Huawei Launches Counterattack in the "Car-Making" Battle

Author: Chai Xuchen

Editor: Zhou Zhiyu

This is the grandest and most anticipated event that Huawei has held in the past three years.

On September 25th, amidst the shouts of "leading the way" at the Huawei Autumn Full-Scene Launch Event, Yu Chengdong did not shine the spotlight on the protagonist Mate60 series as expected by the market, but instead left a surprise for the automotive business.

Less than a week after being promoted to Chairman of Huawei's Automotive Business Unit, Yu Chengdong took the stage and fired the first shot at Tesla, saying, "Our first sedan, the Smart Selection S7, will surpass the Model S in various specifications and is expected to be launched at the end of November."

This new face is the first model produced through the collaboration between Huawei Smart Selection and Chery, and "LUXEED Smart Selection" has become the high-end luxury smart car brand created by both parties.

It is understood that this car is based on the same E0X platform as the Chery Star Era ES, and will also be equipped with the latest HarmonyOS 4.0 car system. Yu Chengdong said that the S7 has a completely new design, and its intelligent cockpit and intelligent driving are significantly ahead of its competitors, as is its spaciousness.

Not only is he disrupting the sedan market, but he is also declaring war on all SUV players, saying, "The most powerful product at the end of the year, the Smart Selection M9, is not only the best SUV under ten million yuan, but also the strongest SUV you can see on the road."

Yu Chengdong confidently stated that whether it is platform advancement, product intelligence capabilities, or new technology content, the M9 is "leading the way" in the industry.

In fact, as early as April, he had "spoiled" that the M9 will be equipped with Huawei's most comprehensive intelligent cockpit, featuring AR-HUD and Pangu's large model, and will also be equipped with Huawei's flagship advanced intelligent driving system ADS2.0.

Yu Chengdong chose to unveil these two products in the form of previews at this launch event, with the release dates set for the end of November and December respectively. This clearly shows his determination to turn the tables at the end of the year, and the pressure he is putting on the Model S and the ideal Mega, which aims to "kill" all SUVs priced at 500,000 yuan by the end of the year.

It must be said that Huawei's automotive business is in dire need of a turnaround.

Since the beginning of this year, Huawei has faced significant pressure in its automotive business. Its component cooperation has been lukewarm, progress in the HI mode has been slow, and at the end of March, it even encountered Guangzhou Automobile Group's withdrawal from the partnership. Meanwhile, the sales of the Smart Selection model, which Yu Chengdong values the most, have remained low, and there is a prevailing bearish sentiment in the market towards Huawei's car-making efforts, with rumors even circulating that Huawei may sell its Automotive Business Unit.

In response to the fluctuating sales of the Smart Selection model, Yu Chengdong admitted in an internal communication meeting that due to lack of experience and insufficient knowledge, they have taken some detours. At this time, it is even more necessary to leverage their own strengths, maintain determination, and persist in creating the ultimate products.

Therefore, in September, Yu Chengdong took a series of actions in an attempt to break the deadlock and launch a counterattack. On September 12th, Huawei held its first-ever launch event for a car, unveiling the highly anticipated "nuclear bomb" - the redesigned Wanjie M7. With a massive investment of 500 million yuan in safety and design enhancements, as well as advanced intelligent driving capabilities, Huawei is ready to regain dominance in the 250,000 yuan SUV market.

After the upgrade in specifications and price adjustments, the new M7 quickly turned the tables in the market. During the autumn launch event, Yu Chengdong revealed that the new M7 has an average daily order volume of over 1,500 units, with a total of 20,000 orders. Based on this trend, the sales of the new M7 are expected to further increase after its official delivery.

Taking advantage of the momentum generated by the new M7, Huawei has reopened a crucial breakthrough for its Smart Selection Car initiative. Seizing the opportunity, Huawei has decided to further intensify its efforts by introducing two new products, the Smart Selection S7 and the Wanjie M7, which are expected to become the trump cards for a comeback in the second half of the year.

In fact, in addition to Sylphy and Chery, other automakers such as JAC and BAIC are also queuing up to join Huawei's Smart Selection Car initiative.

Previously, Yu Chengdong revealed that there would be no conflicts among the models launched by the partners under the Smart Selection Car initiative. These automakers will each develop MPVs, sedans, SUVs, and other different types of products, forming a large ecological alliance to fully utilize the production capacity resources of the car factories.

On August 1st, Guo Mingchi, an analyst at TF International Securities, revealed that Huawei is collaborating with JAC to develop an MPV with a price tag of one million yuan. It is expected to start mass production in the second quarter of next year, with a sales target of 50,000 units in its first year on the market. Chery has also been reported to have planned at least five high-end intelligent electric vehicle models in collaboration with Huawei, with two of them planned for launch this year.

Now, Huawei's collaboration with automakers is gradually being realized.

Huawei's goal is to connect the "car-making legion" through its HarmonyOS ecosystem and intelligent capabilities, leveraging Huawei's greatest strengths to quickly gain influence in the market and establish a solid position in the minds of consumers, thereby consolidating its automotive business foundation.

It can be said that under Yu Chengdong's leadership, the automotive business, along with the terminal business of smartphones and smart wearables, has opened the prelude to Huawei's "counterattack" and expanded the potential for performance growth.

In the past few years, despite the huge investment, Huawei's automotive business has not delivered satisfactory results. In the previous year and the first half of this year, the automotive business only contributed 0.3% of the revenue and remained in a loss-making state. Yu Chengdong once admitted that without a significant increase in car sales that utilize Huawei's intelligent solutions, it would be difficult to achieve a complete business cycle.

Yu Chengdong, who made the promise of "leading from afar," will not easily tarnish his reputation. At the ceremony marking the production of the 100,000th Wanjie vehicle at the end of May, he set a goal, stating that as long as Huawei is given some time, Wanjie will definitely achieve a monthly sales volume of 100,000 units in the future.

However, at a time when the smartphone business is reclaiming lost ground, Yu Chengdong needs to think more about how to balance and create synergies between these two major businesses, thereby further boosting the recovery of Smart Selection Cars.

Therefore, on September 21st, Yu Chengdong officially assumed the position of Chairman of the Automotive Business Unit, while the CEO position was taken over by Jin Yuzhi, the former President of Huawei's Optical Product Line. Huawei stated that after this job adjustment, Yu Chengdong will increase his investment in the intelligent automotive field and further contribute to the commercial success of the automotive business unit. After a period of stagnation, Huawei's automotive business seems to be gradually returning to an upward trajectory. Yu Chengdong is well aware that there are only a few crucial opportunities, and under pressure, the "crazy Yu" is back. How much impact will he bring to the automotive market? The answer will soon be revealed in the fourth quarter.