No starter, parking service! Zhijie S7 sells at a loss, Yu Chengdong： Huawei’s new company has sent an invitation to Sijie.
Every reporter Sun Lei, every editor Pei Jianru
The intellectual S7, which sells at a loss, went public.
On November 28th, Zhijie S7 was officially launched, and the new car was positioned as a medium-sized and large-sized pure electric coupe. Four versions of the car were launched, with the price range of 249,800 ~ 349,800 yuan, and the price of the entry model was lowered by 0.82 million yuan compared with the pre-sale price.
It is understood that Zhijie S7 is equipped with Huawei’s technologies or functions such as Huawei ADS2.0 advanced intelligent driving system, a new generation of HUAWEI DriveONE power platform, Huawei Turing intelligent chassis, HUAWEI xMotion intelligent body collaborative control system, etc., and its "Chinese content" is high.
"The specifications of Zhijie S7 are higher than those of Tesla Model S and Mercedes-Benz EQE, but the price is the same as that of Tesla Model 3." Yu Chengdong, managing director of Huawei, CEO of terminal BG and chairman of BU, a smart car solution, said.
Reduce the selling price to cope with market competition
According to public data, in the past three years, the compound annual growth rate of the market scale of 200,000 ~ 300,000 yuan where Zhijie S7 is located reached 13.6%, and it still increased by 12.7% from January to May this year. The average monthly sales of new cars was around 350,000, and its share in the overall automobile market increased from around 15% in early 2020 to 24% now.
Specifically, in the market of this price range, the sales volume of fuel vehicles of the joint venture brand is highly stable, and the average monthly sales volume is always around 240,000, while the rest of the incremental part is mainly divided by Tesla Model Y, Model 3, BYD Han, Seal and other models. The latter three cars are the direct competitors of Zhijie S7.
According to the research report of Guojin Securities, "Zhijie S7 covers the pure electric medium and large car market in the range of 200,000 ~ 300,000 yuan, and the competition is fierce, but the market scale is large, and there is still room for penetration." An Conghui, CEO of Krypton, once said: "The level of 200,000 ~ 300,000 yuan must be the largest area in the market segment."
In this context, car companies that have seen the potential of this market segment have also laid out. In addition to Kyk-007, which has been pre-sold, it is reported that Kyk-007 will have two new products next year, both of which will focus on the market of 200,000 ~ 300,000 yuan, and the model code-named CM2E has been confirmed. The Xiaomi SU7, which is scheduled to be released next year, is also positioned in the middle and large-scale pure electric coupe, and the price of some of its configured models may be between 200,000 and 300,000 yuan.
Some people believe that in the face of existing and potential market competition, the price of Zhijie S7 will be further explored on the basis of pre-sale of 258,000 yuan. "The pricing of this model is very noisy within the company. At present, the prices of the four versions are all at a loss. After the sales volume comes up in the future, the cost will gradually decrease, turning losses into profits." Yu Chengdong said.
A Huawei channel staff member once said that the sales staff had already completed the product training of Zhijie S7. He believes that the pricing of the old model M7 is a failure, which also affects the product sales to a great extent. Huawei has learned a lot of experience in pricing, and the current pricing of Zhijie S7 should be very competitive in the market.
It is worth noting that, with the split of BU business of Huawei, HarmonyOS Zhixing’s models have completely turned into purchasing cooperation with other Huawei businesses or subsidiaries in terms of intelligent parts. In this context, HarmonyOS Zhixing vehicles may gain a more reasonable cost advantage in the above procurement in the future, which is regarded by the industry as the basis for the intellectual S7 to lower the price.
Regarding the future market performance of Zhijie S7, Shenwan Hongyuan Securities previously stated that the benchmark model of Zhijie S7 is Tesla Model 3. Considering the early channel laying and the competitive pressure of the same price segment, it is estimated that the steady-state monthly sales will be in the range of 5000~7000 vehicles. If the distribution of goods in subsequent stores exceeds expectations, the steady-state monthly sales are expected to exceed 10,000 vehicles.
First unmanned parking service, build a "moat"
In addition to price adjustment, as the first car of HarmonyOS Zhixing, Zhijie S7 also hopes to participate in the market competition by virtue of its advantages in intelligence. According to Huawei, HarmonyOS Zhixing’s models are blessed by Huawei’s innovative smart car technology, which has a better intelligent experience.
Industrial Securities Research Report believes that Zhijie S7 takes sports and technology as its main selling points, and is equipped with Huawei’s latest intelligent driving and cockpit system, with outstanding intelligent configuration. It is understood that Zhijie S7 is equipped with Huawei Turing intelligent chassis for the first time, and also has Huawei ADS2.0 advanced intelligent driving assistance system. In addition, this car is the first model equipped with HarmonyOS4 HarmonyOS system.
"HarmonyOS 4 smart cockpit uses the Ark engine to bring a new 3D car control desktop. At the same time, the intelligent voice assistant Xiaoyi is connected to the Pangu model. " Yu Chengdong said, "With HarmonyOS 4 and HUAWEI MagLink, the central control screen in the car can also achieve three-screen linkage with the rear screen."
In addition, Zhijie S7 is also equipped with Huawei’s parking and driving function for the first time. It is understood that its parking and driving function can independently complete a series of operations such as courtesy to pedestrians, reversing and avoiding, extreme passing, automatic parking and automatic pick-up without driving. Yu Chengdong said: "The parking and driving Beta program will be opened in Beijing, Shanghai, Guangzhou, Shenzhen, Chongqing, Suzhou, Dongguan and other cities in the first quarter of next year."
Parking on behalf of the driver function is considered by the industry to be the only way for L4-class automatic driving of passenger cars, while Xpeng Motors, Baidu and other enterprises have demonstrated similar functions before. In the recent OTA5.0, LI has also added the ability of the ideal AD Max 3.0 unmanned parking service. It is said that the release of the functions of Huawei and LI parking service has a subtle relationship with the Notice on Launching the Pilot Work of Intelligent Networked Vehicle Access and Road Access (hereinafter referred to as the Notice) recently jointly issued by the Ministry of Industry and Information Technology and other four departments.
On November 17, the Ministry of Industry and Information Technology and other four departments jointly issued the "Notice", saying that intelligent networked automobile products with automatic driving function with mass production conditions were selected and pilot projects were carried out in limited areas. CICC said that the Notice will promote the development of technologies and business models for passenger cars L3 and travel services L4.
"The Notice regulates the reporting methods, testing requirements and responsibilities of L3/L4 access and road pilot projects. After the document is issued, it will enter the stage of centralized declaration. By the beginning of 2024, it is expected that a group of applicants will take the lead in achieving product access and road access after passing the requirements of audit and test verification. At that time, it is expected to reflect the technical capabilities and leadership of enterprises from the side. " CITIC Securities said.
CITIC Securities believes that under the impetus of the Notice, advanced intelligent drivers are expected to further accelerate the pace of research and development of autonomous driving technology and product launch, so as to strengthen consumer awareness and brand image, and thus establish a real "moat". In the eyes of many people in the industry, Huawei chose Zhijie S7 as the first unmanned parking service function to participate in the market competition and achieve the above goals.
"HarmonyOS Zhixing cooperative car enterprises will become key customers of Huawei’s new company"
It is worth mentioning that the Zhijie S7 is also the first model released after Huawei and Changan officially announced that they intend to set up a company engaged in R&D, design, production, sales and service of automotive intelligent systems and component solutions (hereinafter referred to as Huawei New Company). The emergence of Huawei’s new company also makes the industry worry about the HarmonyOS Zhixing model of Huawei’s cooperation with Cyrus, Chery, BAIC and JAC.
In this regard, national business daily reporter learned that the emergence of the new Huawei company will not affect HarmonyOS’s zhixing model. An insider who asked not to be named told the reporter, "As a technology platform, Huawei’s new company, HarmonyOS Zhixing’s cooperative car companies will become its key customers in the future." HarmonyOS Zhixing is the most comprehensive, close and in-depth cooperation mode between Huawei and car companies at present, while HarmonyOS Zhixing’s models are blessed by Huawei’s smart car innovation technology.
On November 28th, Yu Chengdong revealed at the launch conference of Zhijie S7 that Huawei had issued an invitation for equity opening to four car companies, namely Cyrus, Chery, BAIC and JAC, and hoped that China FAW Group would join.
In this regard, Sailis said that it has received an invitation to jointly invest in the target company and jointly participate in the creation of an electrified and intelligent open platform. The company is actively demonstrating matters related to participation in investment and cooperation. Jianghuai Automobile said in a statement on November 27 that the company has been in close communication and its scope has continued to expand since its strategic cooperation with Huawei in 2019. Regarding Huawei’s plans to set up an independent company for automotive intelligent systems and component solutions, the company paid close attention to it and actively discussed with Huawei related matters of participating in investment and cooperation. But JAC said,We have not received an invitation from Huawei for joint investment, and have not participated in matters related to investment and capital cooperation.
TF Securities predicted that Huawei’s new company is expected to continuously introduce more car factories to become shareholders in the future, and make it stronger and bigger together with the downstream car factories, which will help to improve the depth of cooperation with the downstream car factories.
"We have always believed that China needs to build an electrified intelligent open platform with the participation of the automobile industry, one with ‘ Locomotive ’ Open platform. We deepen cooperation with Changan, and at the same time, we will work together with more strategic partner car companies to continuously explore new models of openness and win-win, and jointly seize the opportunity of electrification and intelligent transformation of the automobile industry to realize the dream of the rise of China’s automobile industry. " Yu Chengdong said.
In this regard, Huajin Securities said in the research report that Huawei positioned Tier1, empowering OEMs with car modules and self-driving computing platforms as a whole, and rapidly increasing market share through intelligent selection mode in the short term, but the equity cooperation mode may be difficult to expand other OEMs. In the long run, under the trend of differentiated competition, OEMs will still empower themselves with self-developed core technologies and ensure their right to speak in the choice of Tier1.