Introduction
Recently, Saikrishna, a subsidiary of Xiaokang Group, launched a new smart car brand called AITO targeting the high-end market, and unveiled the first model of the brand, a mid-size luxury SUV.
According to Saikrishna’s release plan, AITO has planned three new models, including mid-size luxury SUVs, mid-size luxury pure electric SUVs, and mid-to-large luxury SUVs. Stimulated by the news, as of the close of December 2nd, Xiaokang Group’s stock price was 70.23 yuan / share, with a total market value of 95.5 billion yuan, ranking 6th in the A-share passenger car sector.
Compared to the rise of Xiaokang Group, the industry has also rekindled its expectations for what is so far the Huawei model that has had the deepest involvement in early-stage R&D. To some extent, we can even regard AITO as a Huawei car bearing Saikrishna’s logo.
Saikrishna seeks upward brand extension
Currently, domestic independent brands have set up new energy vehicle businesses under their own brands, creating higher-positioned sub-brands, which has become a trend in China’s electric vehicle industry. The positioning of Saikrishna in the minds of Chinese consumers has not been high, even with Huawei’s endorsement, and it is difficult to compete head-on with the new force brands like Weltmeister. There is no need to conceal this point. Compared to Geely, Changan, Great Wall, and other traditional automakers that have already proven themselves in China or new force brands with deep internet genes like Weltmeister, both Xiaokang and Saikrishna need a new platform for presentation.
From the perspective of Huawei, building a new brand from scratch is an inevitable strategic choice to firmly establish its foothold in the domestic market. Although Huawei is making multiple forays in the domestic market and collaborating with multiple automakers including BAIC, Changan, and GAC to import its HI technology, Saikrishna or future AITO that are perhaps easier to control are Huawei’s real sons. Therefore, AITO is not only a new high-end sub-brand of Saikrishna, but also likely to be Huawei’s closest attempt to make cars in China’s smart electric vehicle market.
AITO’s product strength?
Unlike the SF5 that only added some after-market Huawei components, AITO is a brand jointly created by Huawei and Saikrishna. Huawei is more involved in the brand from the car design to the factory manufacturing end. Both Huawei’s senior executives and the Saikrishna team worked hand in hand, to some extent, Huawei even led everything of the AITO brand.
The first AITO model has dimensions of 4770/1930/1625 mm (L/W/H) and a wheelbase of 2880 mm, and it will be based on the latest DE-i pure electric drive range extender platform from Seres. This platform not only achieves a range of over 1000 km on a single charge, 3.2 kWh/100 km fuel consumption, and 0-100 km/h acceleration in 4 seconds, but also supports OTA upgrades, indicating its excellent performance. Seres already holds over 1,000 technology patents in the field of electric drive range extender technology, and has mastered many key technologies in integrated intelligent generator sets, golden drive combinations, battery packs, and intelligent controls. According to Seres insiders, the range extender technology and electric drive technology used in Dongfeng’s new high-end brand “Voyah” have many connections with Seres.
In addition to the DE-i pure electric drive range extender platform, the new car is equipped with the Huawei HarmonyOS intelligent cockpit, which is also a major selling point. The HarmonyOS intelligent cockpit can benefit from Huawei’s full-scene wisdom ecology, and intelligent travel is one of Huawei’s five major solutions for full-scene intelligence. By covering more usage scenarios and connecting various intelligent devices, users can enjoy a more intelligent travel experience, which is the highlight of Huawei’s full-scene intelligent life.
To ensure complete information security protection for the HarmonyOS operating system, Huawei provides complete software and hardware devices from the terminal, chip, link, to cloud collaboration, to ensure that user information security protection reaches the highest level.
Seres welcomes a transformational change
Under Huawei’s support, although Seres is not as high-profile as new EV brands, its sales volume is growing rapidly. According to data from the China Passenger Car Association, Seres’ Huawei SF5 sold 2,205 units in October. In the high-end new energy SUV market above CNY 200,000, the Seres SF5 squeezed into the Top 5. With the help of Seres, Xiaokang shares reached sales of 4,976 units in October 2021 and cumulative sales of 30,669 units for the year, up over 110% YoY.
In the face of fierce competition in China’s new energy vehicle market, and with many new EV brands falling even before producing cars, it is not easy for Seres or Xiaokang to achieve such results. It is evident that the support of Huawei’s brand and technology has played a very important role for a brand that was once extremely marginalized in China.
For the SAIC Aito brand, there will be a significant change in both product matrix and channel development, especially in the construction of a thousand experience stores and service centers starting next year, compared to the current SAIC Aito. Therefore, at the press conference, SAIC Aito executives called out the slogan “TOP 3 new energy vehicles globally within five years!” While it remains unknown whether this slogan can be achieved, it is undoubtedly true that compared to the SF5, Aito will undoubtedly perform better.
Compared with automakers such as Changan, GAC, and BAIC, SAIC Aito undoubtedly has a much lower brand appeal and system capability. But this actually becomes an advantage for SAIC Aito: because SAIC Aito depends more on Huawei, once it loses Huawei’s support, neither its share price nor terminal sales will have any chance of success. It is precisely because of this that Huawei is willing and confident to support SAIC Aito to the fullest extent possible.
With Ren Zhengfei repeatedly announcing to the public that Huawei will not build cars, SAIC Aito is the best carrier for Huawei in the domestic intelligent electric vehicle market. In the future, as Huawei gradually sorts out its layout in the automotive industry, it will no longer matter whether SAIC Aito continues to inherit the advanced ICT technology of Huawei and continue to fight in the domestic market or whether it transforms itself into a team of Huawei’s car manufacturing.
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.