On July 1, Hongmeng Zhixing announced its sales in June and the first half of the year: sales in June reached 46,100 units, and sales from January to June were 194,200 units, beating Ideal to become the new force with the highest sales in the first half of the year. There is no doubt that Wenjie is the brand that contributed the most, with more than 93% of sales in June coming from this brand.
On the evening of July 2, Cialis Group Co., Ltd. announced that its holding subsidiary, Cialis Automobile Co., Ltd., reached an agreement with Huawei Technologies Co., Ltd. to invest 2.5 billion yuan to acquire 919 Wenjie series graphic and word trademarks held by the latter, as well as 44 automotive design patents. To put it simply, Cialis bought the Wenjie brand from Huawei.
This is no small news for the automotive industry, but the announcement only uses one sentence to summarize the reason for the transaction: "...... In order to further deepen the cooperative relationship between the two parties, the company will help the company build AITO into a world-class new luxury car leading brand ......".
This statement is too official, many people don't believe that it is the real reason why Huawei sells the Wenjie brand, some people say that Huawei wants to "run away with a bucket", and some people say that sheep should be killed for fattening, but are these explanations really reasonable?
First of all, Cialis mentioned "further deepening cooperation" several times in the announcement, and the momentum of the question is in full swing, and there are no factors that can lead to the breakdown of cooperation between the two sides in the short term, and the possibility of "running away" can be ruled out. Second, Huawei's total revenue last year exceeded 700 billion yuan, and 2.5 billion yuan accounted for only 0.3%, so it is unlikely that Huawei will transfer its brand for small profits under the premise that there is no financial pressure.
Huawei's response to this transaction is that it will continue to support Celis to build and sell good cars, while emphasizing the principle of "insisting on not making cars", and instead using intelligent network technology to help car companies build good cars. In fact, both sides are suggesting that we don't have to understand the deal in a negative light.
In other words, the transfer of the Wenjie brand to Cialis is just to implement the concept of "Huawei does not make cars"? In fact, Huawei has done the same for other partners in the smart car model: in May last year, Huawei successively transferred several trademarks of "Zhijie" and "Xiangjie" to Chery and BAIC New Energy.
At present, Huawei has three cooperation models with car companies. The first is the supply of standardized components, such as HiCar; The second is to provide a full-stack intelligent solution, i.e., Huawei Inside or "HI" mode, which is the cooperation model with JiHu JiHu. The third is the smart car model, in which Huawei will be deeply involved in vehicle research and development and provide sales channels.
From autonomous driving, car machine to audio, these brands are equipped with a large number of Huawei equipment, not only can be unveiled in Huawei's full-scene press conference, but also Huawei stores across the country are their exhibition halls.
Because of such a deep binding, in the eyes of consumers, the "X brand" is equivalent to the "Huawei brand", and they are the cars produced by Huawei. It is with the blessing of Huawei's aura that Wenjie has been able to gain popularity in a short period of time, and it has become a leading brand with monthly sales of more than 40,000 units in just a few years.
However, in principle, Huawei is still in partnership with car companies, and Huawei has always emphasized that it "does not make cars".
But at the beginning, Huawei's principle was not so strong, for example, the official posters of Wenjie directly used slogans such as "Huawei Wenjie", and Yu Chengdong also used "Huawei Wenjie" to introduce new models at Huawei's spring conference in 2023, which may be to quickly increase the popularity of Wenjie, behind which of course Huawei's acquiescence.
In May 2023, Ren Zhengfei, Huawei's top leader, issued a signed internal announcement, once again emphasizing that "Huawei does not make cars" and extending this commitment for 5 years, while strictly restricting the exposure of the word "Huawei".
Why does Huawei emphasize not making cars, and even does not hesitate to divest the brand of Wenjie?
We must understand that Huawei's strength is intelligence rather than car manufacturing, and that it can only serve a single brand by building a car in person, and that car companies are asset-heavy enterprises, and they must first invest a lot of money to build production lines and sales networks, and the efficiency and profits are not high.
On the contrary, as a supplier like Bosch, it can cooperate with multiple car brands, which not only diversifies the risk of heavy assets, but also may equip hundreds of thousands or even millions of new cars every year in the future, which is difficult for a single brand to achieve. Huawei can also use this to establish industry standards and become a conductor in the field of intelligence, thereby achieving better profitability.
Once Huawei is out of the field to build a car, its role for car companies will change from a partner to a competitor, since it is an opponent, it will be guarded, even if there is cooperation, it will be very restrained, how can it be like the smart car model to hand over a considerable part of the dominance to Huawei? This will slow down the adoption and monetization of Huawei's technology, so it is necessary to draw a clear boundary with car manufacturing.
Second, it may be to prepare for going to sea, especially to avoid political risks. In the announcement of Cialis, it is mentioned that some of the acquired trademarks and patents have been registered overseas, indicating that Wenjie has not ruled out the possibility of going overseas.
Brands such as BYD, Great Wall, Chery and other brands have been promoting their overseas plans with great fanfare in recent years, but there has been no trend of going out for a long time.
Huawei is the key to Wenjie's success in the domestic market, but at the same time, it is a sensitive word that affects exports. In the current international situation, sanctioning Huawei is the political correctness of the West, and the positioning of Wenjie is a high-end brand, and the most ideal market is those developed countries in Europe and the United States that can accept high premiums but are sanctioning it.
With Huawei's sale of Wenjie to Cialis, at least the traces of Huawei have been erased from the brand ownership, increasing the feasibility of Wenjie going overseas, and the same is true for Zhijie and Xiangjie. In particular, Chery is a brand with a large proportion of export business, and the E0X platform where Zhijie S7 is located is a global platform, and the standards of local markets are taken into account during research and development, and there is also a lot of possibility of export.
The deal between Huawei and Cialis is believed to be a hint of big moves in the future. At present, the reputation and sales volume of Wenjie in the domestic market are both profitable, and it is also a general trend for Chinese brands to go overseas.
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Legal adviser
Beijing Weiheng (Fuzhou) Law Firm, Lai Chenglong, lawyer