Author: Xing Shubo
On July 15, in a conversation with Dong Yuhui, Yu Chengdong admitted the existence of the million-level executive car "Zunjie" cooperated by Huawei and JAC, and said that he would "benchmark Maybach and Rolls-Royce".
In this conversation, Yu Chengdong also said that the core of the transfer of the Wenjie brand to Cialis is because of policy requirements. "The brand must be consistent with the manufacturer", and Huawei has not obtained the qualification to make cars for the time being.
This means that, at least internally, with the independence of HarmonyOS Zhixing, the "Huawei does not make cars" strategy has been implemented. Yu Chengdong retreated from the main business force to the background, which also made the future of the smart car model represented by Hongmeng Zhixing uncertain.
With the unveiling of "Zunjie", Hongmeng Zhixing has 4 brands - Wenjie, Zhijie, Xiangjie, and Zunjie, and the partners are Cialis, Chery, BAIC and JAC. According to reports, Hongmeng Zhixing will also release 16 smart cars in the future.
However, at the same time, Huawei has accumulated more than 300 partners in the upstream and downstream of car companies in the parts market and HI mode of competing with smart cars, and as of 2024, there are seven strategic cooperation models, "In the future, more than 10 strategic cooperation models equipped with Huawei's Qiankun ADS will be launched." ”
At present, Huawei's high-flying car BU has encountered problems. Some customers complained online that "customer service said that Huawei's intelligent driving solution is not perfect", which led to the difficulty of delivery of the Zhijie S7pro ordered in 2023. Imperfect parts make it difficult to deliver smart cars, and customers can't pick up cars because of the same problem because of different modes of car manufacturing, which is quite a black humor.
To build a car or not to make a car, to sell parts or to continue to make smart cars, it seems that Huawei is still undecided.
Within Huawei, there have been several completely different line battles:
The most well-known is the "Smart Car Model", represented by Wenjie, which is jointly designed, marketed and sold by Huawei and Celis.
The second method is called "HI mode", for example, brands such as JiHu and VOYAH only use Huawei's intelligent technology services and products such as intelligent cockpits, and Huawei does not participate in the design and production, and Huawei's goal in it is to "help car companies build smart cars faster";
The third mode is the component model, which is also the earliest way for Huawei to cooperate with car companies. Before entering the vehicle market, Huawei has been a parts supplier to traditional car companies such as Volkswagen and Mercedes-Benz, mainly supplying in-vehicle communication modules.
The difference between the three is that Huawei has different levels of involvement. The similarity is that they all use Huawei's technology, but the difference is that Huawei has the least participation in the component model, and only provides accessories;
Huawei has the highest degree of participation in the smart car model, which is responsible for not only technology, but also design and marketing.
In the HI model, Huawei provides technical services in addition to providing parts, but the leading power of design, marketing, branding, production, and sales is still in the hands of car companies. According to Chen Hong, former chairman of SAIC, "car companies should not lose their souls". Chen Hong believes that the future of automotive intelligence is the most profitable, should be in their own hands. SAIC has invested hundreds of billions of dollars to develop its own intelligent technology.
However, other independent car companies obviously do not have the financial and technical strength of SAIC, and choosing to cooperate with intelligent product service providers is also a last resort. However, they don't want to lose their control over the vehicle brand, and hope that Huawei will do a good job in technical services, but they don't want Huawei to get involved in the dominance of the brand.
After understanding the above three models, we can understand why Huawei doesn't build cars.
First of all, the customer becomes a competitor, which is equal to the loss of the customer. What's more, it's about getting the customer into the hands of a real adversary.
Huawei's original intention is to tailor three models for different manufacturers to choose from according to their different acceptance of Huawei. But now it seems that in the era of smart cars, handing over the "soul" is equivalent to handing over the majority of profits, which is obviously unacceptable for car companies whose income is not high. For example, at the beginning of July, the M7 surpassed the ideal and returned to the first place. Wenjie and Ideal have been fighting in the field of extended-range vehicles for several years. But what is not known is that the front motor of the Ideal MEGA uses motor products provided by Huawei. Earlier, Ideal had intended to introduce Huawei's intelligent driving system, but in the face of the attack of the world, Ideal finally chose to develop its own intelligent driving system.
Not only ideal, but also among the new power companies, Ideal Xiaopeng and Weilai are using their own intelligent driving systems, Nezha and Wuling choose the cheaper DJI system, and SAIC and BYD, which have deep pockets, announced their own intelligent driving systems. Although Chery and Huawei have cooperated to produce Zhijie, the sister model based on the same hardware, the Star Era, uses Bosch's intelligent driving system. In other words, among the mainstream car companies, whether they are new forces or traditional car companies, they are currently focusing on self-developed and Bosch and DJI solutions, and Huawei's intelligent driving, which was originally "far ahead", has become a "niche choice".
Not only in terms of vehicle intelligent driving solutions, Huawei's market share is not high, but also in the intelligent driving parts market, such as in the field of controllers, Huawei is not good.
According to the 2023 intelligent driving controller rankings, the current No. 1 supplier in the field of intelligent driving controllers is Desay, Bosch ranks fourth, Baidu ranks tenth, and Huawei is not on the list. Desay Intelligent Driving Solution is based on the chip of semiconductor giant NVIDIA, accounting for 9.3% of the domestic total.
What is more special is Geely. Geely first acquired Meizu's self-developed intelligent cockpit and in-vehicle system, and later cooperated with Baidu to establish Jiyue Automobile, using Baidu's intelligent driving system. Jiyue, formerly known as Jidu Automobile, was rejected from the Shanghai Auto Show due to its lack of car-making qualifications. Later, Baidu was also forced to transfer the Jiyue brand to Geely, and Baidu will only serve Geely as an ICT service provider (information and communication technology).
Compared with Huawei's strength, Baidu and Geely, both ICT service providers, are at a disadvantage in their cooperation. Some media even bluntly said that "Baidu's compromise is in exchange for Geely SEA's smart ceiling", the article said that after Geely thoroughly ate Baidu's technology, it developed its own SEA intelligent driving and became an industry leader.
It can be seen that the atmosphere of the vehicle automobile industry, intelligent driving is the most profitable, can be self-developed, can be self-developed, can not be self-developed to use Bosch, Baidu, DJI solutions, unless there is no way, otherwise will not use Huawei's solutions, because Huawei's smart car market performance is very bright, Huawei and car companies have become competitors. Just a few years ago, car companies liked to use Huawei's communication modules, motors, electronic controls and other products, and brought huge profits to Huawei.
The second reason why Huawei doesn't make cars is that Huawei has low profits from making cars, so it is better to sell communication modules directly.
In 2012, Huawei set up an in-house IoV Lab and began to research and deploy the IoV sector. In 2013, Huawei launched the ME909T in-vehicle communication module, officially entering the Internet of Vehicles (IoV) industry. In 2014, Huawei cooperated with Dongfeng Motor, Guangzhou Automobile Group, SAIC Group, FAW Group, and other companies in the Internet of Vehicles (IoV) and smart cars. In 2015, Huawei received orders for communication modules from Audi and Mercedes-Benz, and entered the ranks of Internet of Vehicles suppliers.
Since its establishment in 2019, Huawei's car BU has neither maintained the high profits of Huawei's on-board modules, nor has it opened up the situation in the vehicle market.
Relevant information shows that in 2023, although the proportion of revenue under Huawei's car BU will double that of 2022, it will only achieve 4.7 billion yuan in revenue. Of Huawei's revenue of 650 billion yuan, it accounts for only 0.6%. Compared with the market size of 55.5 billion yuan in China's intelligent driving solution in 2023, Huawei will only eat less than one-tenth of the cake. It is also reported that in the first seven months of this year, Huawei's car BU smart car business achieved 10 billion revenue, which is in line with Yu Chengdong's statement of "turning around losses in April". However, according to this estimate, its annual revenue is only 20 billion, accounting for only 3%.
According to Huawei's annual report, Huawei's automotive business has invested a total of 20.6 billion yuan, with 7,000 R&D personnel, R&D expenditure of 10.3 billion, and indirect business involving tens of thousands of people. Huawei has 110,000 R&D personnel, and according to the scale of revenue, nearly 10,000 R&D investment should bring Huawei at least 60 billion yuan in revenue. And the reality is that Huawei's car BU's revenue is only a fraction of that. This is unacceptable for Huawei, especially at the top.
"Huawei's intelligent driving solution is a lidar solution. This set of plans is very expensive, and it costs 20,000 yuan to sell it to the car company. DJI's pure vision solution only costs 7,000 yuan. The person in charge of DJI's in-vehicle solution said.
DJI's hardware costs are lower than Huawei's, but profits are still objective. Huawei's LiDAR solution has a high initial cost, and it must be sold enough to reduce costs. If most car companies don't use Huawei's solution, Huawei won't be able to make a profit. Lidar is just one of Huawei's countless products in the automotive space. If we can't open up the sales of parts, a series of ICT products such as Huawei's proud in-vehicle 5G communication modules, fast charging modules, Internet of Vehicles platforms, gateways, and cloud products will not be able to enter the in-vehicle market, which will inevitably affect the profitability of Huawei's communication equipment, which is the lifeblood of Huawei. Communication equipment is a high-tech industry with huge profits. Automobile is a traditional manufacturing industry with high investment and low profits. It is puzzling that instead of selling high-profit on-board telecommunications equipment, it will sell low-margin cars.
For the sake of the intelligent driving business with a revenue of less than 5 billion yuan to build a car, it will eventually affect the revenue of Huawei's communication equipment with a revenue of 362 billion yuan (2023 Huawei annual report data), which is the reason why Ren Zhengfei repeatedly ordered that Huawei was not allowed to build cars.
"Huawei does not build cars, but focuses on ICT communication technology, becoming a supplier of incremental components for intelligent and connected vehicles, and helping car companies build cars." In 2020, Ren Zhengfei said internally at Huawei. Huawei wants to be friends with car companies and help them build smart cars, and Huawei only provides parts. However, since Yu Chengdong took the helm of Chebu, although the sales performance of the smart car business led by Yu Chengdong has been outstanding, the profits contributed to Huawei have been a drop in the bucket. On the contrary, because of the Internet scolding war with other manufacturers and the attack of the water army, car companies are very afraid of cooperation with Huawei.
In addition to the "soul theory" thrown out by SAIC, GAC will also stop joint development with Huawei in 2023, and major car companies have turned to self-development and use of Bosch, Baidu, and DJI solutions. Ren Zhengfei wanted Huawei to become the second Bosch in the automotive field, and now it seems that Baidu and DJI did it, but Huawei did not do it.
Baidu announced the creation of the ANP3 intelligent driving solution, reducing the price of high-end intelligent driving equipped with the original 300,000-level car to 150,000. Previously, this market was Huawei's territory, such as the Wenjie Zhijie series. For example, the new M5 Extended Range Max RS equipped with Huawei's intelligent driving solution is priced at 279,800 yuan, and the Zhijie S7 is as high as 349,800 yuan.
In May this year, Yu Chengdong stepped down as CEO of Huawei terminals, and the "smart car mode" led by Yu Chengdong was included in the territory of Hongmeng Zhixing, and only the position of chairman was retained. It means that more business-level things will be handed over to the new CEO He Gang, "I focus on the strategic level. Yu Chengdong mentioned.
After stepping down, Yu Chengdong complained in the live broadcast room, "The boss restricts him and only allows him to build cars in his spare time." Coincidentally, when he complained about his boss, he also answered a phone call in the live broadcast room, and it was Ren Zhengfei who called. It can be seen that Ren Zhengfei still cares about Yu Chengdong's recent situation and recognizes his ability, but at the company's strategic level, Ren Zhengfei believes that Yu Chengdong has gone astray and can only make him step down. According to the surging report, in Huawei's internal structure, there was no position of chairman of the terminal BG, and the rights and responsibilities of Huawei's terminal are still in the hands of the CEO, which means that the chairman position set up specifically for Yu Chengdong this time is a fictitious position, only providing strategy and not participating in specific business, which is consistent with Yu Chengdong's statement.
"The company's senior management is going to attend a group meeting with a large customer. I want you to bring a tape recorder so that all of you can hear what the customer is saying to you. Where customers have opinions about you, you will go, and only if you dare to self-criticize, you will have hope. Ren Zhengfei said in his internal speech that it is necessary to be guided by customer values, and even formulated detailed rules and regulations for customer satisfaction internally. Unlike those casual customer satisfaction surveys, Huawei's customer satisfaction needs to be included in the assessment, which affects performance and promotion.
Huawei's in-house training textbook "Customer-centric"
Yu Chengdong also helped Huawei occupy the European market by helping customers solve problems, and Huawei telecom equipment once started as an imitation of Siemens, except that it is cheap and has no advantages, and the quality is average. However, for telecom operators with deep pockets, stable quality and reliable quality are what they need, because the later maintenance cost is likely to be more expensive than buying a new piece of equipment.
At that time, Yu Chengdong was keenly aware of the high rent of local land and the large equipment of traditional base stations, which not only occupied space but also were difficult to install and debug, and could not be installed in remote areas. Yu Chengdong conveyed this information to Huawei's headquarters. Therefore, Huawei began to develop a smaller, more convenient distributed small base station to solve the customer's problem. When its technical strength was inferior to its rivals, Huawei opened up the European market with customized customer service.
The sense of service, coupled with the engineer bonus, has made Huawei a dominant position in the field of telecommunications equipment.
From these stories, we can also see that Huawei has always positioned itself as a technology service provider, that is, the role of Party B. When Huawei's technology was not good, it relied on high-quality services to solve problems for Party A's father and achieved growth. When Huawei's technology has achieved transcendence, such as 5G technology, Huawei has made mobile phones to grab Party A's father's cake.
Huawei's communication technology has been widely used in traditional mobile phone manufacturers such as Nokia and Siemens in the past, and has established technical cooperation with mobile phone chip manufacturers such as Qualcomm, making it an important ICT service provider in the mobile phone supply chain.
In 2002, at a meeting at Huawei, the table was slammed, and Ren Zhengfei angrily reprimanded:
"Huawei does not make mobile phones, it has long been decided, who is talking nonsense? Whoever talks nonsense again, who is laid off! ”
Later, why Huawei made mobile phones was also because of customer service.
At that time, operators wanted to launch some private label mobile phones, such as Vodafone and China Mobile, with brands owned by telecom operators and made by Huawei. These mobile phones are backward in technology and difficult to use, just to meet the marketing of operators who charge phone bills and send mobile phones, which is the reason why Huawei made mobile phones in the first place.
In the era of smart phones, Ren Zhengfei believes that mobile phones equipped with high-performance chips will affect cooperation with partners such as Qualcomm, Siemens, Nokia and other customers, so he wants to stop the mobile phone business. Yu Chengdong and other executives insisted on making mobile phones despite public opinion. The development of mobile phone business has indeed made Huawei's revenue exceed 890 billion yuan in 2020. However, it also attracted the 5G ban of the mobile phone industry and the loss of telecommunications equipment licenses in some markets in Europe and the United States, and Huawei's revenue in 2021, 2022, and 2023 failed to exceed 650 billion, and its revenue fell by 240 billion. In 2023, Huawei's mobile phones will only contribute 250 billion in revenue.
"Yu Chengdong wants to say that the company's performance has declined, and I want to quickly build a car to make up for the performance. Mobile phones don't work, I earn it back by car. Ren Zhengfei thought to himself, I didn't agree with making mobile phones at that time, you still want to build cars now? We honestly make telecommunications equipment, sell communication modules for mobile phones and cars, and make a lot of money. It's good to offend a bunch of customers on your phone, and now you have to offend a bunch of customers on your car. How do I sell my telecom modules? Xueqiu's investor summed up Huawei's performance in the past 10 years and joked.
Now, Yu Chengdong has stepped down and the Wenjie brand has been transferred to car companies, which is an explanation from Huawei to automotive partners: Huawei is still the customer value-oriented Party B of the past, not a competitor. In the future, we will only sell spare parts, and we will resolutely not build cars. The deployment of smart devices is more difficult, and it may be necessary to participate in research and development with car companies in the early, middle and late stages, but rest assured, we do not make cars.
However, until now, when you open the website of Hongmeng Zhixing, a subsidiary of Huawei terminals, you still can't see the shadow of the car company, and your eyes are full of Huawei. The Home of the model is Huawei, the model details page is also Huawei, and even the disclaimer in the small font at the end of the website is Huawei. The three series of models sold on Hongmeng Zhixing are from the three car factories of Celis, Chery and BAIC, and there is no mention on the Hongmeng Zhixing website.
This leads to three hidden concerns of Hongmeng Zhixing:
First of all, the responsibilities and rights are not clear, and users are not clear about who is responsible for the car company and Huawei.
The products of three car companies with different backgrounds are forcibly classified into a series of Hongmeng Zhixing, which will bring associated risks. After all, cars are industrial products, and there is no car company whose cars will not have problems, and no car company that has not had a recall. But now, because of Huawei's deep involvement, Chongqing Cialis has a problem with its model, which also affects Chery in Wuhu, Anhui Province.
"Shanxi Xia County high-speed Cialis asked after the accident. Some customers came to us and asked, "Zhijie and Wenjie are both cooperating with Huawei, right?" Has the intellectual world used Huawei's brakes, Star Era? A Chery salesman said that the speed of information dissemination is very fast, but it is very complicated. Many customers only know that Chery and Huawei are cooperating, but they don't know how far the cooperation will be and whether it will affect Chery's other models. "Now I can tell customers that although Zhijie uses Chery's car, it is owned by Hongmeng Zhixing. We use Bosch in Star Era. We don't use Huawei. ”
Secondly, car companies are reluctant to follow Huawei to drink soup.
Huawei provides high-profit intelligent driving, and low-profit manufacturing is called car companies, which will bring two problems.
One is that the profits of cooperative car companies have declined or even lost money. Cialis has cooperated with Huawei for four years and lost money for four years. The reason is that with the increase in sales, Cialis needs to build more factories, production lines, and recruit more workers, but the majority of the profits are taken away by Huawei. The cumulative loss of Cialis in four years reached 9.834 billion. However, on July 15, Cialis announced that it is expected to be profitable in the second half of the year. The outside world believes that after Huawei's trademark is transferred, the market voice of Cialis has increased slightly, or it will increase its profitability.
The other is that Huawei's intelligent driving is expensive, usually used in cars with a price of more than 300,000 yuan. However, at present, models at this price range, high-end intelligent driving usually choose to be self-developed, such as major new forces. In the mainstream sales range of 10 to 200,000 yuan in the second tier, Zhijia uses the cheaper DJI solution. Competitors are afraid that Huawei will not use Huawei's solutions, resulting in Huawei's intelligent driving not being able to sell and unable to dilute the cost, and the high cost leads to the inability to reduce prices. In the final analysis, car companies would rather invest heavily in the research and development of intelligent driving, and would rather rot in the pot than drink soup with Huawei. Because it may be like Cialis, if you can't drink the soup, you have to paste 9.8 billion.
Judging from the current situation that Huawei resolutely does not make cars. In the future, Huawei will definitely return to the role of Super Party B, providing spare parts to car companies, helping car companies build smart cars, and solving problems for customers, but not acting as a competitor.
Now that Hongmeng Zhixing has put the car brand into the car company, there is no need to invest in marketing expenses for the brand in the future.
For Chery, BAIC and other large manufacturers, the benefits of strengthening their own brands outweigh the disadvantages, and there is nothing wrong with using Huawei's technology to increase profits by adding icing on the cake. After all, it has its own channels, its own production lines, and its own R&D and design.
But for Cialis, which is overly dependent on Huawei's channels, after losing Huawei's halo, it is a small factory in Chongqing and has been losing money.
The problem has emerged: after the Cialis M7 regained the sales king of the new forces, the Cialis own brand Fengguang ix5 fell 25 places in June, and the SUV sales list fell to 75th, close to the verge of delisting. The Ford Electric Horse, which has announced the suspension of production and the official Weibo has been shut down, is still clearing its inventory, ranking 74 in June.
Huawei has been tossing in the car circle for 12 years, and it may be Cialis who was injured in the end.