Recently, according to a number of media quoted informed sources reported that Didi's car-making plan code-named "Da Vinci" will be announced in June this year, the car-making plan will initially be for the passenger car and online car market to create two models, of which, the passenger car market model will be named C1, positioned at 150,000 yuan compact pure electric car; the model for the online car is D1 Light, the car is a lean version of D1, will continue to be produced by BYD OEM. In the future, it will be invested in its flower piggy taxi platform.
This is another major move to adjust the business line after Didi was laid off by 20% at the beginning of this year. After this news was exposed by the media, Didi, which has always been in the whirlpool of public opinion, once again became the focus of attention inside and outside the industry. So, did Didi, who had previously officially declared that "resolutely do not build cars", get involved in car building at this time? This also starts with its current financial situation.
The loss margin widened, and Didi was forced to seek other profit points
The past year has undoubtedly been a difficult year for Didi, as evidenced by its unaudited earnings for the second and third quarters of 2021 disclosed at the end of last year. According to the financial report data, Didi's net loss expanded from 24.271 billion yuan in Q2 2021 to 30.375 billion yuan in Q3. In Q3 2021, Didi's total revenue was 42.675 billion yuan, down 11.48% from Q2, of which the revenue of China's travel sector was 39 billion yuan, down 19% month-on-month, and the revenue was 1.7 billion yuan relative to Q2, and Q3 lost 0.17 billion yuan.
According to the division of business operations, Didi's current business scope covers China's travel business, international business, bicycle sharing, freight, autonomous driving, financial services and other businesses. Among them, China's travel business, including online ride-hailing, taxis, substitute driving, hitchhiking, etc., is the largest part of Didi's existing business revenue contribution, and this part of the business loss directly leads to the limitation of Didi's profitability.
The profitability of Didi China's travel business is limited, and the main factor behind it cannot fail to mention the removal of the "Didi Chuxing" APP. In July last year, Didi was forcibly removed from the "Didi Chuxing" APP by the Cyberspace Administration of China for suspected illegal collection and use of personal information. After the incident, on the one hand, Didi could not obtain new customers in the domestic online ride-hailing market, on the other hand, other online ride-hailing platforms such as T3 Travel, Cao Cao Travel, etc. took the opportunity to increase preferential efforts and cannibalize Didi's original market share through "price war". In the case of not being able to obtain an increase, while the original market share is diluted, Didi's life is obviously not good.
Image source: Didi Chuxing
Relevant data show that Didi's current average daily order volume has dropped from 25 million to 20 million, a decline of nearly 20%. At the same time, its U.S. stock price has also fallen from the issue price of $14 per share to the current $4 or so, and its market value has shrunk from $67.8 billion at the beginning of the listing to the current $19.3 billion, a decline of more than two-thirds.
Didi's U.S. stock price on March 18, image source: Screenshot of Oriental Fortune Network
The increase in losses and the sharp contraction of market value have prompted Didi to implement self-help by laying off employees and slimming down. Not long ago, Didi's layoff plan was exposed by the media, and its scope of layoffs involved travel-related businesses such as online ride-hailing, two-wheelers, and freight, and only the international department and the autonomous driving department were not involved. An industry analyst said that Didi has not given up the autonomous driving department that requires heavy investment in the case of huge losses, and is largely optimistic about the future development prospects of automatic driving and its profitability.
However, as smart electric vehicles become the mainstream of the future, more and more automakers have joined the field of automatic driving, and the use of self-developed automatic driving systems in future automotive products is regarded by traditional car companies as the "soul" in their own hands, which brings many uncertainties to the commercial application and profitability of third-party autonomous driving technology. In this case, personally building a car can, on the one hand, the self-developed automatic driving technology can be well landed, on the other hand, it can also maximize the profit of the car software part.
Analysts pointed out that Didi car manufacturing, there are external factors, but more is based on the adjustment of its existing business model, after the main business sharing travel due to compliance issues development blocked, Didi urgently need to seek other profit models, and cut into the car-making track, but also conducive to Didi from the US stock delisting smoothly into hong Kong stocks to increase chips.
The United Nations wit Jun, Didi car to force the C-end market
For car manufacturing, Didi has participated in many projects in recent years, or has accumulated some experience as a result. According to public information, as early as 2018, Didi reached a strategic cooperation with Ideal Automobile, and the two sides jointly invested 400 million yuan to create "Orange Electric Travel", of which Didi held 51% of the shares and Ideal Automobile held 49%. After the cooperation was reached, the two sides jointly developed a pure electric MPV, which was tailored for some of Didi's businesses, but the project was stalled for other reasons. After the "Orange Electric Travel" project was shelved, Didi sought cooperation with BYD, and BYD oem produced the D1 electric vehicle. This car is based on the needs of passengers and drivers on the Didi platform, and is also the first customized electric vehicle of Didi Chuxing.
The D1 electric vehicle jointly built by Didi and BYD, image source: Didi Chuxing
Judging from the car-making projects that Didi has previously cooperated with automakers, most of its roles are data and information providers, and the areas it has entered are only limited to customized models in the online ride-hailing scene. Nowadays, Didi personally built cars, cutting into the B-end market, as well as passenger cars for the C-end. According to people familiar with the matter, the C1 project for the C-end product will be responsible for Didi's veteran employee Rowan, reporting directly to Didi CEO Cheng Wei. At the same time, it is reported that in order to obtain car manufacturing qualifications as soon as possible, Didi intends to acquire new energy vehicle manufacturer Guo Jizhijun. For the news, some netizens asked For Verification from China National Machinery Automobile on the shanghai e-interaction, and the answer was that "china machine wisdom jun is in contact with a number of enterprises in the industry to seek suitable strategic investors." In addition, the domestic media quoted insiders of Guo Ji Zhijun as saying that the possibility of Didi acquiring Guo Ji Zhijun is relatively large, and perhaps there will be results at the end of this month, and employees are currently waiting for follow-up arrangements.
China National Machinery Automobile replied to the questions of netizens, picture source: SSE e interactive platform
According to public information, Guoji Zhijun was established in 2018 and is controlled by China National Machinery Group. In 2019, Guoji Zhijun officially obtained the production qualification, and then built a production base with an annual production capacity of 100,000 vehicles in the Economic and Technological Development Zone of Ganzhou City, Jiangxi Province. In April 2019, Guoji Zhijun unveiled five new pure electric vehicles covering the field of cars and SUVs at the Shanghai Auto Show, three of which were launched in October 2019. According to the statistics of the Association of Automobile Associations, since the launch of new products in 2019, the three models of Guoji Zhijun have sold 4560 vehicles in 2020, and sales have fallen to 1840 vehicles in 2021, with sales of 63 in the first two months of this year. Judging from this sales data, Guo Ji Zhijun is being rapidly marginalized among the new forces of car manufacturing. Analysts at the Gaz Automotive Research Institute pointed out that "for Guo Jizhijun, after the stagnation of products and research and development, the direct consequence is that the factory production capacity is idle, and the operating situation has taken a sharp turn for the worse, in which case being acquired or introducing stronger investors is the best way out." ”
However, even if the successful acquisition of Guo Jizhijun, who has car-making qualifications and car-making capabilities, it is not easy for Didi to build a car in the next scene. Some analysts pointed out that Didi has certain experience accumulation and technical reserves in the B-end market and the field of automatic driving, but lacks the ability and experience in vehicle design, manufacturing and other aspects, while Guojizhijun itself belongs to a weak car company, and its own ability in design, research and development and core technology is insufficient, and it is difficult to launch competitive C-end products in a short period of time.
In addition, as more and more traditional multinational car companies accelerate their transformation into the field of new energy, the time window period left by China's new energy vehicle market to traditional independent brands and new car-making forces has not been much left, and a new brand to the market must go through a long run-in period before it can be accepted by users, such an external environment is extremely severe for any new brand that cuts into the car-making track at this time. Further, after the complete withdrawal of state subsidies, domestic new energy vehicles will be completely driven by the market, at this time consumers often choose brands with strong technology and product endorsement, and didi completely cut into the car-making track, the first issue to consider is probably how its C-end products can withstand the market test.