Car companies should worry about more than just Huawei building cars themselves

Author 丨 Pastoral Song

Editor丨Nuts

Cover source丨Unsplash

In October 2020, Huawei said in an internal document that it would never build a car, and those who wanted to build a car would leave their posts on their own. The document is said to have been personally approved by Ren, and Wang Jun, then president of Huawei BU, reiterated in a later public speech that Huawei would not build cars, but would help car companies build good cars.

But this document is not an immutable iron law, but has a three-year validity period, and by October this year, the document will officially expire. Coupled with the fact that Wang Jun, who had been advocating Huawei's cooperation with car companies, also left recently, rumors about Huawei personally building cars are raging.

For Yu Chengdong, who now has the sole power of Huawei's cars, although these rumors are only speculation, they may also affect Huawei's forward path in the field of smart cars, on February 21, Yu Chengdong personally came forward to clarify that Huawei is not personally building cars, or cooperating through smart selection mode.

With the overall situation of smartphones decided, smart cars have become Huawei's most important base for end users. Although Huawei mobile phones in the past are one of the few domestic brands that can wrestle with the iPhone, this is already the courage of the year, whether it is the current market environment and competitive situation, Huawei's mobile phone business will inevitably enter the trough.

1

The phone is dead, and it's not too late to build a car

According to the market share data of Chinese smartphone manufacturers released by IDC in 2022, vivo (18.6%), honor (18.1%), OPPO (16.8%) occupy the top three positions, while Apple (16.8%) and Xiaomi (13.7%) rank fourth and fifth respectively.

Although the 2022 data given by the other two statistical agencies Counterpoint Research and Canalys are slightly different, the top five mobile phone brands are consistent, all of which are "VO Rongmi" plus Apple's pattern, in 2021, these five brands jointly lead, and for two consecutive years, Huawei is no longer in the first camp.

For industry insiders, such a result is actually not unexpected, from the US ban to the forced split of glory, the script of Huawei mobile phones has been written. Even the Mate 50 series, which will be released in 2022, Huawei cannot make it support 5G.

Coupled with the high-end brand route that Huawei has always adhered to, after losing the blessing of many hardware capabilities, the market competitiveness has declined sharply, and it is difficult to support sales by relying only on Huawei's brand influence.

Such an outcome, while frustrating and indignant, is doomed to be useless in commercial warfare by complaining about the environment. A reality that has to be admitted is that it is difficult for Huawei mobile phones to reproduce the glory moments of the high-end market with the iPhone in previous years, unless the external environment has a major improvement, or the mobile phone industry has the next revolutionary technological innovation.

The market position has declined, and the overall prosperity of the mobile phone industry is also at a low level. According to Counter point, global shipments fell 12% to 1.2 billion units in 2022, the worst annual performance since 2013.

The domestic mobile phone market also suffered a cold winter last year, affected by the epidemic factors and the stagnation of industry innovation, and the total shipment of mobile phones in the domestic market in 2022 was 272 million units, down 22.6% year-on-year.

Whether from the perspective of enterprises or industries, Huawei is not worth making heavy bets in the field of mobile phones. Yu Chengdong, who has single-handedly pioneered Huawei's mobile phone hegemony, also said that the supply chain of Huawei mobile phones has been missing, and the only thing that can make up for the lack of mobile phone sales is smart electric vehicles.

In the past year, Boss Yu has talked more about cars, and most of the remarks out of the circle are related to cars, and Huawei mobile phones no longer seem to be Huawei's most worthy of discussion.

2

Huawei's circle of friends with car companies

As the dual CEO of Huawei's terminal business and intelligent vehicle solution BU, after Wang Jun left office, Yu Chengdong took over the power, but the courage on his shoulders became heavier. In his own words: "I work until 12 o'clock every night, sometimes one or two, and people have two days off on weekends, and I don't have a day." ”

Yu Chengdong is busy with something, of course, still revolves around the car, even this year's New Year back to his hometown in Anhui, Yu Chengdong did not forget to go to the local Huawei automotive showroom to see, by the way, he also talked with the hometown government about the cooperation in the automotive industry.

Last year was the first year of Huawei's smart cars, and the model launched by Huawei and Xiaokang Co., Ltd. has achieved good market feedback, whether in terms of product sales or user reputation, it faintly shows the momentum of Huawei mobile phones in the past.

Unlike cross-border players such as Evergrande and Xiaomi, Huawei has always declared that its smart car route is a "smart selection mode", that is, cooperating with car companies, Huawei empowers through technology.

For the difference between the two car-making routes, Yu Chengdong's interpretation is more straightforward, "The OEM model is that the car factory earns small money, we make big money, now the car factory makes big money, we earn small money, this model is different, we are helping car companies succeed." ”

In addition to the aforementioned Qianjie models, Huawei's smart car camp also includes Cialis SF5, Extreme Fox Alpha and Avita 11, and the circle of car friends covers heavy players such as CATL, BAIC, and Changan.

Recently, the construction of a new energy plant between JAC and Huawei in Hefei has also officially started, which will be used by Huawei and Jiangqi Group to jointly develop a new generation of high-end intelligent electric vehicles.

Yu Chengdong drew a big pie for these partners, Yu Chengdong said: "Huawei's close cooperation with car companies will be the first to become profitable within a year or two, and will become one of the most profitable car companies in China." ”

However, these statements do not completely reassure partners, whether Huawei will personally build cars in the future, I am afraid that it is the knot that troubles many car companies. When an opponent who does not lack brand influence, excellent technical strength, and insight into the entire industry chain of car manufacturing is born, it is not destined to be good news for other players in the industry.

3

In whose hands is the "soul"?

Although Huawei and Yu Chengdong have repeatedly reiterated that they will not personally build cars, this does not mean that Huawei only plays an auxiliary role in the chain of car manufacturing. Since the beginning of cooperation with Xiaokang Automobile, many people have questioned that Huawei is still following the OEM model, especially for the ownership of the "AITO Question" brand, the outside world believes that Huawei is still leading the development and sales.

Yu denied this claim, insisting that the two sides were still "joint development." The reason is that "Huawei does not have the qualification to build cars, nor does it have the personnel to do the whole vehicle, but it provides intelligence, software, chips, design, experience, quality control, etc."

In fact, whether it is foundry or joint development, the core problem is who dominates, which in turn determines who can get more profits from car sales.

According to Yu Chengdong's past statement, Huawei's smart selection model, car manufacturers make a lot of money, Huawei makes a small money, of course, this is a more long-term goal. However, Yu Chengdong has also said that Huawei's automotive business will be profitable in 2025.

However, combined with the example of the question, at present, Xiaokang Automobile is still in the investment period, bearing the high cost of model development, mold proofing, factory transformation and other expenses in the early stage, and it is far from profitable. In the future, if the model can continue to sell, then Xiaokang Auto is likely to achieve what Yu Chengdong said about "making a lot of money".

But after the car makes money, the question of dominance will follow, who has more say, who is stuck in the neck, who will decide how to calculate and match the profit.

For car companies such as Xiaokang Automobile, which is not a mainstream one, it may be able to accept Huawei's "joint development", but for other car companies, there are certain risks in handing over all high-precision core technologies to partners.

SAIC Chairman Chen Hong once had a classic "soul theory", Chen Hong believed: "It is unacceptable for SAIC to cooperate with a third-party company such as Huawei for autonomous driving." In this way, it becomes the soul, and SAIC becomes the body. SAIC wants to take the soul into its own hands. ”

In the new energy vehicle market, there are not many car companies whose "soul" is completely in hand, and in addition to BYD, I am afraid that no other player in China can boast about Haikou.

Especially in the core battery field, because many car companies do not have production capacity, they can only purchase from third parties. However, with the price increase of upstream battery manufacturers last year, many car companies were forced to hand over the already not very lucrative profits. The chairman of GAC Group even bluntly said in public that he was actually working for CATL.

Whether such a story will appear in Huawei and partners cannot be answered definitively, but for car companies, this should also be a hidden risk worth alerting to.