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2023

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11

Huawei "locomotive", car chain is not chain?

author:

Zhang Zongyue


 

The announcement of the "Memorandum of Investment Cooperation" signed by Chongqing Changan Automobile Co., LTD. (hereinafter referred to as "Changan Automobile") and Huawei Technologies Co., LTD. (hereinafter referred to as "Huawei") is stirring up the entire Chinese automobile circle.

 

Briefly summarize the core content of the announcement: Huawei will divest its automotive business, mainly the core technology and resources of intelligent vehicle solutions business, operate separately with the proposed target company as the main body, and introduce Changan Automobile and other vehicle enterprises as joint venture shareholders. In the target company, Huawei holds 60% of the shares, and other shareholders hold no more than 40% of the shares.

 

Although the announcement is short, it has already triggered a sustained follow-up reaction. Is there a precedent for such cooperation and what are the innovations? In addition to Changan, which vehicle companies will join?

 

01 Who is the "locomotive" of the open platform?

 

According to the memorandum, the target company will strive to become a world-class leader in the automotive intelligent driving system and components industry, and serve as an open platform for the automotive industry, open equity to investors such as existing strategic partners and strategic value automotive companies, and become a diversified equity company.

 

It is easy to understand that this is a supplier of intelligent driving technology and products, and it is not easy to understand that it is an open platform. Yu Chengdong, executive director of Huawei and chairman of Intelligent Vehicle Solution BU, said: "We have always believed that China needs to create an electric intelligent open platform with the participation of the automotive industry, an open platform with a 'locomotive'. We will deepen cooperation with Changan, and at the same time, we will work with more strategic partner car companies to continuously explore a new model of openness and win-win, jointly seize the opportunity of electric intelligent transformation of the automotive industry, and realize the dream of the rise of China's automotive industry."

 

In fact, before Huawei's move, Chinese cars have had similar group action. Founded in 2018 by China Society of Automotive Engineering, China Association of Automobile Manufacturers and China Intelligent Network Automobile Industry Innovation Alliance, Guoqi (Beijing) Intelligent Network Automobile Research Institute Co., LTD. (hereinafter referred to as GuoQI Zhilian), its 23 shareholder units are all leading enterprises and research institutions in the fields of vehicle, parts, information and communication. Including FAW, Dongfeng, Changan, GAC, BAIC, Yutong and other vehicle enterprises, known as the intelligent network automobile national team.

 

However, there are two differences between the open platform launched by Huawei and Guoqi Zhilian, one is that it is initiated by enterprises rather than industry organizations; The second is that there is a clear "locomotive", the proportion of each shareholder of the national automobile Zhilian is relatively average, there is no clear dominant party, and this time, Huawei's share of 60%, does it mean that Huawei is this locomotive? By a parts enterprise to lead a number of vehicle enterprises to engage in development, and is it really brought to move?

 

02 Smart car will conflict with the target company?

 

HUAWEI's auto business has three models, namely, the parts model, the HUAWEI Inside model, and the smart car model (which has been upgraded to Hongmeng Zhixing).

 

It is worth noting that the parts model and HUAWEI Inside model belong To the vehicle BU department in Huawei, which is To B (for vehicle enterprise customers), but the smart car business belongs to the consumer BG in Huawei, which is To C (for ordinary individual consumers). Popular understanding, the parts model and HUAWEI Inside model are to do supplier services for the intelligent car model, and of course, they also do supplier services for other vehicle companies.

 

In the announcement, Huawei specifically stressed that the components and solutions within the business scope of the target company are in principle provided by it for vehicle customers, and Huawei does not engage in business that competes with the business scope of the target company in principle.

 

Obviously, the business segments involved in the parts model and HUAWEI Inside model will definitely be spun off to the target company. So, is the smart car business also to be spun off to the target company?

 

According to media reports, Huawei's terminal communication department responded that Huawei has a piece of automobile-related business - Hongmeng Wisdom business, which has not been spun off to the target company to be established, and will remain in Huawei.

 

In this case, the question may arise. Can the target company provide equal technology and product services to all vehicle customers including Huawei Hongmeng Zhixing equally?

 

03 Which enterprises will join the target company?

 

At present, the target company has explicitly joined the vehicle enterprise is Changan Automobile. Changan's participation is expected, after all, in the Avita car building project, the HUAWEI Inside model has been adopted, and the current cooperation effect is good.

 

In addition to Changan, there is already a little bit of vision is Selis, Selis has previously cooperated with Huawei smart car model. Celis recently issued a statement that it has received an invitation to jointly invest in target companies to jointly participate in building an electric and intelligent open platform, and the company is actively demonstrating related matters to participate in investment and cooperation.

 

 

Another Jianghuai automobile, which cooperated with Selis intelligent car model, issued a statement saying that the company did not receive Huawei's invitation to co-invest, and did not participate in investment and capital cooperation related matters, but also said that the company is highly concerned about Huawei's proposed establishment of an independent company for automotive intelligent systems and component solutions, and actively discussed with Huawei to participate in investment and cooperation related matters.

 

At present, the four vehicle companies that cooperate with Huawei in the intelligent car selection model, Celis, BAIC, Chery, and Jianghuai, are most likely to participate in the target company, and the relationship between "close and close" will naturally be more reliable.

 

As for other vehicle companies, enterprises with strong intelligent technology reserves, such as Xiaopeng and some other new car-making forces, may first adopt a wait-and-see attitude, while enterprises with weak intelligent technology reserves, such as a considerable number of traditional automobile companies, may be more actively involved.

 

Of course, for Huawei, it is natural to hope to attract more and more vehicle companies to join them, because automotive intelligence requires long-term stable huge capital investment, and needs enough customers to dilute research and development costs. More importantly, Huawei's intelligent driving technology also requires more and more vehicles on the road to achieve the accumulation of data and iterative optimization of algorithms.

 

Originally published by China Automotive News on November 28, 2023