Wen | Lu Jiu Business Review
There are more and more new energy vehicles with Huawei as their selling point, from the polar fox to the world and then to Aouita.
Lu Jiu Business Review learned that Aouita will start a test drive in the near future. In early September, its mass production vehicles will arrive one after another, and a centralized test drive meeting will be held in Beijing. At present, the shops in Aouita are still displaying non-mass production engineering vehicles.
Aouita’s official entry into the market will mark the emergence of another car company that has deeply branded Huawei.
However, the biggest question now is: Can Aouita enter Huawei’s sales network and enjoy the same treatment as the media? After all, Aouita now has too few stores of its own, only 11.
According to national business daily, Tan Benhong, CEO of Aouita, said in an interview, "We are talking about the way of channel cooperation with Huawei, but not on behalf of sales. When the scale of our channels has not been fully reached, (Huawei) will help us, but it is not a substitute."
However, everyone who knows Huawei knows that Huawei’s terminal belongs to Yu Chengdong’s sphere of influence, while Aouita’s cooperation is Xu Zhijun on the platform.
How much weight does Aouita have in Huawei?
Since its birth, Aouita has always brought its own aura and attracted much attention.
According to public information, Aouita was jointly built by Changan, Huawei and Contemporary Amperex Technology Co., Limited. Changan led the vehicle design and development, Huawei was responsible for intelligent electric technology, while Contemporary Amperex Technology Co., Limited was responsible for providing batteries. The three companies jointly built a CHN platform to empower Aouita.
However, it is strange that there is no Huawei among the shareholders of Aouita Company.
According to Aiqicha’s data, Aouita Science and Technology (Chongqing) Co., Ltd. is backed by eight companies, including Contemporary Amperex Technology Co., Limited, Chongqing Changan and Shanghai Weilai. The capital contribution of Contemporary Amperex Technology Co., Limited is RMB 280 million, Chongqing Changan is RMB 275 million and Weilai is RMB 13.3 million.
I didn’t see the shadow of Huawei, that is to say, in Aouita’s case, Huawei only gave technology and didn’t pay.
There is a big difference between Aouita’s external release and the press. Whether it is the strategic signing conference of Contemporary Amperex Technology Co., Limited, Huawei and Changan Automobile, or the Chongqing Auto Show on June 25th, the specifications attended are quite high. In addition to Tan Benhong, Chairman of Aouita, Zhu Huarong, Chairman of Changan Automobile, Xu Zhijun, Chairman of Huawei, and Zeng Yuqun, Chairman of Contemporary Amperex Technology Co., Limited often come out of the platform.
In addition, Aouita’s product launch can also show another clue.
At the Aouita 11 product launch conference on August 8th, Tan Benhong, the chairman, came out to introduce Aouita 11, and three bosses stood on the platform by video.
In contrast, the press conferences of M5 and M7 were introduced by Huawei’s Yu Chengdong as the leading actor, and Selis’s presence was not high.
On June 25th, when Aouita signed a comprehensive strategic cooperation agreement with Huawei, Chi Linchun, president of BU Marketing and Sales Service Department of Huawei’s smart car solution, said that Aouita was the heavyweight model of Huawei’s full-stack smart car solution.
According to Lu Jiu’s business review, before and after the product launch on August 8th, Wang Jun, chief operating officer of Huawei BU and president of intelligent driving solution product line, also visited Chongqing Times Tianjie Experience Center in Aouita and introduced Aouita 11.
In terms of leadership specifications, Xu Zhijun, the rotating chairman of Huawei, endorsed the platform, and the relevant person in charge of Che BU also came forward to promote it vigorously; In the depth of cooperation, Aouita and Huawei have cooperated heavily in the whole stack, and Aouita also has the trademark authorization of Huawei HI, but whether Aouita can enter the Huawei channel has not been confirmed.
Previously, the media reported one after another that the two sides were actively implementing the preparations for entering their store channels. On August 30, national business daily reported that Tan Benhong said: "We are talking about the way of channel cooperation with Huawei, but not on behalf of sales. It is when the number and scale of our channels have not been fully reached, (Huawei) will help us, but it is not a substitute."
Lu Jiu’s business review found that the so-called two sides are actively implementing the store channel, which was unilaterally announced by Aouita, and Huawei has never spoken to the outside world.
Intriguingly, we haven’t seen the shadow of Yu Chengdong in the cooperation activities between Huawei and Aouita.
On important occasions such as cooperation signing and press conference in Aouita, Xu Zhijun, rotating chairman of Huawei, and heads of various departments of Auto BU attended, but Yu Chengdong, CEO of Huawei BG, CEO of smart car solution BU and director of IRB of smart terminal and smart car parts, never showed up.
Lu Jiu’s business review noted that there was a similar situation in the cooperation with BAIC. Huawei cooperated with BAIC very early, and signed a contract in 2017, and then signed three contracts. Huawei was mainly attended by Xu Zhijun and Wang Jun, and Yu Chengdong never showed up. Yu Chengdong didn’t appear until the release of Alpha S, the polar fox. Yu Chengdong attended the cooperation between Huawei and the international community.
Therefore, do Aouita and Wen Jie belong to different spheres of influence within Huawei?
"China content" is high, but it can’t enter the Huawei channel?
Huawei’s channels have always made car companies drool.
On the evening of September 1st, according to Sellers’ production and sales express, the sales of Jiejie automobile, which cooperated with Huawei, exceeded 10,000 in August.
Asking for big sales is inseparable from Huawei’s channel empowerment.
According to public data, as of August 25, there were 781 sales centers in 190 cities, including 163 user centers and 618 Huawei sales stores.
Huawei also regards its own channels as an important part of empowering automobile brands. According to the data learned by Lujiu Business Review in Huawei in July, Huawei has 12 flagship stores, 116 smart life houses, 5,000 authorized experience stores and more than 60,000 retail positions. Importantly, these stores are all in shopping centers, which are highly matched with the demand of new energy automobile stores.
Whether it can enter Huawei’s sales channels or not, for a long time, there has been no exact news from Aouita, and the caliber of store sales is different.
The salesperson of a Huawei store in Beijing believes that it is impossible for Aouita to sell through Huawei’s channels. "People are an independent brand, and Huawei is the model of HUEWEI Inside. Huawei is only its supplier, so it is impossible to sell through Huawei’s channels."
Aouita’s Suzhou sales staff also said that it is impossible for Aouita to sell in Huawei stores for the same reason as Huawei stores. "Because Aouita is a brand new brand, it will still sell itself."
"Our major shareholders are Changan and Contemporary Amperex Technology Co., Limited, and Huawei is not a major shareholder. Why do you sell it in his store?" The person in charge of Aouita’s Beijing sales store said.
"Huawei actually doesn’t have a few good shops. Many people want to buy Huawei mobile phones. They will search Huawei’s stores in the shopping malls and go directly. Huawei stores don’t have to find the location of big passengers. But the car is different. The new brand still needs a big passenger flow position to attract customers to see the car. " The person in charge of Aouita Suzhou Store said.
Although it is indicated that the channel will not borrow Huawei, the sales in Aouita emphasize the relationship with Huawei and their own "Chinese content".
"We use a complete set of HUAWEI Inside solutions, including car systems, assisted driving, laser radar, as well as Huawei’s motors and Huawei’s drive system. Now there is no second company in the industry that has such a deep cooperation with Huawei." The sales person in charge of the Beijing store said. He believes that the cooperation between Huawei and the international community is not as deep as that of Aouita.
In order to strengthen the content of Chinese, the Suzhou store manager particularly emphasized the hierarchical relationship between Yu Chengdong (pushing the question circle) and Xu Zhijun (platform Aouita). "Huawei’s boss platform is only Aouita. After our conference, many people asked why there was no Yu Chengdong, but later found out that Yu Chengdong’s level was actually lower than Xu Zhijun."
Behind Aouita and Wen Jie
In a phone minutes of Huawei’s in-depth interpretation of intelligent driving, Huawei introduced that there are three modes of cooperation: Tier1 (traditional parts supplier mode, supplying intelligent parts for car companies), HI mode (Huawei Inside mode) and intelligent selection mode.
Among them, Huawei’s intelligent selection mode is the fastest, because almost the layout of the whole vehicle is coordinated by Huawei, and the gross profit contributed by the intelligent selection mode is relatively high. In contrast, "HI mode will have less gross profit, because the cost of HI mode itself is high, but the pricing cannot be particularly high."
According to the data, the current cooperation between BAIC and Huawei is HI mode, and may consider participating in the intelligent selection mode in the future. Moreover, there are many car factories that cooperate with Huawei in HI mode, including GAC and Audi.
According to this summary, HI mode is the main mode of ADS (Huawei Autopilot). But HI is not the most prominent module for intelligent selection. Therefore, from the perspective of the entire car BU, Huawei currently attaches the most importance to smart selection, while ADS attaches the most importance to HI.
Based on these paragraphs, we can see that the gross profit of HI mode is low, and Huawei pays more attention to smart selection, which may be the reason why Aouita has made slow progress in entering Huawei’s channel.
Moreover, the autopilot data of the model will be open to Huawei, but in HI mode, the cooperative manufacturers will carry the corresponding data in their own data closed loop and will not share it with Huawei.
In the cooperation mode, the intelligent selection mode is far from the HI mode.
Lu Jiu’s business review learned that Huawei Automotive Intelligent Selection and HI belonged to different departments at the earliest.
In May 2019, Huawei’s Smart Car Business Unit (IAS BU) was formally established. This department was originally affiliated to the ICT Management Committee, with Wang Jun as its president and Xu Zhijun as its top leader. On September 2, 2021, Huawei was re-appointed, and Yu Chengdong became the CEO of Huawei’s smart car solution BU.
Prior to this, Huawei’s smart cockpit business belonged to IAS BU, HiCar, vehicle-mounted 5G communication and other businesses, belonging to the consumer business group and under the control of Yu Chengdong. Huawei combined these two businesses into one, and both of them were placed under Yu Chengdong. According to the analysis of people familiar with the situation, the main purpose of this move is to improve the implementation and operational efficiency within the group.
The source said that the earliest signing subjects of Huawei’s cooperation with BAIC and Aouita were Huawei Technologies Co., Ltd.; And the cooperation with Xiaokang Sailis, the signing subject is Huawei Terminal Co., Ltd.. Behind this are two companies.
Huawei Technologies Co., Ltd., which provides software and hardware solutions, has a great weight in HI mode, and is the business that Xu Zhijun was in charge of before; The Huawei terminal resource Hicar Huawei Intelligent Selection is led by Yu Chengdong and belongs to the consumer BG. Although it is now under the control of Yu Chengdong, there is inevitably a difference in the relationship between "biological and adoption".
Whether Huawei’s full-stack car solutions can be sold in Huawei’s terminal channels depends on Yu Chengdong.
Huawei has a rotating chairman system. During the rotating period, the rotating chairman is the top leader of the company. Each rotating chairman has a term of six months, so it is difficult to have a lasting influence on the following departments. Therefore, whether the channel sells Aouita or not depends on Yu Chengdong.
About cars, Xu Zhijun and Yu Chengdong have different ideas, which are on the table and have been reported by the media. Yu Chengdong wants to build a car, but Xu Zhijun doesn’t want to build a car.
It is Yu Chengdong’s specialty to engage in consumer business. Huawei has so many channels that it has great advantages in making cars. However, if Huawei goes out on its own, car companies will be more jealous, and Huawei’s car solutions will be even harder to sell. This business was in the charge of Xu Zhijun before.
Rong Hui, former vice president of Beijing Automotive Group New Technology Research Institute and CEO of Huihui Technology, once revealed that Huawei’s smart car solution will cost about 40,000 pieces in cooperation with Huawei. He estimated that Huawei’s profit will be at least 15,000 pieces.
How much can Huawei earn by selling a car?
According to media reports, according to the information disclosed by Huawei executives before, the share between Huawei and Sellers is about 1:9, and the price of M5 is around 300,000. Huawei can get 30,000 for a car, of which 20% is the technology licensing fee, which is about 6,000 yuan, and the rest is the store income.
HI mode Huawei earns a lot, but the investment in intelligent driving research and development has been very large, and many car companies are jealous of Huawei. In contrast, the smart selection model is easy to earn, and car companies are also willing. Huawei was blocked by the United States, and there was no mobile phone to sell in the store. With a car, it just met the shopkeepers who had no goods to sell.
In August, in an article in Huawei’s internal forum, "The management policy of the whole company should shift from pursuing scale to pursuing profit and cash flow", Ren Zhengfei mentioned that smart car solutions should not spread a complete front, and it is necessary to reduce the research budget and strengthen the business closed loop.
Huawei BU has invested a lot in autonomous driving. To achieve a closed-loop business, it is obvious that the pressure of intelligent selection mode is less.
Self-built channels are difficult to support sales.
So far, there are only 11 stores in Aouita.
On August 8, 2022, when a press conference was held in Aouita, Tan Benhong said that the first batch of sales centers in Aouita will land in 10 cities and will officially open on August 8. This year, experience centers and service outlets will be stationed in 100 cities.
On September 1st, Lujiu Business Review was found in official website, Aouita. It is still the original 10 cities, and there are two in Chongqing, with a total of 11 direct stores. According to interviews and telephone calls, most of these stores opened in August. The person in charge of Suzhou sales told Lu Jiu Business Review that the Suzhou store only has an outreach booth at present, and the store will not open until October.
Offline stores have a great impetus to automobile sales, and the speed of building offline stores in Aouita is somewhat slow.
Although new energy car companies are now learning Tesla and booking cars online, offline experience stores are extremely important support. Without the experience of offline stores, it is difficult for car owners to book cars directly online.
Li Xiang once said that with or without stores in a city, the market share will be eight times different.
According to public reports, by September, 2022, LI had 265 retail stores covering 118 cities in China, and 316 after-sales maintenance centers and authorized car body and painting centers covering 226 cities. Weilai official website shows that Weilai has 402 service outlets nationwide.
Just eleven stores, certainly difficult to support Aouita’s ambition, the number of existing stores is far from enough.
As early as June this year, Aouita said that in terms of channels, it will adopt the modes of self-construction and partner joining, and plans to cover 110 cities in the year, and simultaneously promote the entry into Huawei stores.
But now it seems that this progress is a bit slow.
Large shopping centers are currently the best choice for new energy car companies to sell stores. However, it will not be fast to find a suitable shop in the shopping center, negotiate with the shopping center, decorate and move in.
Changan Automobile, behind Aouita, can’t help in the channel. First of all, Aouita is an independent company, and Changan Automobile is not a major shareholder. In addition, the main channel of Chang ‘an is in 4S stores, and the tonality of new energy vehicles owned by Chang ‘an is quite different from that of Aouita.
According to the survey of CMB International Securities, the ability of shopping centers to absorb new energy sales stores is also limited. First, because the stores of new energy auto companies are on the ground floor, the supply area is limited. In addition, new energy auto stores do not contribute much to passenger flow, so shopping centers must maintain the correct combination to increase passenger flow.
"When you go to the mall now, you can see that as long as there is a large flow of people, cars are basically contracted. Now the better bunks have actually been chosen almost, and it is more difficult to find a berth now. " The person in charge of the Suzhou store told Lu Jiu Business Review on the phone.
Since it is difficult to support the ideal sales volume by its own channels at present, Huawei’s channels are more and more important for Aouita. Can we get in or not? Aouita and the industry are waiting for Huawei’s answer. How to coordinate the resources between HI mode and Smart Choice mode and build Huawei’s core competence in the new energy automobile industry? This is also a proposition that Huawei must face seriously.
