Since the release of Xiaomi SU7, Lei Jun has undoubtedly been the biggest focus.
His every move has been paid attention to by all new energy investors, and it has become the hottest marketing method to get involved with him.
Recently, Lei Jun released a video, saying that in order to thank BAIC for its help and support to Xiaomi Automobile, he and his team made a special trip to visit and thank you.
Judging by the results, it was a thoroughly mutually beneficial win-win situation.
At the beginning of the video, Lei Jun drove a Xiaomi SU7 with lava orange color to BAIC, and the team behind him also appeared in different colors such as Ya gray and olive greenSU7, showing a variety of eye-catching colors at one time. BAIC Group showed its own R&D and innovation capabilities, and Chairman Zhang Jianyong led Lei Jun and his entourage to visit the BAIC Industrial R&D Base, allowing Lei Jun to test drive the BJ60 on the spot and get the personal certification of "Mr. Lei".
At the end of the video, Lei Jun and Zhang Jianyong gave each other a BAIC B80C car model and a Xiaomi SU7 car model, and many netizens said: "Young people learn not only about cars, but also about human sophistication from Mr. Lei. ”
In this joint action, Lei Jun once again showed his deep understanding and execution of creating topics, attracting traffic, and completing the transformation of brand promotion, but what should be seen more is that Xiaomi and BAIC have become an inseparable community after the OEM production of SU7.
Frankly speaking, this is a sure win for Xiaomi. In the era of oil vehicles, BAIC and AMC (American Motor Company) established China's first joint venture car company, BAIC Jeep, opening a precedent for Sino-foreign joint ventures. In the era of electric vehicles, BAIC became the first enterprise to obtain the domestic new energy vehicle production qualification, and has been ranked first in the sales volume of domestic pure electric vehicle enterprises for 7 consecutive years.
Compared with Xiaomi, which became an instant hit, BAIC is more like a slow downward road. Why are the results so different? Will BAIC be willing to become a foundry for cross-border manufacturers? The situation of fighting bayonets on the new energy track is getting more and more intense, and how long is the time left for BAIC to try and make mistakes?
The biggest rival of car companies is mobile phone manufacturers?
In the process of "oil to electricity" of passenger cars, "cars are super mobile phones on wheels" has gradually become an industry consensus. In other words, now when consumers buy vehicles, especially when buying new energy vehicles, the demand pain points have changed, and the past play is to make efforts in terms of beauty, comfort, safety, etc., and now car manufacturers need to pay more attention to what kind of story their products can tell in terms of digitalization, intelligence and informatization.
This also brings a new opponent to new energy vehicle companies, that is, smartphone manufacturers.
If the Internet giants that announced that they would enter the car industry around 2021 have made investors and melon-eating people wonder, then judging from the current performance, no one doubts that the experience of the consumer electronics industry, which represents the "emerging", can cause earth-shaking changes in the automotive industry that was once trapped by "tradition".
Interestingly, these two old "top brand" mobile phone factories that have played an inseparable role in the field of smart phones have a tendency to shake hands and make peace in the new energy vehicle industry, at least they are using the same foundry, BAIC Group.
According to the official website of the Ministry of Industry and Information Technology, the new model of BAIC New Energy and Huawei cooperation has been promoted, and the name of this new car is set to enjoy the world S9, which also belongs to Huawei's "Jie" series, and the trademark is "Huazhang brand", BAIC Group is mainly responsible for production work.
After the news was released, the capital market reacted enthusiastically, and BAIC Blue Valley completed the daily limit on the same day, and its market value quickly rose by more than 4 billion yuan. The last time BAIC Group received such positive attention may be traced back to the cooperation with Xiaomi.
On November 15, 2023, the "Announcement on Road Motor Vehicle Manufacturers and Products" (batch 377), also published on the official website of the Ministry of Industry and Information Technology, disclosed the first "ID photo" of Xiaomi Auto. The announcement shows that the product trademark is Xiaomi, but the specific name of the company is filled in with BAIC Group, which means that Xiaomi will use BAIC's production qualifications to develop cars.
Statistics from securities websites show that during that time, BAIC's share price had risen and fallen many times. Xiaomi SU7 sales are booming after its launch, and it can also see a fairly obvious driving role in BAIC.
However, there is a flaw in the cooperation with Xiaomi, Jiang Dongbin, a researcher in the new energy automobile industry, said: "The cooperation between BAIC and Xiaomi is very simple, basically Xiaomi does the design, brand and channel, and BAIC provides technology to help Xiaomi produce drawings into real cars." The advantage of this is that the harvest can be guaranteed in drought and flood, whether it can last for a long time, what help does it have for the BAIC brand, and what is the core competitiveness of BAIC compared with other OEMs, these questions are actually two words. ”
The reason why Jiang Dongbin has such worries is inseparable from BAIC's previous cooperation with Huawei.
Before enjoying the world, BAIC cooperated with Huawei on a car called Jihu. At that time, the cooperation model between the two parties was Huawei Inside (HI mode), which was upgraded to the smart car mode in April last year.
Jiang Dongbin said that the Hi model is actually the traditional supplier cooperation model, and JiHu only purchased various solutions provided by Huawei from BAIC (Huawei intelligent driving, three-in-one motor, Hongmeng OS system, etc.).
The smart car model is Huawei's real focus, and it is also where he is willing to devote time and energy to it. This is the case with both the world of questions and the world of intelligence, which also explains why BAIC POLAR Fox sold the world's first high-end assisted driving mass production car half a year before the launch of the world, but the final result was completely different.
"The smart car model can enjoy the sales channels of Huawei mobile phones, and sell cars at the same time as selling mobile phones, which has clear help in many indicators of passenger flow conversion, brand value-added, and cost savings."
These methodologies are still applicable in the cooperation with Xiaomi, and how to maximize the energy of partners and maximize Xiaomi's blessing role in BAIC is the next problem that BAIC Group must think about.
The loss in four years exceeded 20 billion
The reason why investors pin their hopes on Xiaomi for BAIC New Energy is actually because of the "incompetence" of Jihu.
Judging from the 2023 annual report and the first quarter report of 2024 released by BAIC Blue Valley released a few days ago, BAIC's losses are still continuing.
According to the annual report, BAIC Blue Valley's revenue in 2023 will reach 14.319 billion yuan, but the net profit attributable to shareholders of listed companies will be -5.4 billion yuan. According to public data, in the three years from 2020 to 2022, BAIC Blue Valley's losses were 6.482 billion yuan, 5.244 billion yuan and 5.465 billion yuan respectively.
It is not difficult to find that the overall situation in 2023 has not been greatly improved compared with 2022, and if you look further into 2021, BAIC Blue Valley has even experienced a regression in profitability. According to data from Flush, BAIC Blue Valley's net profit loss in the past four years has been about 22.6 billion yuan, and the cumulative loss after deducting non-net profit has reached 24 billion yuan.
In particular, it should be noted that the situation in 2023 is already the result of BAIC Blue Valley's efforts.
According to the annual report, the cumulative sales of BAIC Blue Valley last year were 92,000 units, an increase of 84% year-on-year, and the annual sales of 30,000 new cars of Jihu, which contributed the most to sales growth, increased by 138% compared with 2022, and the revenue level increased by 79% year-on-year.
However, the more vehicles sold, the more losses ARCFOX caused to BAIC seem to be. In 2023, JiHu will have a net profit loss of 3.347 billion yuan, and the total assets of Jihu Motors at the end of last year will be 2.099 billion yuan, and the net assets will be -7.52 billion yuan.
And compared with the industry and other brands such as Wei Xiaoli and Zeekr, the data after the "increase" of Jihu is not optimistic.
Taking the new car-making forces as an example, Li Auto delivered 80,400 new cars from January to March, a year-on-year increase of 52.85%; Xpeng delivered 21,800 vehicles in the first quarter, a year-on-year increase of 19.87%. Among the new car brands, Wenjie has risen prominently, with a total of 85,800 new vehicles sold, a year-on-year increase of more than 600%.
As traditional car companies switched to new energy, the sales of Changan Automobile's own brand new energy models increased by more than 50% year-on-year to 128,800 units. In BAIC's first-quarter report card, it only revealed that Jihu's terminal sales increased by 61% year-on-year.
The sales volume of the entire BAIC Blue Valley in the first quarter was 10,100 units, a year-on-year decrease of 33%, and the "carrying handle" Jihu delivered 2,305 vehicles in March, which is obviously not enough to compete with other brands.
From the perspective of operating costs, BAIC Blue Valley's largest sales expenses have increased from 1.008 billion yuan to 1.992 billion yuan in the three years of 2020~2022. In 2023, BAIC Blue Valley's sales expenses will reach a new high of 1.999 billion yuan, and its management expenses will increase by 14.86% to 883 million yuan.
At the same time, BAIC Blue Valley's investment in R&D is decreasing.
In 2023, BAIC Blue Valley's R&D expenses will be 1.186 billion yuan, a year-on-year decrease of 5.08%, which is the least R&D expenditure for BAIC in the past three years, and it is also the first time that R&D expenses have declined since its listing.
Judging from the data that has been disclosed, BAIC Blue Valley has been increasing its investment in the R&D sector every year since 2019, and the fastest growth rate in 2020 has increased from 429 million yuan to 973 million yuan, an increase of 121.91%.
At the end of 2020, BAIC's sales fell by more than 80%, with only 25,914 units sold, only a little more than the annual sales in 2015. In 2024, the new energy market has already switched from the blue ocean to the red ocean, and senior investor Ricky believes that choosing to reduce R&D at this time may lay more foreshadowing for BAIC to fall behind.
In addition, BAIC Blue Valley's asset-liability ratio is also worrying. According to public data, from 2020 to 2023, the company's asset-liability ratio has increased from 73.91% to 77.41%. By the end of the first quarter of 2024, the company's asset-liability ratio has risen to 79.87%, which is not much different from the peak of 79.89% in 2022.
The supply chain is the key of the key
In the view of Zhang Xiang, a researcher at the Automotive Industry Innovation Research Center of North China University of Technology, BAIC Blue Valley's new energy vehicles missed the early development opportunity. The current new energy vehicle companies are all independently developed and original, and "BAIC has been making 'oil to electricity' products, and the cars are sold to online car-hailing companies and car-sharing rental companies, which are not competitive in the private car market. ”
But we also have to admit that as a veteran car company, BAIC's choice may be right and wrong, but what remains unchanged is that it will not lack resilience and courage.
Simultaneously with BAIC's 2023 annual report, it also issued its 2024 quarterly report, which shows that BAIC's operating costs from January to March this year have decreased by nearly 41% as a whole, and sales expenses have been lowered for the first time since their listing, down 4.1% year-on-year to 333 million yuan, and management expenses and financial expenses have decreased by 25.31% and 17.63% respectively.
At the end of the first quarter, BAIC Blue Valley's R&D expenditure increased by 37.99% compared with the same period in 2023 to 316 million yuan, a record high. In an interview with 36Kr in late April, Wang Lei, president of BAIC Research Institute, mentioned that the proportion of BAIC's R&D expenses has jumped from 6.2% in 2021 to 11.7% in 2024.
Of course, compared with other competitors in the industry who focus on new energy, BAIC's investment is nothing. As far as the companies that have announced their quarterly reports are concerned, BYD's R&D expenses in the first three months were 10.611 billion yuan, SAIC Group's was 3.951 billion yuan, Celis was 964 million yuan, and GAC Group, which is also a local state-owned enterprise, invested 375 million yuan, all higher than BAIC.
Ricky mentioned that compared with simply "throwing money", BAIC's advantages focus on technology accumulation. And with the deepening of the competition of new energy vehicles and the development of the industry, the development power and car-making technology of a single car company are gradually unable to support greater development, just like all other industries, car companies that originally only serve C-end consumers have begun to explore the upstream of the supply chain, hoping to master the whole process from raw material manufacturing to output.
This is the case with Xiaomi cars moving from concept cars to actual deliveries, and multiple sources show that Lei Jun is putting follow-up production and expansion and building a supply chain system on the agenda. The announcement released by BAIC Blue Valley pointed out that BAIC, Xiaomi, CATL, and Jingneng Technology will jointly invest 1 billion yuan to establish a joint venture company, whose main function is intelligent manufacturing of battery cells, and its business scope will include the development, production and sales of power batteries and energy storage batteries.
Jiang Dongbin analysis, power battery is the core component of new energy vehicles, it is not an exaggeration to call it the "heart", "a new energy vehicle has nearly forty percent of the cost spent on the power battery, the battery has the world, through the construction of a factory to close the relationship between several enterprises means that their cooperation is closer, resources tend to be seamless, is likely to create a new community of interests." ”
In addition to Xiaomi's thighs, Huawei, another strategic partner of BAIC, has also shown outstanding strength.
In the first quarter of 2024, Cialis will achieve profitability, which is regarded as the prelude to the large-scale success of the smart selection model, and it is indeed worth waiting to see what kind of future Xiangjie will bring to BAIC. As a witness of the 70-year history of China's automobile industry, BAIC is constantly exploring new ways of travel, not necessarily alone, nor necessarily conformist, as long as it is still moving forward, it proves that the prospects are still promising. After becoming an important partner of Xiaomi and Huawei, whether BAIC can win back a city depends on the next market performance.
Author | You Glass