, and on November 17 of the same year, Yu Haikun, former vice president of the research and development department of CITIC Construction Investment Securities, joined Xiaokang and began to be responsible for the research and development, production and sales of Cyrus. Since then, rumors of cooperation between Xiaokang and Huawei have not gone away.
The immediate effect was the share price of Xiaokang shares, which rose by nearly 50% in the week starting November 20, 2020. In late April 2021, Huawei exhibited the Cyrus SF5 equipped with the Huawei core at the Shanghai Auto Show and announced that it would sell the car on Huawei channels. Subsequently, the stock price of Xiaokang shares entered the fast lane, from the range of 30 yuan per share, up to july 2021 intraday breakthrough of 80 yuan per share, the total market value once exceeded 100 billion yuan. This little-known car company once had a market value close to THAT of GAC and Changan among A-share vehicle companies, ranking sixth.
In terms of product sales, Huawei's addition has indeed brought more exposure to Xilis and Xiaokang shares. Xiaokang shares have said that Xilis Huawei Smart Selection SF5 was listed for two days, and the order volume exceeded 3,000 vehicles. In June last year, Cyrus SF5 deliveries climbed to about 1,100 units.
The "madness" didn't last long, though. At the end of December 2021, after Huawei released the new car AITO Q&I M5, Xiaokang's stock price has fallen from more than 70 yuan to 46.6 yuan per share at the close of January 13, and the total market value has fallen by nearly 40%.
In addition, Huawei's "traffic" monetization ability in the automotive industry has not continued to support sales. According to public data, the sales volume of the Cyris SF5 from April to August last year was 129, 204, 1097, 507 and 715 respectively. The poor sales performance of the SF5 is seen as one of the main reasons for the tragic abandonment of the SF5.
Can Xiaokang shares "keep up"?
Although the Cyris SF5 is cold, Huawei is enthusiastic about selling cars.
In May 2021, shortly after the launch of the Cyrus Huawei Smart SF5, Yu Chengdong said that Huawei had set an annual target of 300,000 vehicles in 2022. According to 21st Century Business Herald, in an interview with the online media on January 9, Yu Chengdong once again emphasized the indicator of "300,000 vehicles" annual sales.
What is the level of annual sales of 300,000 vehicles? Public data shows that in 2021, the annual sales scale of the top three new car-making forces will not exceed 100,000 vehicles. Relying on the Cyrus SF5, it is obviously difficult to achieve this goal.
In Yu Chengdong's plan, Huawei will use 1,000 Huawei stores to sell cars in 2022, "assuming that each store can sell 30 units per month, monthly sales can reach 30,000 units." Once the annual sales of 300,000 vehicles are achieved, "the annual sales of cooperative car companies will reach 100 billion yuan.".
For this year's annual sales target of 300,000 vehicles, Yu Chengdong is quite confident in the Huawei system, and believes that at this stage, whether it is Huawei's brand marketing capabilities, retail channel capabilities or product competitiveness, it is enough to support this sales expectation. Of course, there is also pressure, and the source points to the capacity supply problems caused by the product climbing stage and supply chain risks.
Whether Xiaokang shares can keep up with production capacity has become the key in Yu Chengdong's eyes.
At present, Xiaokang is betting on the limited production capacity of the newly launched Qijie M5. On January 1 this year, Zhang Xinghai, founder of Xiaokang Co., Ltd., issued an internal letter from the company, saying that "at the beginning of 2022, our top priority is to use the strength of all Xilix and the strength of the whole group to ensure the high-quality mass delivery of the M5". In Zhang Xinghai's view, this is the battle of Cyrus's foothold and honor, and it is also the transformation battle and the battle of breaking the situation in the development of Xiaokang Group.
The Cyrus SF5, on the other hand, is in a situation where there is no time to be taken care of. Although Cyrus Auto officially said that the Sf5 is currently in the state of order opening, the purchase channel is not smooth. A few days ago, the "Finance world" weekly contacted the Cyrus five-party user center through the official channel given by Cyris, and the phone was in an unreachable state.
Jinkang New Energy's Chongqing Liangjiang plant, which is based on the SF5 and Q&I M5, has a planned annual production capacity of 100,000 vehicles. In the view of industry insiders, at this stage, Thexis production capacity can not keep up, it is likely that the vehicle production standards of Xilis need to be run-in with the "Huawei standards".
In fact, from the Xilis SF5 to the AITO brand, Huawei's penetration and voice are improving in cooperation with Xilix. According to insiders of Xiaokang Co., Ltd., Huawei has been deeply involved in all aspects of the AITO brand from research and development, manufacturing to sales and service.
From the product point of view, in the Syris Huawei Smart Selection SF5 stage, Huawei only provides technical support in the field of electric drive and intelligent cockpit, for the AITO brand, Yu Chengdong once introduced, "The Q&I M5 is designed with the help of Huawei's consumer business industrial design team and software design team."
The latest quarterly financial report of Xiaokang Shares, to which Jinkang New Energy belongs, also reveals the company's investment in the transformation of production lines. According to the financial report of Xiaokang Co., Ltd. in the third quarter of 2021, the company's net profit attributable to the mother in the quarter was a loss of 602 million yuan. The reason for the loss is due to the "large investment in new energy intelligent factories, and the increase in amortization of marketing expenses and development expenses of high-end new energy vehicles".
"Our goal is to build huawei's partners with in-depth cooperation into the most profitable car companies", which is Huawei's commitment to cooperative car companies. Compared with the wealthy SAIC Group, Xiaokang shares may not have much room for maneuver on the issue of "selling out their souls" or not.
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