Huawei Yu Chengdong joins the Xiaomi car manufacturing team? Xiaomi responded: fake

On April 5, the market rumored that Yu Chengdong, president of Huawei Device Company, will go to Xiaomi Auto to work. In response to this news, the head of public relations of Xiaomi Group told First Finance and Economics that the news was untrue.

According to Huawei's official website, Yu Chengdong was born in 1969 and graduated from Tsinghua University with a master's degree. He joined Huawei in 1993 and has served as Director of 3G Products, Vice President of Wireless Product Marketing, President of Wireless Product Line, President of Europe Area, and President of Strategy and Marketing. He is currently the CEO of Huawei Device BG, CEO of Intelligent Vehicle Solution BU, and Director of IRB of Intelligent Terminal and Intelligent Automotive Components.

At the beginning of this month, AITO Auto used the new slogan "HUAWEI Qianjie" for the first time in the promotion of Weibo, WeChat and other platforms. Since then, almost all of Huawei's offline stores have affixed the "HUAWEI Question" logo on the AITO car body, and offline channels have also used this as a key promotional phrase in sales to highlight Huawei. However, on March 31, Huawei issued an internal document to emphasize again that "Huawei does not build cars", and the document is valid for 5 years. In addition, Huawei has strict requirements for body markings, proposing that "HUAWEI AITO" cannot appear in vehicle promotion.

Subsequently, Yu Chengdong also responded to this resolution at the 100 people meeting.

"In the past two days, our company has issued a resolution to remove the Huawei logo, and the result is now hyped in the media. In fact, we originally hoped to use Qianjie as a cross-border cooperation brand, so we added 'Huawei' in front of it. Yu Chengdong said that Huawei has always insisted on not building cars, and the reason why it is called Huawei is to become an ecological brand, so that consumers will not be confused when choosing.

Xiaomi's car manufacturing is mainly based on "old subordinates"

For the news that Yu Chengdong joined Xiaomi, the head of public relations of Xiaomi Group denied it. From the perspective of the team composition of Xiaomi Automobile, it is mainly based on Xiaomi's "old subordinates".

According to the reporter's understanding, Xiaomi Automobile was approved in March 2021 and settled in Beijing Economic and Technological Development Zone in November of the same year, building a vehicle plant in two phases, each with an annual production capacity of 150,000 vehicles, and the first phase of the project is expected to be completed in June this year and officially mass-produced in the first half of 2024.

In terms of management structure, Xiaomi Auto is composed of two parts: the senior management of Xiaomi Group and the executives of external car companies. In a picture of Xiaomi's "17 members of car manufacturing" circulated in the industry before, the main force is composed of old employees of Xiaomi Group, in addition to Lei Jun, there are Lin Shiwei, CFO of Xiaomi Group, Zhang Feng, Xiaomi partner, Liu De, etc. Executives brought in externally include Li Tianyuan, former BMW i brand exterior designer, Yu Liguo, former president of Beiqi Extreme Fox, and Hu Zhengnan, president of Geely Research Institute. At present, Hu Zhengnan is an external investment partner of Shunwei Capital.

At the Xiaomi Investor Day in February 2023, Lei Jun, chairman and CEO of Xiaomi Group, said that Xiaomi will invest more than 3 billion yuan in new businesses such as automobiles in 2022 alone, with an automotive research and development team of more than 2,300 people, and Xiaomi Auto's goal is to enter the world's top five in 15-20 years, and revealed that he has devoted half of his time to building cars.

But in late February this year, it was reported that Zhou Ju, the head of Xiaomi's car marketing, had left for several weeks, only 7 months from joining last year to leaving. In response to this news, Xiaomi recently responded that Zhou Ju has left his post and called his departure "personal and family reasons."

According to public information, Zhou Yu joined SAIC-GM-Wuling in 2011 and successively served as the director of the marketing center of SAIC-GM-Wuling Sales Company and the deputy general manager of SAIC-GM-Wuling Business Unit. In August 2022, Zhou Yu officially joined Xiaomi Auto as the head of marketing, reporting directly to (CEO) Lei Jun.

Xiaomi's 2022 financial report shows that in 2022, Xiaomi's overall operating expenses will be 42.5 billion, a year-on-year increase of 9.2%; Operating expense ratio increased by 3.3 percentage points year-on-year to 15.2%, mainly due to continuous investment in R&D expenses. In 2022, Xiaomi's R&D expenses will reach 16 billion, a year-on-year increase of 21.7%; The R&D expense ratio reached 5.7%, mainly due to the increase in R&D expenses for innovative businesses such as smart electric vehicles throughout the year.

At the earnings call, talking about the current new energy vehicle price war, Lu Weibing, partner and president of Xiaomi Group, said that the current progress of Xiaomi's car manufacturing is in line with expectations, so the industry price war issue does not have much impact on Xiaomi. As for the competition in the market, Lu Weibing said that Xiaomi cars are still some time away from the future listing, and will be adjusted accordingly according to the market situation.

After Huawei's "no car" decision, there was noise

For the news that Yu Chengdong joined Xiaomi, people close to Yu Chengdong told reporters that it was impossible.

"There may be opportunities like this when things are going well, but right now the consumer business is in difficult times, so going out is unlikely to be possible for individuals to suffer damage to their operating profits and reputation." The above person said.

For a long time, in Huawei's senior management team, Yu Chengdong has attracted much attention because of his straightforward personality.

"I'm not modest at all, everyone calls me Yu Dazui and says I love to brag, but every time I brag, I can overachieve. Some people once said that I was so happy, and the outside world also rumored many times that I was going to leave class. Yu Chengdong once said in an interview with First Finance and Economics that in the face of dissent, in his hands, Huawei terminals are either gone or done, and there is no third way.

Before Huawei officially entered the mobile phone market, how to balance the relationship between carrier channels and social channels was also one of the points of internal debate at Huawei. Because Huawei has been engaged in the operator's communication equipment business for a long time, it implements the strategy of bundling operators, resulting in a serious shortage of coverage of Huawei's own channels and social channels. In Huawei's mobile phone sales in 2011, 65% were still customized or bundled based on carrier channel sales, and only 35% were distributed through retail channels.

At that time, Yu Chengdong spent three years cutting Huawei's ultra-low-end models that mainly targeted the carrier market, and began to incubate Honor for the cultivation of e-commerce channels. "In order to develop users, operators only hope that Huawei will make ultra-low-end products and change products in an average of 3 months. In addition, some operators cut down settings such as flash because of cost and price factors, but for consumers, the desire to buy is greatly reduced, and eventually the product is unsold. Yu Chengdong once told reporters that when Huawei decided to invest in e-commerce, operators and Huawei's brothers in charge of the relevant market expressed dissatisfaction. For him, the path he has experienced in the past few years, several transitions have been difficult, and there are many internal resistance and different voices.

At that time, born out of Huawei's B2B gene, the terminal business experienced a conflict of inertial thinking. And the situation of the car track now, in front of Yu Chengdong, is not easier than the situation at that time.

At the 100-person meeting, Yu Chengdong said that when Huawei entered the automotive field, it wanted to become a parts supplier in this field, similar to another Bosch and Continental, but in today's era, it seems that this condition is not very true.

Talking about the reasons, he said that Huawei is not doing standardized components such as brakes, steering, and automatic like Bosch and Continental, but soft things such as software, algorithms, clouds, and chips, and these intelligent things are difficult to sell on a large scale like standardized components, and what is needed is deep involvement with car manufacturers and continuous iteration.

Yu Chengdong said that under the huge investment, if there is no good sales of cars that can use Huawei's intelligent solutions in large quantities, Huawei cannot achieve a closed commercial loop. In his view, Huawei is good at intelligence, electricity, networking, software, algorithms, and chip capabilities. In terms of software-based driving, it is exactly what car manufacturers are not good at, so Huawei can achieve very good win-win cooperation with car manufacturers, "helping our partners succeed, we can achieve indirect success." He cited the cooperation with Cialis as an example, which sold 75,000 units in half a year.

In addition, in addition to Cialis, Huawei will soon have Chery, BAIC, and Jianghuai will also produce cars equipped with Huawei's complete set of solutions, if each car has an independent brand, it will be difficult in marketing. Therefore, in early March, it was decided to brand the Huawei logo on the cars in Huawei stores in marketing.

However, from Huawei's several adjustments to the automotive business in the past two years, it can be seen that the profitability pressure of the automotive business has gradually emerged. From the data in this financial report, it can be seen that compared with the revenue of 40 billion and 50 billion yuan of other emerging businesses, the revenue of intelligent automotive solution components business is only 2.1 billion yuan.

In addition, according to Huawei's financial report, since the establishment of the intelligent vehicle solution BU, Huawei's cumulative R&D investment has reached 3 billion US dollars.

Former Huawei executives told reporters that the original setting of BU meant that Huawei would not make independent profit requirements for a business with greater potential in the short term, but at present, Che BU has been established for three years, and the urgent problem to be solved is how to make money. "The HI model may be difficult, but maybe it's the long-term way. But at present, Huawei's manpower model does not support this low-margin business. The executive raised his concerns with reporters.

However, from the current point of view, the statement of Huawei's top management has clarified Huawei's attitude on the automotive track.

Xu Zhijun, Huawei's rotating chairman, said at the earnings conference, "Recently, we have indeed abused the Huawei brand by some departments, individuals, and some partners, and we have been investigating and dealing with it, and the brand that Huawei has built for more than 30 years will not be abused at will, Huawei has not built cars, nor does it have any brand of cars." In the latest document, it is clear that the Huawei brand is strictly prohibited from appearing in front of the car brand, or as a car brand. ”

"Everyone pays attention to the validity period of the automotive strategy for 5 years, in fact, the maximum validity period of all Huawei documents is 5 years, and when the three years are almost up, we will issue another 5 years." Xu Zhijun stressed that Huawei's strategy of not building cars has not changed.