21st Century Business Herald reporter Ye Bihua intern Ni Shiting Guangzhou reported that on February 16, Midea's new energy auto parts base with a total investment of 11 billion yuan was laid in Anqing Yuanmeng New District, becoming the largest total investment project in the group's history.
At a time when the home appliance track is becoming increasingly saturated, home appliance companies including Midea, Gree, Hisense and other home appliance companies have set their sights on new energy vehicle-related industries to seek new momentum for their own development. At the same time, the new energy automobile industry, which is breaking the boundaries of the traditional supply chain, has also allowed home appliance companies to see the opportunity to enter the game.
Re-add auto parts
It is understood that of the total investment of about 11 billion yuan in Anqing new energy automobile parts base, the fixed asset investment is about 6.5 billion yuan, and the land used in the first phase of the project is 458 mu, which can form an annual output of 60 million sets of production capacity after completion, and achieve an annual output value of 40 billion yuan. It mainly produces power steering motors, electric compressors for new energy vehicles, new energy vehicle drive motors and other categories of products, and has built three major system research and development centers and national laboratories for thermal management, main drive, auxiliary/intelligent driving.
This is another strategic layout of Midea in the field of auto parts after investing in the establishment of Anhui Welling Auto Parts Co., Ltd. According to Qixinbao information, Anqing Welling Auto Parts Co., Ltd. was established on January 12, 2022, with a registered capital of 200 million yuan and legal representative Chen Jintao, a wholly-owned subsidiary of Anhui Welling Auto Parts Co., Ltd.
Fang Hongbo, chairman and president of Midea Group, has publicly stated that the industrial layout of new energy vehicles is a very important strategic direction for the future of Midea. As early as 2018, Midea began to lay out automotive main drive motors, automotive air-conditioning compressors and other industries, and in 2018 and 2019, Guangdong Welling Auto Parts Co., Ltd. and Anhui Welling Auto Parts Company were established successively. In 2020, with the acquisition of Hekang New Energy, Midea officially entered the new energy automobile industry. The construction of the new base in Anqing is expected to further expand Midea's territory in auto parts.
Chen Jintao, general manager of Midea Welling Auto Parts Company, said in a previous interview with the media that Midea's auto parts business mainly revolves around three aspects: electric drive system, thermal management and intelligent driving execution and control system. Among them, automotive heat pump products have been used in the whole line of Xiaopeng Automobile, Weilai ES6 and ES8. However, the current sales scale is not much, according to Midea group vice president, Midea industrial technology president Fu Yongjun revealed that in 2021, the sales scale of Midea's auto parts product line is tens of millions of yuan.
This year, Midea's auto parts business will officially usher in the "take-off" inflection point. In addition to the newly opened Anqing base, Midea Meiren Semiconductor, which entered the field of automotive chips in 2018, also began mass production of MCU control chips last year. According to Liu Kai, general manager of Meiren Chip Company, the annual output of the chip in 2021 is about 10 million, and it is expected to reach 80 million this year.
According to the "333 Strategy" previously proposed, Midea has focused on core components in the past three years, focused on integrated components in the next three years, and then committed to becoming a system-level solution provider for new energy vehicles in the next three years. "Our goal is to break into the supply chain system of half of the world's mainstream new energy vehicle customers." Chen Jintao said.
In the field of new energy vehicle components, Midea will form six major R&D centers in the world, coupled with the strategic layout of the two major production bases in Hefei and Anqing, and will invest 1 billion US dollars in technical research in the next ten years.
Home appliance giants have turned around to "build cars"
At the end of 2020, Midea will re-divide its business structure from four major segments of consumer appliances, HVAC, robotics and automation systems, and innovative business to five major business segments: smart home business group, mechanical and electrical business group, HVAC and building business unit, robot and automation business unit and digital innovation business. In December last year, the former Midea Mechanical and Electrical Business Group was renamed "Midea Industrial Technology".
Fu Yongjun told the 21st Century Business Herald that the name change is based on the development needs of enterprises. According to its disclosure, at present, Midea's industrial technology is divided into four major business segments, namely consumer appliances, intelligent transportation, industrial automation and green energy. Over the past five years, the business group has been expanding its new industrial layout and business boundaries, and the core components of automobiles are the focus.
According to AOWEI Cloud Network (AVC) data, from January to November 2021, the cumulative retail sales of the mainland home appliance market was 702.2 billion yuan, an increase of 4.9% year-on-year. However, compared with the same period in 2019, it is still down 7.4 percentage points, although the stable and sustained recovery of the economy in 2022 is a foregone conclusion, but the consumer side is expected to continue to be under pressure.
The traditional home appliance industry has entered the stage of stock competition, the overall growth rate of the industry has declined, and it seems that devoting itself to the new energy automobile industry has become the only choice for home appliance giants. In March last year, Hisense spent 1.3 billion yuan to acquire Japan's Sanden Holdings to enter the field of automotive electronics. In September, Gree, which had "lost touch" with Yinlong, finally won the controlling right of Yinlong New Energy through bidding. In addition, home appliance giants including Skyworth, TCL, Haier and other home appliances have also accelerated the layout of the new energy industry, and most of them use parts as the entry point, which is worth thinking about.
On the one hand, compared with home appliances, the growth rate of new energy vehicles is strong. According to the data of the Association of Passenger Vehicles, the retail sales of new energy passenger vehicles reached 475,000 units in December last year, an increase of 128.8% year-on-year and 25.4% month-on-month; in 2021, the retail sales of new energy vehicles reached 2.989 million units, an increase of 169.1% year-on-year. The industry generally believes that under the strategic goal of "carbon peaking and carbon neutrality", electrification and intelligence are the development trends of the automobile industry. It is estimated that domestic new energy vehicle sales are expected to exceed 5 million units in 2022 and expand to 30 million units by 2030.
On the other hand, automobile manufacturing and home appliance manufacturing have a lot in common, which makes home appliance companies have the industrial advantage of cutting into the automotive field. Some analysts pointed out that the current automobile market is not limited to the traditional mechanical part, but also pays more attention to software and technology, and home appliance companies have rich applications in the field of electronic products and software.
In addition, new energy vehicles are different from traditional cars, taking the thermal management system as an example, the giant pattern of the thermal management industry of traditional automobiles has been formed, but the thermal management system of new energy vehicles is more complex and more demanding, and its bicycle value is also multiplied than that of fuel vehicles. "It is precisely because of the fundamental changes in the thermal management technology of new energy vehicles that Midea has the opportunity to participate in it and reverse the competitive pattern of the industry." Chen Jintao said.
"In the development of new energy vehicles in the world, China is actually ahead. However, many key core components do not yet have Chinese players, which requires us to use the accumulation in the home appliance industry to do horizontal expansion, not only for their own development, but also for the industry to create a better quality, responsive, and better supply chain. Fu Yongjun said.
The market expects that by 2025, the market size of electric drive, thermal management and intelligent driving in China will exceed 100 billion yuan, and the global market size will exceed 300 billion yuan. Home appliance companies cut into the new energy vehicle track, or will reap rich profit returns.
But this "crossover" is not without its challenges. In the automotive field, main engine factory resources, technical strength, ecological construction and empowerment, home appliance companies do not have advantages. At the same time, as a new entrant, home appliance companies need time to establish customer recognition. "The development speed of new energy vehicles is very fast, and this time cannot wait." Fu Yongjun said frankly that from the home appliance industry to the automotive industry, there are not many challenges. Whether home appliance companies can switch through the track and find new business growth poles still need to wait and see.
![Registered capital of 200 million yuan! Midea Group invested in the establishment of an auto parts company[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)