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Pave the way for cooperation with Huawei? FAW signed a contract with Shenzhen Municipal people's Government

2024-07-14 Update From: AutoBeta NAV: AutoBeta > News >


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On November 28, China first Automobile Group Co., Ltd. signed a contract with the Shenzhen Municipal people's Government. Focusing on the major strategy of serving the country, the two sides will carry out strategic cooperation in key areas such as forward-looking research and development, automobile going to sea, ecological construction and so on. We will jointly build a new generation of world-class automobile cities and world-class automobile enterprises.

One day later, November 29th, the Guangdong Provincial people's Government and China first Automobile Group Co., Ltd. signed a strategic cooperation framework agreement in Guangzhou. The two sides will focus on the automobile industry and related fields. We will carry out all-round cooperation in innovative research and development, manufacturing, marketing and social undertakings to promote the construction of Guangdong-Hong Kong-Macau Greater Bay Area hand in hand.

Although none of the three parties disclosed the details of the cooperation, the time and place of this series of contracts undoubtedly aroused people's reverie.

On November 26, Changan Automobile announced that the company and Huawei signed a Memorandum of Investment Cooperation in Shenzhen on the 25th. According to the announcement, after consultation between the two sides, Huawei intends to set up a company engaged in the research, design, production, sales and service of automotive intelligent systems and components solutions, and Changan Automobile plans to invest in the company and carry out strategic cooperation. the two sides jointly support the company to become an industry leader in automotive intelligent systems and components solutions based on China, facing the global and service industries. Changan Automobile said that Changan Automobile and its related parties intend to contribute no more than 40% of the equity of the target company, and the specific equity proportion, capital contribution amount and time limit will be discussed separately by the two parties.

The new company will gradually open up its equity to investors such as existing strategic partners, car companies and car companies with strategic value, and become a diversified company. This means that Changan Automobile may be the first vehicle manufacturer to cooperate with Huawei, and then more car companies may join, such as Cyrus, Chery, BAIC, Jianghuai and so on. On November 28, Yu Chengdong said at the conference of Wisdom S7 and Huawei that the new company had issued an open invitation to Cyrus, Chery, Jianghuai and BAIC, and hoped FAW Group would join. On the same day, China FAW signed a contract with the Shenzhen Municipal people's Government to jointly build a new generation of world-class automobile city and world-class automobile enterprises.

Although FAW has not responded to this so far, it has chosen to go south and set up an R & D center in Shenzhen, the hinterland of Huawei's headquarters, adding to the possibility of this cooperation. At present, FAW has entered a new reform stage after the change of chairman, the advantages of joint venture brands FAW-Volkswagen and FAW Toyota are weakening, while the development of independent brands FAW Hongqi and FAW Pentium is also far behind other domestic brands.

Take FAW Hongqi as an example, FAW Group released the global strategy of Red Flag New Energy Brand in January 2023: by 2025, the total sales of Red Flag brand will reach 1 million, of which more than 500000 new energy vehicles will be sold. By 2030, the total sales of Red Flag brand will exceed 1.5 million, and new energy vehicles will become the main body of sales.

Terminal sales data show that the Red Flag brand sold 256390 vehicles in the first 10 months of 2023, of which the highest-selling new energy vehicle is the E-QM5, which supplies the online car-hailing market, while other electric vehicle sales are very mediocre. It is particularly difficult for the Red Flag brand to achieve a 50% penetration rate of new energy vehicles in 2025.

During the 2023 Shanghai Auto Show, Red Flag announced the positioning and description of the three sub-brands, namely, "Red Flag Golden Sunflower", "Red Flag New Energy" and "Red Flag Energy Saving vehicle". In August 2023, Qiu Xiandong took over the vacant position of chairman of FAW for nearly half a year and began to reform the Red Flag brand. Two months later, FAW announced the establishment of the Red Flag Brand Operation Committee and related personnel adjustments. Among them, Liu Yigong, deputy general manager of FAW, served as president of Red Flag Brand Operations Committee, and two other deputy general managers, Zhou Zhiping and Liang Guiyou, served as executive vice presidents. In addition, four senior executives in the group were adjusted to the Operations Committee to serve as vice president. According to the latest plan, Red Flag's goal of selling one million vehicles will be extended from 2025 to 2028, of which sales of new energy vehicles will exceed 700000.

In the face of the gradual backwardness of the market situation, FAW seeks to create a new future opportunity, this positive attitude to the challenge is worthy of recognition. Some netizens believe that the Red Flag brand has important feelings for Chinese consumers, and FAW must carry forward, become bigger and stronger, hoping that FAW can cooperate with Huawei and join hands. Shenzhen, as a special economic zone, gives FAW an all-round improvement in scientific and technological innovation and shares a win-win situation!

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