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Huawei's automotive business expansion or acceleration

Publish Date: 2021.08.27

        It is reported that Huawei will soon be able to purchase chips suitable for auto parts from US dealers. However, whether the outcome can achieve the desired outcome is not yet known.

  

   According to Reuters, according to two people familiar with the matter, the United States has approved Huawei's application for a license to purchase chips for its growing auto parts business, valued at hundreds of millions of dollars.

  

   According to the news, as the world's largest manufacturer of telecommunications equipment, Huawei had previously suffered sales restrictions on chips and other components required for network equipment and smart phone business, and its business was affected. At present, the United States has approved local suppliers to sell to Huawei chips used in auto parts such as screens and sensors.

  

Richard Barnett, chief marketing officer of Supply Frame, a global electronic product consulting company, said that Huawei's investment in the US$5 trillion automotive market is still in the "early stage" of investment. , This market has huge growth potential both in China and abroad.

  

  Barnett metaphorically said: "Cars and trucks are now like computers with wheels. This convergence trend has pushed Huawei to invest in the field of smart cars and make this a strategic focus."

  

According to a report in the Global Times, a source said that after a supplier is authorized, it can sell tens of millions of dollars in chips to Huawei. Huawei has asked these suppliers to apply again and hopes to increase the total amount of transactions, for example, to 10 -20 billion US dollars. This also shows that Huawei may have a grand layout in this field. The license is usually valid for 4 years.

  

  Huawei has been in the industry for a long time

  

  Huawei has a long history with the automotive industry. It has repeatedly emphasized that it will not manufacture complete vehicles, but will only build sub-brand vehicles with domestic automakers.

  

In 2014, Huawei established the "Internet of Vehicles Laboratory", which mainly carried out technological innovations of automobile interconnection, intelligence, electrification and sharing, and extended Huawei's "end, management, and cloud" ICT capabilities for intelligent networked electric vehicles. The application scenario reserve technology. In 2015, Huawei received orders for communication modules from Audi and Mercedes-Benz, and entered the car networking supplier sequence.

  

   On September 27, 2017, BAIC New Energy and Huawei signed a strategic cooperation agreement. The two sides carried out comprehensive cooperation in technology research and development, product innovation, etc. The scope of cooperation included cloud computing, car networking, energy Internet and other fields.

  

   In November 2018, Huawei announced that it had signed a framework agreement to deepen strategic cooperation with Beijing New Energy Automobile Co., Ltd. (hereinafter referred to as BAIC New Energy). According to this agreement, the two parties will deepen their strategic cooperation on the basis of the strategic cooperation agreement signed in 2017, from informatization to intelligent networked vehicles, using Huawei’s technological advantages in the field of ICT, facing the development direction of the new four automotive modernizations, and assisting BAIC New Energy builds the next generation of intelligent connected electric vehicles. In the field of enterprise informatization, the two parties will focus on cooperation in the fields of cloud computing, big data, industrial Internet of Things, and information security, and promote the digital transformation of BAIC New Energy.

  

   In 2019, Huawei formally established a first-level department-the Smart Car Solutions Business Unit. The business modules include 5 areas of Smart Car Cloud, Smart Connectivity, Smart Cockpit, Smart Driving, and Smart Electric.

  

   In the same year, Zheng Gang, the former general manager of BAIC New Energy, joined Huawei as the vice president of the Intelligent Vehicle Solutions Business Unit (BU). According to official information, Huawei’s organizational structure is divided into 3 BGs (Business Group) and 2 BUs (Business Units), which are operator BG, enterprise BG, consumer BG and Cloud BU, smart Automotive solutions BU, these five departments are listed as Huawei's five major first-level departments.

  

   On October 30, 2020, Huawei released its smart car solution brand HI for the first time in Shanghai. The aim is to use Huawei's full-stack smart car solution to in-depth cooperation with car companies in an innovative model to create a boutique smart connected electric vehicle, providing consumers with a smart, pleasant, and trustworthy travel experience.

  

   On April 12 this year, Huawei held a global analyst conference. Huawei’s rotating chairman Xu Zhijun said bluntly at the scene: “The outside world believes that Huawei has a brand and technical capabilities, and that it should build a car. However, after years of careful internal discussions on this subject, Huawei decided to participate in building a car.” He also clarified Huawei's strategy of not building cars at the scene, and will jointly build sub-brand cars with domestic car companies in the future.

  

   Public information shows that Huawei has cooperated with BAIC New Energy, Changan Automobile, and GAC Passenger Vehicle to jointly build three sub-brands. Among them, the ARCFOX (Arcfox) jointly created by Huawei and BAIC New Energy has completed the release and listing of its first model. From the fourth quarter of this year, ARCFOX will launch a series of brand-new models.

  

   Layout "direct sales" to sell cars

  

   In addition to cooperation with auto companies in the field of intelligence, Huawei has also penetrated into the auto market and participated in "car sales".

  

According to Xinhuanet, at the beginning of 2019, Chongqing Xiaokang Industrial Group and Huawei Technologies Co., Ltd. held a comprehensive cooperation signing ceremony. The two parties will further promote cooperation in the field of new energy vehicles. To carry out comprehensive cooperation in other fields.

  

  Tianyan check data shows that Chongqing Xiaokang Industrial Group Co., Ltd. was established in May 2007 with a registered capital of approximately RMB 1.27 billion and the legal representative is Zhang Zhengping. The company's business scope includes manufacturing and sales of auto parts, electrical machinery; house leasing, mechanical equipment leasing; economic and technical consulting services; import and export of goods, etc. According to the information of the top ten shareholders of Tianyan Check, the company's largest shareholder is Chongqing Xiaokang Holdings Co., Ltd., which accounts for 34.22% of the total share capital. The second largest shareholder is Dongfeng Motor Group Co., Ltd., which accounts for 25.76% of the total share capital.

  

   On January 20 this year, Xiaokang shares stated on the interactive platform that the company and Huawei have already cooperated in the areas of Sanden, smart cockpit, and smart driving. On March 9, Huawei Terminal Co., Ltd. and Chongqing Xiaokang Industrial Group Co., Ltd. held a memorandum of understanding signing ceremony in Shenzhen. The two parties discussed cooperation in the field of new energy vehicles.

  

   At the end of January, Cyrus officially released the new intelligent extended range system jointly developed with Huawei-Hump Intelligent Extended Range System, and the Cyrus SF5 Free Expedition Edition model based on this system. According to news from Cyrus, this is the first mass production of this system and it is expected to be supplied to third-party companies in the future.

  

  Huawei said that the SF5 power system relies on Huawei's digital development platform PDDP, which is based on artificial intelligence/high-precision simulation models, combined with multi-physics coupling, and AI simulation optimization technology, which can increase development efficiency by 10%.

  

   However, even with Huawei’s hard-core blessing, Cyrus’ sales are not satisfactory. On January 30, 2021, Chongqing Xiaokang Industry Group Co., Ltd. issued a performance pre-loss announcement. It is estimated that the net profit of the company attributable to the parent in 2020 will be between 1.38 billion yuan and 1.78 billion yuan, which is larger than the 67 million yuan in 2019. Range of losses.

  

   In addition, in 2020, the sales of the electric vehicle brand Cyrus SF5 under Xiaokang Co., Ltd. is only 1051 units. In comparison, the ideal ONE, which is also an extended-range electric vehicle, sold 32,624 units during the same period.

  

   From the perspective of financial data, from 2018 to September 2020, Xiaokang’s R&D investment totaled more than 4 billion yuan, most of which was used for the research and development of the smart electric vehicle brand Cyrus. The company also plans to further develop six Cyrus brand electric vehicles in the next 3 to 5 years on the basis of the Cyrus SF5 model, including two plug-in extended-range and pure electric SC series sedans and SUV models and four Plug-in extended range and pure electric SF series cars and SUV models.

  

   However, the temporary weak performance in the sales market will not prevent Huawei from continuing to explore and exert its strength in the auto market.

  

  Tianyan's patent information shows that Huawei Technologies Co., Ltd. has applied for multiple automobile-related patents. On March 9 this year, Huawei Technologies Co., Ltd. published two patents titled "Methods for Human-Vehicle Interaction in Autonomous Vehicles, Autonomous Driving Systems", and "A Method and Device for Determining Lane Line Information". The brainwave signal of the driver, and then control the driving state of the autonomous vehicle. And previously announced the "rear-view mirror adaptive adjustment method and device", which can prevent the driver from being distracted by manually adjusting the rear-view mirror and affecting driving safety.

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