Heading: Formation of “Changhongwei Automobile” under the Outing Media, Focusing on the Evolution of the Automobile Travel Industry Chain

Original article by Zhou Pei

“Skyworth Automobile is now renamed Changhongwei Automobile!”

It is indeed going to make cars. Huang Hongsheng’s ideas are still grand under the current situation of life. “Climb to the summit of life again” and “once again, lead the future”.

This wave of car making blew across industries, and everyone felt it was an opportunity and wanted to push forward before others in the wind of new energy vehicles. Huang Hongsheng, who has always called himself a “home appliance expert”, has long been involved in the game. However, this time it seems a bit nervous, unlike the past nonchalance.

Some say that this may be Huang Hongsheng’s biggest mistake in his life, entering the car making industry in the guise of a home appliance company, forgetting the pain of the past.

More than ten years ago, the entry of home appliances into the field of car making was “quite absurd”, and many failed and suffered greatly. Since then, these people who suffered heavy losses have returned to the home appliance industry with their tails between their legs.

When the “car-making list” was pulled out, all it was filled with was the word “dead”, and most of them died in 2005.

Anyone plucked from that list could attest to how bloody the result was. At that time, Zheng Jianjiang of Aux produced a grand purchase of 95% of the shares of Shenyang Shuangma, and promised to achieve a production capacity of 450,000 vehicles and invest 8 billion yuan within five years. The entry lasted only a year and two months, and Aux’s defeat in car making was a foregone conclusion.

The path to failure of the same batch of home appliance companies entering into car making was similar to that of Aux. “No core competence, no understanding of the market”, this was the reason for their failure.

Unexpectedly, 16 years have passed, and the desire of home appliance companies to dabble in car making burns on, not extinguished by wildfire, but rekindled by the spring breeze.

What the 65-year-old Huang Hongsheng wants to do

When it comes to a industry mogul starting a business in a new field, people always trace the origin to see if it’s a “dream come true.”

In the case of Huang Hongsheng making cars, the term “dream come true” can also be used, despite the hefty price tag associated with it.

In his childhood ideals, he had some connection with machinery, “being a tractor driver”. Although he later graduated from college and became an assistant engineer at Huabei Electronic Import and Export Corporation under the Ministry of Electronics Industry.

That old saying, “knowledge changes destiny”, is exemplified by the presidents of the three home appliance giants TCL, Skyworth, and Konka, Li Dongsheng, Huang Hongsheng, and Chen Weirong.

Even this car-making venture was long-planned by Huang Hongsheng, who wants to once again hope that he can use his knowledge to change his “destiny”; as a veteran engineer, he has market operating experience, and Huang Hongsheng wants to try his luck with his experience and expertise.

However, it’s hard to say whether this bet will change the development trend of Chinese electric cars or the fate of Huang Hongsheng and Skyworth Group. We can only wait and see for the outcome.

Huang Hongsheng has long been preparing for this move. In his second year of release from prison, 2010, he invested 1 billion yuan into new energy and founded Chuangyuan Tiandi, an investment company. He later jointly invested with Xiamen Jinlong and Nanjing Dongyu Automobile Group to set up Nanjing Jinlong Bus, which became his major investment focus on new energy cars.

In fact, since taking control of Nanjing Jinlong, Huang Hongsheng has quietly shifted his focus to new energy vehicles, even though it was a very challenging and loss-making market due to market factors. However, he laid some foundations in the field of new battery technology.

In 2014, Jinlong business improved and Huang Hongsheng renamed his controlling company Kaiwo New Energy Automobile Co., Ltd. Nanjing Jinlong became its major operating entity, and its brand name was changed to Kaiwo.

In 2019, Kaiwo established the Tianmei brand, qualifying it to develop and manufacture pure electric sedans. Shortly afterwards, the Tianmei ET5 was launched. However, Tianmei failed to succeed as a new car brand.

This time, Skyworth has set a tone of “ten years in the making” for its car-making venture.

Well, usually looking back at the past is boring and tedious. Let’s talk about the exciting things that 65-year-old Huang Hongsheng plans to accomplish after renaming his company to Skyworth Auto.

Firstly, he announced a series of numbers and plans, setting a target of “1-3-3-3”:

“1” represents that Skyworth Auto has invested 10 billion yuan. “3 3 3” represents that they will invest another 30 billion yuan in the future. Skyworth Auto’s market value will reach 300 billion yuan, and they will strive for another 30 years.

With a broad plan named “2 + 4 + N Product Strategy”:

Skyworth Auto has two pure electric platforms: BE and CE. They will launch at least four pure electric car models between 2020 and 2025 and form a full-power product matrix based on pure electric cars, with hybrid and other power cars as supportive modes of power.

As soon as they mentioned the “matrix” this time, we knew that Huang Hongsheng was very confident about Skyworth’s car-making venture. “This year, we aim to reach 12,000 cars, and by 2025, we hope to sell 250,000 cars annually.”

“Skyworth Auto aims to become one of the top 10 brands in the world.” The goal is undoubtedly ambitious.# “The automotive industry can only become bigger and stronger by going public,” Huang Hongsheng stated. “Rapidly going public is a recent goal for CIO. We hope to list on the Science and Technology Innovation Board next year.” Currently, CIO has the production capacity to manufacture 100,000 intelligent vehicles per year.

Indeed, they are very confident and their goal of listing on the Science and Technology Innovation Board next year will be achieved. I suddenly thought of a sentence I wrote before, “The genes that dreams carry determine the direction of the story.” This sentence is for those blind and impulsive “car makers.”

With flowers blooming and the flames ablaze, the road was filled with corpses. This was the biggest feeling of “Wei Xiao Li,” who successfully survived.

“Experienced extremely arduous struggles”

“I never expected that an industry that heavily relies on capital and has high technological barriers could be seen as a ‘pig on the windward side’ by outsiders.”

Last year when Xiaomi’s car manufacturing rumors came out, a person who had been in the industry for many years felt heartbroken. In January, Tianmei Automotive Co., Ltd. was cancelled, and insiders sensed that “It’s not good, CIO is going to make its own car?”

Let’s talk briefly about Tianmei Automotive. It was established in November 2019 and was a passenger car project under the control of Huang Hongsheng’s Kaiwo Automobile. Currently, only one model, the Tianmei ET5, is being sold, and the hardware and software are mostly sourced from Skyworth Group. The selling price is in the range of 100,000 to 200,000 yuan.

Have you seen the actual car? I haven’t seen it on the road. Data shows that the total national sales of ET5 in 2020 was only 467 units, and the first-quarter sales this year were only 206 units, making it hard to come by.

However, not seeing it is not important. At the time when most new forces have retreated, the hidden giant came to the front, with the words “CIO Car”.

It seems that Huang Hongsheng doesn’t want to just stay behind and steer the boat anymore.

However, can Huang Hongsheng make it through the grueling road of “new energy vehicle manufacturing” just like the formidable Dong Mingzhu? Do you believe it, Ms. Dong?

As soon as Huang Hongsheng stepped into the automobile industry, he admitted that he “experienced extremely arduous struggles.” However, it is estimated that this painful struggle may have happened more than once.

In the early days of taking over Nanjing Jinlong, they invested heavily in capital design and research and development, but it ultimately failed. Nanjing Jinlong’s annual loss was over 40 million yuan. Meanwhile, the sales and brand power of Tianmei Automotive were almost non-existent, and the sales and product marketing of Tianmei ET5 were hardly noteworthy.The Tianmei New Energy Car utilizes Skyworth AIoT technology to create the Skylink Intelligent Network System, enabling seamless connection between the car and home. Additionally, Skyworth Digital is also accelerating the development of in-car display systems. In the future, the Sky series technology will continue to empower Skyworth’s automotive business, which can be considered a competitive advantage.

Investment, team building, and OEM production are not difficult tasks. What is difficult is achieving balance in brand, product, and R&D, which are equally important.

Skyworth Automotive has conducted research and made achievements in fields such as autonomous driving, battery management systems (BMS), wire control technology, and remote driving technology. However, it is hard to convince people that relying solely on Tianmei’s system, which sells only a few hundred units annually, is enough. Moreover, Tianmei’s dealer network currently has less than 100 dealers. However, Huang Hongsheng promised to expand to 1,000 dealerships in the future.

The construction of a mature car-making system requires countless time and capital. To build a smooth system, successful new car manufacturers such as NIO and XPeng have spent tens of billions of dollars and weathered multiple storms. The fundamental reason for their success is that their products and technology are recognized by the market.

At the recent Shanghai Auto Show, He XPeng stated that the new energy vehicle industry is entering into a new shudao period, and a new round of life and death competitions has begun. Evergrande uses money to buy time, while Lei Jun is betting on his reputation. There is no conclusion yet as to who will prevail.

It is unknown whether Skyworth’s entry will lead to a slaughter or be slaughtered. Looking back at the ruins left by the new car manufacturing movement, I am concerned about where the 30 billion yuan investment plan for Skyworth Automotive will come from.

When asked about the source of funding, Huang Hongsheng blurted out that it would be raised through an IPO. “We are advancing our IPO plan because only by going public can we make our automotive business bigger and stronger.”

To be honest, this group of old titans who have been fighting in the home appliance industry for many years may not understand the automotive industry, but they know best how to start cut-throat competition in China.

Huang Hongsheng also understands this.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.