Returning to car building, will Midea become the next Bosch or repeat the mistakes of the past?

In 2021, the list of "new forces" in car manufacturing is still expanding. Entering the field of smart electric vehicles has become a new goal of China's home appliance giants. Over the years, home appliance companies including Gree, Haier, Hisense, Skyworth, midea and other home appliance companies have successively entered the field of car manufacturing, or auto parts or vehicles, and their positive attitude is no less than that of a number of Internet companies.

The reason behind it is just like Lei Jun will build a car to the height of the "last entrepreneurship", after years of competition in the home appliance industry, the price of various products has hit the "floor price", the phenomenon of product homogenization is serious and the market is saturated, and the future increase is almost negligible. In the face of this dilemma, home appliance giants have cut into each other's product field, but found that the average profit of the overall home appliance industry is lowered, no profit has no future, compared to breaking the industry ceiling of the head broken blood flow, it is relatively easier to change the track, not to mention that these home appliance giants themselves have advanced manufacturing experience, even if the whole vehicle cannot be built, auto parts are also a brighter road.

On January 12, 2022, Fang Hongbo, chairman and president of Midea Group, delivered a keynote speech on "Firm Growth, Broad Sky and High Sky" to all employees, in which Fang Hongbo clearly stated that "the industrial layout of new energy vehicles is a very important strategic direction for the future of Midea." ”

On December 30, 2021, Midea Group's mechanical and electrical business group was officially renamed "Midea Industrial Technology" and expanded from the core components of traditional home appliances to industrial automation, new energy, semiconductors, intelligent transportation and auto parts. Fu Yongjun, vice president of Midea Group and president of Midea's industrial technology, said that in 2021, Midea completed the production of 100 million household air-conditioning compressors, and also completed the production of the first automotive air-conditioning compressor, automotive main drive motor and control chip.

A year earlier, in 2020, Midea controlled Beijing Hekang Xinneng Technology to strengthen the company's layout in the business of new energy vehicle powertrain, motor controller, auxiliary power system, and intelligent charging pile for electric vehicles.

01 Home appliance enterprises car dream

This is not the first time that the United States has entered the automobile field, and the home appliance industry has "crossed over" to play with cars, and Midea is not unique.

Around 2003, around 2003, Midea, Oaks, Chunlan, Xinfei and other home appliance companies announced car manufacturing, and the industry set off a wave of entering the automobile industry.

In 2003, Midea quickly completed the strategic layout of entering the automotive industry with lightning speed, and planned to build a "Yunnan Midea Automobile Industry City" with vehicle sales of more than 5 billion yuan.

Subsequently, Midea Group successively acquired three enterprises, Yunnan Bus Factory, Yunnan Aerospace Shenzhou Automobile Co., Ltd. and Hunan Sanxiang Bus Group Co., Ltd., and successively built and put into operation two major manufacturing bases for Midea buses, Kunming New Base and Changsha New Base, becoming the most powerful enterprise in the home appliance industry at that time.

However, due to poor management, in 2008, Midea announced the suspension of car-making projects, and Midea's first attempt to build cars failed. Midea's two major production bases changed owners, among which the production base of Midea Sanxiang Bus Company was taken over by the Changsha Municipal Government of Hunan Province for 108 million yuan, and the Changsha Automobile Production Base of midea was taken over by BYD for 108 million yuan.

Oakes also had a brief foray into the automotive sector between 2003 and 2005. In July 2003, Oaks signed an agreement with Shenyang Agricultural Machinery Group to invest 40 million yuan to acquire 95% of the equity of Shenyang Shuangma Automobile Co., Ltd., thereby obtaining the production license of SUVs and pickup trucks and officially entering the automotive circle. In less than a year, Oaks withdrew from the automobile manufacturing industry due to poor production and sales, frequent quality problems and other reasons. At that time, Oaks spokesman Huang Jiangwei concluded, "Oaks was a car dream, and the cost of this dream was 40 million yuan." ”

Until 2011, Huang Hongsheng, the founder of Skyworth Group, shifted his attention to the field of new energy commercial buses, and the Nanjing Golden Dragon Bus he founded became the first case of home appliance companies successfully transplanting the automobile industry. In November 2019, Huang Hongsheng then entered the passenger car and established a joint venture with others to establish Tianmei Automobile, and reached an agreement with Kaiwo Group in early 2021, and officially renamed the latter's Tianmei Automobile to Skyworth Automobile at the end of April. According to its released sales data, it will sell 6,275 vehicles in 2021, which has not yet entered the top ten of the new forces.

Gree Dong Mingzhu also cross-border car manufacturing in 2016, may be a precedent from Skyworth, still choose to enter the automotive industry from the field of new energy commercial buses. After the acquisition of 100% of Zhuhai Yinlong's equity for 13 billion yuan was strongly opposed by shareholders, Dong Mingzhu "borrowed debt to invest" and joined forces with Wanda's Wang Jianlin and JD.com's Liu Qiangdong in his personal name to become shareholders of Zhuhai Yinlong. However, in the following years, Yinlong New Energy Vehicle was exposed to negative news such as arrears of supplier project payments and dismal sales.

Going forward and following, although the head is broken and bleeding, the dream of the home appliance giant to build a car has not been extinguished.

02Why did Midea choose to build a car

As we said at the beginning of the article, the home appliance giants have the dream of building cars, ostensibly pursuing the outlet, but in fact, the traditional home appliance giants are worried about moving forward.

With the outlet of the home appliance industry going down, the new energy vehicle industry has entered a rapid upward channel, so the "Beauty" smashing money and smashing people and brands must also seize a foothold on this road.

Li Jianteng, managing partner of Oliver Welan Consulting, once analyzed that on the one hand, the current automobile is no longer only focusing on the traditional mechanical part, the empowerment of software is increasing, and the relevance of science and technology is also increasing, home appliance companies have certain experience in electronic manufacturing and software promotion, which makes "Midea" see the opportunity to cut into the car industry; on the other hand, the current pattern of the home appliance industry has become stable, many companies are looking for the next growth space, and the growth space of the automotive industry is large enough.

But once again, Midea is very cautious. After experiencing the previous unsuccessful car manufacturing, Midea chose to cut in from the new energy auto parts to cut the "cake" of the wind dividend. "Seizing" the highland of the core components of intelligent electric vehicles is the focus of this round of home appliance companies entering the auto parts industry.

Midea's wheel of car manufacturing is a different path from other car manufacturers, but its aimed motor drive system, thermal management system, auxiliary / automatic driving system, is not without a strong opponent, Bosch, continental, ZF and other foreign giants in the field of automotive chassis control system core components have been monopolized for many years, and the wire control chassis is regarded as the cornerstone of autonomous driving system autonomy and control. Midea's choice to cut in this direction, whether it can really play the accumulation of home appliance giants in manufacturing and quality control in the supply of auto parts, it remains to be tested by the market. When it comes to core technology, it is easy to talk about, and it is not simple to do.

Moreover, time is also very critical, Fu Yongjun, president of Midea's industrial technology, said, "Time is a very big problem. At the same time, the development speed of new energy vehicles is very fast, and this time cannot wait. "Not only the pressure of foreign giants, but also the rapid layout of home appliance peers has also brought a sense of urgency."

TCL also aims to become a provider of key components for new energy vehicles. TCL Ventures has participated in the investment of several auto parts companies, including catl, the head of power batteries, Innoviz, a lidar company, and Changshu Auto Accessories, an integrator of automotive interiors. Huaxing Optoelectronics' first car display product has achieved its first mass production in BYD Han.

Hisense announced in March 2021 that it intends to spend about 1.3 billion yuan to hold Japan's Sanden Holdings Co., Ltd., and the two sides will integrate high-quality resources and exert efforts in the direction of air conditioning compressors and vehicle heat management of new energy vehicles. At the same time, Hisense has many years of layout in intelligent transportation, on-board display technology and core components of body perception, and many of its products have been landed in some cities and demonstration projects in China.

For the failure of past car manufacturing, perhaps Midea itself has also had a profound summary. He Xiangjian, the founder of Midea, famously said: "If there is a crisis in Midea one day, it will definitely not be competitors who will crush us." One of the real reasons is that The United States has made major strategic mistakes. ”

After 18 years ago, after a swarm of chicken feathers in the field of vehicle manufacturing, 18 years later, bet on the development of core components of the car, how much change can be brought to the United States. Whether the end game of Midea's car manufacturing is to open up a new profit track, or can only pay for the complex of manufacturing companies, perhaps the answer will be seen soon.