Sending off NIO and ushering in Huawei: JAC's new midfield battle

Weilai is about to leave, Huawei is coming strongly, for JAC, one leave and one stay, it seems that the foundry continues, in fact, the angle and depth of cooperation between the two sides have been very different. China's auto industry is ushering in a new round of deep integration, and this time it seems that private capital is becoming the dominant party.

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Edit|Langlang Mountain and Mingzhi Mountain

Since JAC Motors announced the transfer of the plant in October this year, to the cooperation agreement with Huawei on December 2, and now NIO Automotive Technology (Anhui) Co., Ltd. has appeared in the "Credit Information Management System for Vehicle Manufacturers" of the Ministry of Industry and Information Technology. Although NIO has not officially confirmed that it has obtained the qualification to make independent cars, the OEM bidding farewell to JAC has yet to be approved by the State-owned Assets Supervision and Administration Commission.

One is finally about to say goodbye to the OEM model, and the other is about to take over seamlessly, opening and closing, and once again erecting the banner of reshaping the pattern of China's auto industry.

This is like a serial drama, interlocking, pressing step by step.

For JAC, is this an OEM partner gone and a new OEM partner ushered in?

Yes, it doesn't seem to be.

Towards the end of the year, the division and integration of China's auto market is an eye-opener.

01.

The details of Huawei's cooperation model with car companies have been exposed

On December 2, JAC announced that on December 1, Huawei Terminal Co., Ltd. and JAC Motors signed the "Intelligent New Energy Vehicle Cooperation Agreement" in Hefei, which is valid for 10 years, that is, the first phase of cooperation between the two sides will last for 10 years, and the two sides promise to jointly invest including but not limited to human resources, production line resources, supply chain resources and funds.

This is the most detailed announcement that has been made public to introduce the details of the cooperation model between Huawei Hongmeng Zhixing and car companies.

In this announcement, JAC Motors disclosed in detail the details of the cooperation between Huawei and the car company, the responsibilities and division of labor between the two parties, the organization and operation model, the specific resources invested, and how to divide intellectual property rights.

Let's take a look at the division of labor between the two sides.

Based on Huawei's intelligent vehicle solution, the two parties agreed to cooperate in product development, manufacturing, sales, and service to build luxury intelligent connected electric vehicles, and meet users' higher needs and expectations for intelligent connected vehicles through continuous upgrades and iterations of cooperative models.

According to the news obtained from other channels, the first model of the cooperation between the two sides will be a smart luxury MPV, and according to the research report of relevant investment institutions, the model will be benchmarked against Mercedes-Maybach, with a price of one million and an internal number: "JAC X6".

To put it simply, the OEM is responsible for production, and Huawei is responsible for product definition, marketing, and sales.

However, in the cooperation between Huawei and JAC, the two parties agreed that JAC Motors will be responsible for the overall product development of the cooperative models, and JAC Motors will be responsible for building an advanced production base.

This seems to mean that JAC will build a new plant to serve the cooperation between the two parties, rather than using the capacity that is now idle.

This is very similar to the original cooperation model of NIO.

In terms of sales, JAC Motors agrees that Huawei terminals or its designated third parties will exclusively provide sales services for cooperative models worldwide, including but not limited to marketing, sales, users, and ecosystem operations.

However, "the export of the model will be carried out only after the two parties have reached an agreement. ”

Judging from the information disclosed in the current announcement, this will be a global model, and Huawei has left an opening to promote the smart car business to explore the global market.

At the same time, JAC said that it will work with Huawei terminals to build a "user-centric" service system, that is, an after-sales system.

The organizational structure and intellectual property division of the two parties are of particular concern, and the announcement also provides a relatively detailed explanation.

According to the announcement, Huawei terminals and JAC senior management have established a regular mutual visit mechanism to regularly exchange market information, industry trends, technological innovation, marketing experience, etc., and cooperate in the following modes, including but not limited to:

(1) Set up a cooperation working group internally, composed of heads and experts from relevant departments of both sides, to specifically dock, coordinate, promote cooperation matters and organize their implementation, and establish a weekly meeting mechanism.

(2) In order to strengthen exchanges and cooperation, a joint working group was established and a regular meeting consultation mechanism was established to jointly formulate the overall strategic cooperation management measures for the project and jointly promote the implementation of the project.

(3) For specific projects, joint market research and joint marketing can be carried out, and the superior resources of both parties can be used to jointly expand the high-quality market and achieve mutual benefit and win-win results.

(4) Jointly establish a market risk early warning, prevention and disposal mechanism to protect the interests of both parties to the greatest extent.

In view of the fact that JAC is the third partner of Huawei's smart car, it can be said that the above mechanism is the result of Huawei's continuous exploration and run-in with Cialis in the past three years.

In terms of intellectual property rights, the principle of who produces the output is basically followed.

The agreement stipulates that before the cooperation of this project, the background intellectual property rights owned by Huawei terminals shall be owned by Huawei terminals, and the background intellectual property rights owned by JAC Motors shall be owned by JAC Motors.

However, the intellectual property rights generated by the cooperation between the two parties belong to whom, but there is no clear definition of the ownership of the intellectual property rights jointly developed.

1. In the course of cooperation in this project, the technical achievements and derivative works generated by any technology, tools, facilities, personnel, equipment, parameters, data, requirements (including design, technology, testing, and quality requirements, as well as their respective documents) and technical know-how independently developed by Huawei devices or provided by Huawei devices, including but not limited to digital models, drawings or documents, and software embodied or embedded in products or services, are Huawei device works (hereinafter referred to as "Huawei device works") The intellectual property rights of Huawei device works belong to Huawei devices.

2. In the course of cooperation in this project, the technical achievements and derivative works produced by any technology, tools, facilities, personnel, equipment, parameters, data, requirements (including design, technology, testing and quality requirements, and their respective documents) and technical know-how independently developed by JAC or provided by JAC, including but not limited to digital models, drawings or documents, as well as software embodied or embedded in products or services, belong to JAC Works (hereinafter referred to as "JAC Works") The intellectual property rights of JAC's works belong to JAC.

Just two days after the details of Huawei's cooperation with JAC were released, the news that NIO had obtained the independent production qualification approved by the Ministry of Industry and Information Technology was revealed, and tomorrow is the day when NIO will release its third quarterly report.

NIO is about to leave, Huawei is coming strongly, leaving and staying, it seems that the OEM continues, in fact, the angle and depth of cooperation between the two sides have been very different.

02.

The capital market has little confidence in JAC

After the announcement of JAC and Huawei on the production of new models, JAC opened sharply higher today, but then closed all the way down.

Apparently influenced by both Huawei and NIO.

Time to come back

In October of this year

On the 20th, JAC announced that it intends to transfer part of the assets with a net book value of 4.212 billion yuan through public listing, involving the inventory, fixed assets, housing construction and land use rights of the three passenger car companies, as well as the structure and equipment assets of the passenger car Xinqiao company.

At the NIO Manufacturing Day on October 20, Qin Lihong, co-founder and president of NIO, made it clear that the assets involved in the announcement of JAC's asset transfer were indeed factory-related equipment and assets cooperated by JAC and NIO.

Given the process of transferring state-owned assets, this is actually an indispensable procedure for NIO to take over its own factories.

That is, NIO plans to take over JAC's foundry to the existing one

(itself is invested by NIO itself),

With the approval of production qualifications,

This means NIO

Finally got rid of JAC's OEM,

NIO will be on the road in the near future.

With the approval of NIO, since the new car-making movement in 2014, the first batch of new car-making forces produced with the help of the OEM model, Xpeng Motors, Leap Motors, and Weilai, have come ashore one after another, starting the process of independent car-making, while the new batch of new car-making forces, Jishi Automobile and Xiaomi Automobile, are still striving for a new round of policy breakthroughs in the OEM model.

Is the foundry model an opportunity for qualified traditional car companies to find partners, or a way to quench their thirst by squeezing policy dividends?

In fact, it can be seen from the cooperation between Haima and Xiaopeng Motors that after losing the customer of Xiaopeng Motors, Haima Motors has not appeared in the public eye for a long time.

Apparently, JAC also wanted to avoid this scene in the first place.

NIO and JAC have signed a letter of intent to strengthen their cooperation.

In March 2021, JAC announced that Anhui Jianghuai Automobile Group Co., Ltd. is signing a letter of intent with NIO Holdings Co., Ltd. (NIO China) to name the joint venture as "Jianglai Advanced Manufacturing Technology (Anhui) Co., Ltd."

If this letter of intent for the joint venture clarifies the foundry model of the two parties, the two parties have not further carried out substantive cooperation on the road of foundry.

As for NIO, it has been secretly seeking to obtain qualifications, especially under the squeeze of the market, and every extra cost will weaken the competitiveness of the product in the market.

According to NIO's financial report, from 2018 to 2022, it paid about 223 million, 441 million, 532 million, 715 million and 1.127 billion yuan to JAC Motors respectively.

Obtaining independent qualifications is naturally a big plus for NIO, but it also means losing a source of income for JAC.

Since then, with the entry of Huawei, NIO and JAC seem to be moving further and further apart.

03.

JAC's new variables: Huawei and Volkswagen

Not long ago, after Huawei's car BU business announced its independence and built a joint venture with Changan (see "Huawei Car BU Splits and Separates, Introduces Changan Automobile Investment, and Releases a Shareholding Ratio of Up to 40%"), JAC Motors has specially issued an announcement saying, "The company has not received Huawei's invitation for joint investment, and has not participated in investment and capital cooperation related matters." ”

In the cooperation agreement between the two parties on December 1, there was no mention of the independence of the car BU business and whether JAC Motors would participate in the investment.

However, JAC deleted the announcement that it had not received an investment invitation on its official website last week, and reissued a statement "Congratulations to Huawei on promoting the construction of an open platform for electrification and intelligence in China's automotive industry".

The statement called Huawei "a milestone step" and said that since the strategic cooperation between JAC and Huawei began in 2019, "it has been in close communication and the scope has continued to expand." ”

In 2019, JAC signed a comprehensive cooperation framework agreement and an MDC platform cooperation agreement with Huawei.

Huawei's 77GHz millimeter-wave radar debuted on the Sihao Aipao, and it is also reported that the Refine RF8 launched in December 2023 will also be the first MPV model equipped with Huawei's intelligent cockpit.

Obviously, the cooperation between JAC and Huawei may not stop there.

JAC is currently on the market

曝

The luminosity is not high, but its sales are not sluggish.

According to the sales data released by the China Passenger Car Association, JAC passenger car sales increased by 24% year-on-year to 171,094 units from January to October, thanks to the increase in sales of new passenger car models such as the X8 PLUS and A5 PLUS.

At the same time, driven by the recovery of the commercial vehicle sector, the sales of JAC heavy-duty trucks, medium-duty trucks, and light trucks increased by 40.1%, 22.8%, and 4.4% year-on-year to 14,505, 15,665, and 141,789 units from January to October, respectively. The export business performed well for the whole year, with cumulative export sales from January to October increasing by 54.4% y/y to 139,000 units.

At the same time, Volkswagen Anhui, in which JAC holds a 25% stake, will also usher in the launch of new models in 2024.

Whether JAC can return to the mainstream of the passenger car market with the help of cooperation with Huawei, Huawei is of course a variable that cannot be ignored.

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