*This article is reproduced from the Autocarweekly WeChat public account.
Author: Linghuchong
At the 2021 Changan Automobile Technology Ecology Conference, Changan Automobile announced a new goal: after becoming the first Chinese brand to break through 20 million vehicles in May 2021, it will strive to achieve sales of 3 million vehicles, with new energy accounting for 35%, by 2025. By 2030, it plans to complete annual sales of 4.5 million vehicles, with new energy accounting for 60% and overseas sales accounting for 30%.
The most eye-catching aspect is naturally the new energy proportion in the Changan Automobile Vision Blueprint. To achieve such achievements, a brand new electrification platform is essential, and the strategic model C385 equipped with a new generation of super-coupled electric drive with high-frequency pulse heating technology was the most dazzling star of the day.
However, what I am more interested in is the E11, the first product from a high-end intelligent electric vehicle brand under Aveta Technology, which was just glimpsed that day.
Changan still needs a high-end brand
As we all know, currently, the price range of domestic independent brand products has long been compressed to below RMB 150,000, and even with the recent improvement in product power, there are still only a few products that can break through the RMB 200,000 mark.
The dream of independent high-end vehicles is, on the one hand, the confidence of Chinese automobile people in making high-quality and high-price ratio products, and on the other hand, it is also said vulgarly that the higher the price of the car, the higher the premium ability.
Making money is the key.
In the past, we often said that the domestic auto market has a tradition of “whoever wins the mid-range car market wins the world.” On the one hand, mid-range cars have huge sales, and on the other hand, product lines that are centered around RMB 200,000 provide a continuous source of cash flow for automakers. Stabilizing the mid-range car market can easily make various strategic transformations.
Guangqi Honda is a typical example. After owning the “cash cow” Accord, it can quickly gather popularity by launching a mid-range SUV Crosstour to target the large five-seater market, or a compact SUV RDX to challenge its cousin CR-V, and gain market share through word-of-mouth and confidence in order to obtain orders.
Every domestic independent brand hopes to have such a “cash cow.”
There are many Chinese brands that have launched their own high-end product lines, but currently, only two and a half have truly established themselves: Geely backed by Volvo, Hongqi, which always attracts attention on important holidays, and Tank, which has just become independent.
The industry has always believed that Changan needs an independent high-end brand to digest its high investment in research and development in the long term, but Changan is considering more.After all, Great Wall’s WEY brand, Chery’s Star Way, and Changan, which has been trying to break through from the bottom up, all seem to lack vitality. Even if they have good products, Changan lacks the “specialty” heritage like Red Flag, and the endorsement of Volvo behind Geely. Announcing the promotion of the product line rashly is not that wise. It is best to accumulate strength and wait for the moment to come.
After a long wait, Changan has finally obtained its own “Volvo”, that is the brand-new high-end intelligent automobile brand AVITA, jointly created by the leading companies in ICT and smart energy industries such as Huawei and CATL.
The success background is to build up a big enough foundation.
The products under the AVITA brand have always been a mystery. At the conference, we finally saw more information. Of course, the information disclosure process is also very “Internet”. Through online connection, the chairman of Changan Auto, Zhu Huarong, and the executive director of Huawei, CEO of the Intelligent Vehicle Solutions Business Unit, Yu Chengdong, and the Chairman of CATL, Dr. Zeng Yuqun, together completed a mysterious unboxing.
By the way, Changan Auto’s popularity ranking in the Oriental Wealth stock market rose 15 places to 18th on August 24th. It is also the highest-ranked car company on the list.
The power of boosting morale can be seen.
From the traditional car review perspective, the E11 looks good, but it does not have the overwhelming advantage of the “Tigerhead Run” W140 generation.
What people are concerned about is not its side profile or top silhouette, nor the “integrating futuristic feeling, sports and casual luxury” design aesthetics in the official information, but the fact that it is equipped with Huawei’s HI (Huawei Inside) full-stack intelligent automobile solution and CATL’s latest electrification technology.
The former is one of the most proud and exciting domestically produced brands among Chinese people. The latter is currently the leader in electrification technology, especially the lithium battery sector. In addition, Changan, which is very willing to invest a lot of money in research and development of its own brand, has talent, capital, and technology that can be called leading companies in their respective industries. Therefore, the “Smart EV” product matrix created by the combination of the three cannot help being sought after by the market and attracting attention from consumers.
Changan offers vehicle integration, Huawei offers software technology, and CATL provides battery advantages. This is like combining Andy Lau, Takuya Kimura, and Leonardo DiCaprio in one movie, a blockbuster in the industry.
“Subsequently, we will release detailed brand plans and quickly launch 4 new products,” Zhu Huarong revealed at the 2021 Changan Automobile Technology Ecology Conference. Although the information was still vague as usual, according to the information released by the official, in the next three years, Hawtai Technologies will rely on the SDA platform architecture to develop a total of 11 products including a coupe, SUV, MPV, and other innovative forms.
They are not only building products, but also a completely new and integrated ecological model. Compared with the hesitancy of the UNI series, Hawtai brand has become the officially recognized high-end brand that integrates resources to the fullest for Changan Automobile.
Struggles and Cooperation of Science and Engineering Students
To take a step back, regardless of success or failure, the well-planned Changan Automobiles have already established an unbreakable position, especially in the accumulation of intelligence.
In fact, Huawei has always been indecisive about whether to go all-in in car manufacturing, or just exist as the “man behind the scenes” of the car manufacturing industry. The attitude of the current CEO is extremely vague, but Huawei’s accumulation and reserve in intelligent transportation are known for their strength in the industry.
Huawei needs to cooperate with others to fully understand the upstream and downstream supply chain in automobile production, as well as the various twists and turns involved in the design, research and development, and production stage. Changan hopes to take a look at the automotive ecology led by these geeks through the involvement of the Internet team to see what it will be like.
I remember attending a technical seminar of a certain Japanese brand around 2015. The Japanese design team expressed their sincerity on how to create a high-quality car model. They believed that the Japanese team had very mature experience. After contacting with Chinese technology teams and experiencing many domestic brand models, they believed that Japan had fallen far behind in the field of automotive internet ecology and should make an effort to catch up.
Five years have passed, and the car machine of this Japanese brand is still difficult to use.
Different fields are like different mountains. The vehicle mechanical engineering and the intelligent ecology of the vehicle are almost in the same state. This is not only the case for joint ventures, but also for domestic brands that iterate rapidly through friction. Therefore, for Changan Automobile, this will be a rare opportunity to liberate their thinking, and here I want to use this profound and heavy phrase.In the present day when pipeline division of labor has been pushed to its extreme, inter-departmental collaboration remains the most challenging task. Even more difficult is incorporating a new module into the established workflow. Chang’an Automobile’s in-vehicle system is already among the leading brands that focus on car-making and performs quite well. However, with the surge of new forces in the automobile industry and increasing collaboration between local automakers and internet giants, Chang’an Automobile needs to speed up its pace.
Although everyone took the same science exam years ago, those who majored in computer science and those who majored in vehicle engineering took vastly different paths upon receiving their admission notice.
Whether it’s assigning programmers to tinker with screws or allowing assembly line workers to write code, it’s difficult to break away from their pre-existing way of thinking. Chang’an Automobile can’t afford to cultivate a team of intelligent individuals in a quantity equivalent to that of an internet enterprise. Therefore, collaboration is the best solution, from which the company can gain experience.
This is also one of the reasons why investment circles are increasingly enamored with automobile stocks that embrace the internet.
Do you think they don’t care about market value?
According to the Chongqing Property Rights Exchange’s website, Avita Technology plans to introduce 2-5 strategic investors by increasing its capital through public listing. In an interview, Zhu Huarong said, “The listing represents Avita Technology’s acceleration towards the market and the establishment of a link with the capital market. It aims to introduce more external strategic partners, leverage synergy effects, and jointly build an intelligent new energy high-end brand. Avita Technology operates independently, and its future listing plan is in the works.”
Collaboration will be the key to turning a giant automobile empire around. By partnering with others, a new growth point and breakthrough can be achieved while still retaining the company’s original product advantages and wide market recognition.
In this light, Chang’an Automobile’s collaboration with Huawei, Tencent, CATL, iFlytek, and China Mobile to build an intelligent interconnected automobile ecosystem; joining forces with FAW and Dongfeng to create Zhongqi Chuangzhi to achieve core technological advancements; and establishing T3 Travel to build a smart travel ecosystem platform are all efforts based on this purpose.
Whether they will succeed or fail, I dare not speculate. Nonetheless, investors have already made their choice.
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.