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Will Huawei BU operate independently? Official response

2024-03-04 Update From: AutoBeta autobeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)08/11 Report--

Huawei intends to promote the independent operation of car BU and is in close contact with Chongqing State-owned assets Supervision and Administration Commission (SASAC), according to market news. Several people close to Huawei said that the scope of this independence is not limited to ADS, but includes most of the businesses owned by car BU, in a form similar to Glory Solo. In addition, the news also shows that the current car BU still belongs to Huawei consumer BG led by Yu Chengdong, and the independent car BU may become a new Tier 1 giant. After the split, Huawei will recover its R & D investment on the car BU for many years.

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In response to the above news, Huawei officially responded that the online rumors were not consistent with the facts and Huawei did not discuss car BU-related issues with Chongqing State-owned assets Supervision and Administration Commission.

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Although it is not known why there is a rumor that Huawei BU will operate independently, in fact, at the end of last month, when a joint working group on AITO was set up, there was speculation in the market that Huawei might improve its independence in the auto business. However, Huawei denied the claim at the time, responding that the establishment of the working group did not mean preparing to "build a car", but was aimed at improving the user experience in sales and after-sales.

Car BU is the smart car solutions division established by Huawei in May 2019, when Huawei founder Ren Zhengfei issued Huawei organization change documents and announced the establishment of Huawei smart car solution BU, which is managed by the ICT management committee and belongs to Huawei's first-tier division. The president is Wang Jun, and the top head is Xu Zhijun. With the establishment of this department, Huawei also began to enter the car track.

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Huawei's layout in auto-related businesses has also been aggressive since 2021, after the integration of Huawei's auto business and the consumer group, and Yu Chengdong took over Huawei's automotive business and was appointed chief executive of car BU.

Unlike other cross-border car track brands, Huawei has repeatedly reiterated that it will not build cars, but to help car companies build good cars, and has identified Huawei's business model in the automotive sector, including Tier1 (traditional parts supplier model, which supplies intelligent parts to car companies), HI model (Huawei Inside model) and smart selection model. Among them, Wanjie is Huawei smart car ecological brand, and it is also one of the key automobile brands that Huawei cooperates with. In the early days, BAIC, Chang'an and Guangzhou Automobile companies adopted the HI model to establish cooperative relations with Huawei. However, from the feedback from the end of the market, these early brands did not have particularly eye-catching results on the sales side. Data show that in the first seven months of this year, only 10600 cars were delivered.

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In addition, Yu Chengdong has publicly revealed that the research and development of smart car solutions in 2021 has invested as much as $1 billion, and said bluntly: "cars are the only lossmaking business of Huawei at present, and this area is definitely a money-losing game and an absolutely lossmaking business." it's definitely a hard business. " According to Huawei's annual report, Huawei's annual revenue last year totaled 642.3 billion yuan, an increase of 0.9 percent over the same period last year, of which the smart car solutions business generated only 2.077 billion yuan in revenue, with less than a fraction of its performance contribution. According to the latest data released by Huawei, the business revenue of smart car solutions in the first half of this year was 1 billion yuan.

However, Yu Chengdong pointed out that Huawei BU is to be profitable by 2025, and the prerequisite for achieving this goal is to help car companies sell 1 million vehicles. At present, Huawei is accelerating the expansion of the cooperation scale of the smart car model. On August 7, Huawei Managing Director, terminal BG CEO and Huawei smart car solution BU CEO Yu Chengdong posted a message on personal Weibo that Huawei's first pure electric sedan car will be the first to be equipped with HarmonyOS 4, a new category of Huawei smart car business, jointly built by Huawei and Chery, based on the same E0X platform as Xintu ES. It is expected to debut in the third quarter of this year.

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