Whether Huawei will personally "build cars" in the future has always been a hot topic in the automotive industry. Although Huawei currently adopts cooperation models such as "HI ecosystem" and "Huawei Smart Choice" in the automotive business, and has repeatedly stressed that it will not "build cars", the doubts of the outside world have never disappeared.
On February 22, Yu Chengdong, executive director of Huawei, CEO of the terminal business, and CEO of the intelligent vehicle solution BU, reiterated in an exclusive interview with the media that "Huawei does not build cars". At the same time, Yu Chengdong also made a comprehensive analysis of the current strategic direction of Huawei's automotive business, as well as the profitability of Huawei's smart car business, HI model, and car BU business.
Huawei's three major cooperation models for automotive business
Since May 2019, Huawei's smartphone and telecommunications business has been greatly affected by the continuous sanctions imposed by the United States, coupled with the forced sale of the Honor brand, Huawei's smartphone business, which originally accounted for more than half of its revenue, has declined significantly. In this context, Huawei has continuously increased its investment in the automotive field that is "less affected by the ban" in recent years, hoping that the automotive business can become a new growth engine for Huawei. Compared with the huge shipments of hundreds of millions of units in the smartphone market, although the automobile market has limited shipments, the unit price is much higher than that of smartphones, and it has a high gross profit margin.
It should be pointed out that Huawei's automotive business currently has three main cooperation models: one is to simply sell parts and components business; The second is the "HI model", which provides overall intelligent vehicle solutions for car manufacturers; The third is the "smart selection model", that is, Huawei is deeply involved in car manufacturing, and Huawei's marketing and sales channels will also participate in selling cars.
Yu Chengdong said that Huawei used to do parts model, and wanted to become an automotive electronics supplier such as Bosch and Mainland to do standardized components, but intelligent components need to be constantly iterated, need to be constantly upgraded and developed, and need the success of car manufacturers to succeed. Therefore, "HI mode" and "smart selection mode" are the main cooperation directions of Huawei.
"HI" (Huawei Intelligent Automotive Solution) is Huawei's intelligent vehicle solution brand officially released on October 30, 2020, bringing a full-stack automotive solution, including one computing and communication architecture, five communication systems (intelligent cockpit, intelligent driving, intelligent networking, intelligent vehicle cloud services, and intelligent electric), and more than 30 intelligent components (including millimeter-wave radar, lidar, camera, and other components). Subsequently, on November 14, 2020, Huawei, Changan Automobile, and CATL announced that they would jointly build the high-end intelligent car brand Avita.
The cooperation between Huawei and Avita is based on the "HI model", which is led by car manufacturers, and Huawei provides the underlying intelligent vehicle solution. The bottom layer of the intelligent cockpit is made by Huawei, and the decision-making and product experience of the product are mainly made by the car manufacturer. The future direction also depends on the capabilities of car manufacturers, because it is mainly car manufacturers and supplemented by Huawei.
On April 19, 2021, Huawei announced that it has reached an in-depth cooperation with Cialis, a new energy brand owned by Xiaokang Co., Ltd., to deeply integrate technology, products, and channels, empower each other, and provide users with high-performance and intelligent mobility solutions. At the press conference, the first co-branded product jointly created by the two parties, Cialis Huawei Smart SF5 (hereinafter referred to as "SF5"), was officially launched, with a price starting from 216,800 yuan. New cars can be booked simultaneously at Cialis Experience Center, Cialis Official App, Huawei Experience Store, and Huawei Mall. This is also the first time that Huawei Smart Select has added a new automotive category. Later, Huawei cooperated with Cialis to launch a number of "AITO" brand cars (M5, M7).
The cooperation between Huawei and Cialis is based on the "Smart Selection Model", especially the "AITO Question" brand jointly launched by the two parties, which is also a model for the "Smart Selection Model". Huawei is deeply involved in R&D, not only providing related components, but also controlling design, quality, user experience, overall quality control, OTA version upgrades, etc., and also providing strong assistance in marketing, channels, and sales.
"Smart car selection is our responsibility, here we use our ability to C, HI side is dominated by car manufacturers, the two sides of the model is different." We want both sides to rise up, and we are all fully supportive. Yu Chengdong said.
Huawei will not "build cars", and the boundary is Huawei's ecological car
Recently, the advertisement of the cooperative model between Huawei and Cialis was also marked with the logo of Huawei, which speculated that Huawei may personally build the car.
In this regard, Yu Chengdong said, "This is an advertisement issued by Huawei, of course, it must have Huawei's logo, this is normal behavior, everyone is a little sensitive." ”
"The car factory already has this ability, why should we build another factory and build our own cars?" No need. China's automobile factories are very idle, we make full use of idle assets, is the greatest protection of social resources, car factories make a lot of money, we make small money. Yu Chengdong again denied that Huawei would personally build the car.
Yu Chengdong explained that Huawei is a communications company. Electrification, intelligence, and connectivity are the new three modernizations, all of which Huawei is best at, and automakers are good at machinery. Huawei has nearly 10,000 R&D personnel to make intelligent software, which can save a lot of money for car companies. Huawei will not build Huawei-branded cars, and AITO is a Huawei ecological car. This ecological brand is the ecological brand led by Huawei. "Huawei wants to build an ecological alliance, and by establishing the Qijie Ecological Automobile Alliance, select a few car companies to join, join forces, and jointly develop to create the ultimate experience, do a good job in product differentiation, and jointly seize the time window for the transformation of the automotive industry."
Cialis is not a Huawei foundry
Regarding the cooperation with Cialis, Yu Chengdong said: "We and Cialis are long-term cooperation, by no means OEM, but a joint development model, and the main benefits are also shared with car manufacturers. However, the car factory is now in the investment period (the early model development, research and development costs, mold costs, factory renovation, construction costs are very expensive), a little loss, I believe that the car factory will soon turn a profit, and the future will be very profitable. These car companies that we work closely with will become the most profitable car companies in the future. This is where the foundry model and the joint development model are completely different. ”
According to the 2022 performance forecast released by Cialis on the evening of January 30, after preliminary calculations by the financial department, it is expected to achieve operating income of 33.5 billion yuan to 35 billion yuan in 2022, a significant increase of 100.38% to 109.36% year-on-year; Net profit attributable to owners was -3.950 billion yuan to -3.500 billion yuan, and net profit after deduction was -4.300 billion yuan to -3.850 billion yuan, which increased year-on-year losses.
It is understood that AITO, which is cooperated by Huawei and Cialis, sold 75,000 units last year. Yu Chengdong said that it is still in the investment period, and when it stabilizes, it will take the lead in profit.
"Huawei cooperated with Cialis to make three cars in more than a year, and no one in the world is so fast." "We work weekends, nights, evenings, holidays, and we work in shifts and fight in parallel." Yu Chengdong said that he has been working as customer service in his spare time.
Yu Chengdong revealed that Huawei's investment in Cialis has not decreased, but is increasing, and stressed that in the smart selection mode, the biggest beneficiary must be the earliest cooperation with Huawei, the deepest accumulation, and the richest product models.
"AITO has sold more than 70,000 a year, and has created miracles, walking the road that others have traveled for 3 or 5 years. We now continue to sell M5 and M7, and in the future we will release a more expensive, high-end intelligent assisted driving version, which is equivalent to adding a model, and will launch very high-end, high-specification and high-experience products at the ceiling level in the future in the future. I focus on NPS, which is the Net Promoter Score, and our referral score is more than 70, and the industry level is about 40. I believe that our cooperation model (smart car mode) will make others go from not being able to see to not understand, and finally making them unable to catch up. Yu Chengdong is very confident about the future of the smart car model he personally operated.
Huawei and JAC cooperate using the smart selection model
On February 16, China State Construction Group officially announced that the construction of JAC and Huawei's new energy plant officially started, with a project construction period of 365 days, or one year. After completion, it will be used to jointly develop a new generation of high-end intelligent electric vehicles in Hefei between Huawei and Jiangqi Group. As a result, there have been rumors that Huawei will join hands with Jianghuai Motors to "build cars".
In this regard, Yu Chengdong said, "Huawei will not build cars by itself, but will cooperate through the smart selection model." ”
Help car companies sell enough 1 million vehicles, Huawei car BU can make a profit
Regarding the profitability of Huawei's automotive business itself, Yu Chengdong said, "At present, Huawei has no loss and no profit in this piece of Zhixuan." Because the bulk of the profits are still on the side of the car factory, "Huawei does not take money for many things, it is given to retailers, as well as our marketing and service costs." ”
Yu Chengdong previously proposed at Huawei's internal meeting that Huawei's car business is expected to be profitable in 2025. Yu Chengdong said in this interview that Huawei first helps car companies sell 1 million cars, and the car BU can be profitable. "We hope that the amount of smart selection and HI mode can be up, and the amount of smart selection may be larger. Either way, we can do it. ”
In terms of sales channels, Yu Chengdong said, "Huawei will not blindly expand sales channels, but will optimize and upgrade," and we will not increase stores on a large scale, we will improve the capacity of stores, and even close some stores. ”
Don't do cars under 200,000, high-end experience is king
Regarding the market positioning of Huawei's automotive business, Yu Chengdong said that Huawei mainly does mid-to-high-end products, which will not involve the market below 200,000 prices, and hopes to expand the new energy vehicle market together in the future.
Previously, Yu Chengdong said that in the field of vehicles, Huawei invests a lot, investing nearly 10 billion yuan a year, including software, hardware, chips, algorithms and other fields. Of course, our dream is that all cars on the road have Huawei's technology in them, and low-end cars can sell a lot of money, but there is no point. Yu Chengdong stressed that Huawei must do a good job in high-end, Hongmeng cockpit is called the best intelligent cockpit by consumers, and the user experience is very smooth.
For automotive experience, Huawei's Hongmeng cockpit not only brings the Hongmeng system, but also product definition capabilities, customer needs grasp capabilities, and user operation capabilities.
Specifically, Huawei has achieved whole-process participation from the underlying system to UX design to function definition, not only with the HarmonyOS basic platform, but also with Huawei's UIUX human-computer interaction, HarmonyOS distributed capabilities, HarmonyOS intelligent capabilities, Huawei in-vehicle smart screens, and HUAWEI SOUND car audio systems, which are the six essences of HarmonyOS intelligent cockpit.
For example, after the owner gets into the car, the navigation of the mobile phone can automatically flow to the car, thereby liberating the mobile phone. Second, Super Desktop turns the app on the phone into a part of the smart cockpit app, and uses it up and goes, leaving no trace. All in all, the Harmony cockpit breaks the boundaries of the cockpit and connects smart devices such as mobile phones and watches.
"In the past ten years of doing terminals, we have accumulated a lot of To C capabilities, and creating a high-end experience is the core." Yu Chengdong said.
Automakers that work closely with Huawei will survive
In Yu Chengdong's view, the current global automotive industry is being reshuffled, just like the mobile phone industry more than a decade ago, the reshuffle of the mobile phone industry is finally dominated by Silicon Valley companies and Chinese companies in the United States, as well as one in South Korea. In the end, the automotive industry may also be left with only Silicon Valley companies and Chinese companies.
"In the future, many companies will definitely merge and adjust, and a large number of people may die." I believe that the manufacturers who work closely with us will become a few survivors. I'm still confident in that. Yu Chengdong said: "However, we can also see that Huawei has encountered many problems, and the requirements for selling mobile phones and cars are completely different, and we are adjusting." Without this ability before, this is also a new phenomenon and a new problem, which we did not know before. ”
At present, the intelligent upgrading of various parts of the car is the core of the future competition between China and American car brands. Yu Chengdong believes that the next 2-3 years is the window period of intelligent networked vehicles, if not seized, the future market will have nothing to do with Huawei, so we must seize the opportunity.
"We used to do parts and components, and the traditional model was basically internal adjustment, so we had to do it through ecological brands. Just the HI model is not enough, because the HI model is dominated by the car factory, depending on the ability of the car factory, the car factory can be strong and OK, and the car factory is not strong enough to die. The smart selection model, the model of the ecological brand, is that we control our destiny, and we are responsible for the success of the products of car companies. If it doesn't work, what's the use of my parts? We first have to help the depot succeed, we can't succeed if the depot can't succeed, the window of these two years is very important, if you miss this village, you won't have this store. ”
Yu Chengdong said that through Huawei's leadership, an ecological car brand can be pulled through, such as multiple manufacturers sharing a set of battery packs, production capacity, output up, motor solutions, layout solutions, cockpit solutions, intelligent driving solutions, Huawei can pull through. Reducing the cost of repeated customization can greatly improve efficiency and increase the yield of a single product.
"You can't beat one person, you have to fight several brothers together, which is why we formed the ecological alliance." I believe that the car companies that cooperate most closely with Huawei will be the few companies that can survive to the end. Yu Chengdong said.
Editor: Xinzhixun - Ronin Sword