Article by Roomy
Editor | Zhou Changxian
“One life chasing the wind, half a life building cars.”
This was a very accurate description of Huang Hongsheng’s life journey.
A rough review of Huang Hongsheng’s entrepreneurial history reveals that he has been present during many industry trends, from selling televisions to real estate, photovoltaic semiconductors to automobile manufacturing. He is truly a “wind chaser”.
However, looking back on these past few decades, from being a “hand-operated tractor operator” to “Sony’s dream” and now “automobile manufacturing”, Huang Hongsheng’s entrepreneurial journey is like playing chess, every move is risky and controversial.
“Will there be only 5-10 mainstream intelligent car manufacturing companies in the future? Does Chuangwei Automotive still have a chance? Is Chuangwei Automotive really necessary? What technology does Chuangwei Automotive have to compete for the Science and Technology Innovation Board?” These are the problems Huang Hongsheng faced since last year.
With the constant controversy surrounding Chuangwei Automotive, which has not yet gained a foothold in the new energy industry, would Huang Hongsheng feel anxious? At least, he has not shown any anxiety in public appearances. When faced with thorny issues, he often expresses his attitude with one sentence: “This is an exceptionally difficult battle, but he firmly believes that Chuangwei Automotive will find its own place.”
Those who know Huang Hongsheng understand that “he has an unyielding personality”, to put it more directly, he is “stubborn”. Just like the stainless steel insulated cup he carries with him, which is already worn and old, he is still stubborn and does not want to replace it.
Closing the door to the noisy environment, Huang Hongsheng set his sights on the automobile manufacturing industry and gave himself 30 years to “find his position”. “I have set a plan called ’30 years’, and I will retire in 2049,” he said. Huang Hongsheng is 66 years old.
Lei Jun once said that Xiaomi’s entry into the automotive industry will be his last startup opportunity. Huang Hongsheng, who is 13 years older than Lei Jun, is still talking about his automotive ideals on the stage of Chuangwei Automotive, saying that he will strive for another 30 years. Just like when he had a grand vision for the home appliance industry, “Someday, I will create a company like Sony or Panasonic.”
Now, once again chasing the wind, he believes that Tesla is the leading enterprise of new energy vehicles. “We follow Tesla as a model and strive to surpass it.”
Chuangwei Automotive, the curtain rises on this new entrepreneurial story, full of surprises and ups and downs, all in the hands of Huang Hongsheng’s magic wand. The next wave of his magic wand is the Chuangwei Super Hybrid HT-i.
Entering the automobile industry is not a hermit’s path
Chuangwei Automotive is a story of both praise and criticism.
Critics have criticized Huang Hongsheng for “getting up early, rushing to the late show.” This is a familiar story path, as Foxconn’s Terry Gou is also a typical representative of “half a lifetime building cars, and still returning as a newcomer.”
When the news of Chuangwei Automotive’s entry into the industry was announced, there were surprises and doubts. “Could it be a whim?”Actually, not really.
Since the acquisition of Nanjing Golden Dragon in 2009, Huang Hongsheng has been involved in the automotive industry for 13 years, making him one of the earliest participants in new energy vehicles in China. He always says to people that it is the automobile that changed him.
However, early riser Huang Hongsheng did not change the automotive industry. Sometimes, I think that he can exchange experiences with Guo Taiming for the past decade. Both companies have ties with BYD Wang Chuanfu and have been exploring for more than a decade, but have failed to achieve a first-mover advantage.
Building cars is not a sudden whim for Huang Hongsheng, and it has taken a lot of time over the past decade.
Let’s briefly review the story of Huang Hongsheng’s car making. In 2011, Huang Hongsheng founded Kaiao Automobile, comprehensively involved in the field of new energy commercial vehicles from the production, sales, research and development, and service of complete vehicles and core components.
Six years later, Kaiao Automobile entered the field of new energy passenger cars, and the first smart car, Tianmei ET5, was developed and completed the project in the same year. In November 2019, Chuangwei established a new energy passenger car brand, Tianmei Auto, and after the launch of the first model, Tianmei ET5, the market response was mediocre with only 595 units sold in the first six months.
It has been a bumpy road, with huge capital investment. Both the home appliance market and the automobile industry believe that Huang Hongsheng is “not suitable for making cars.” By the time Tianmei ET5 was launched in 2020, the competition in the new energy market was unprecedented, and Tesla had already been localized, while NIO, Ideal, and XPeng were breaking free from the quagmire and sales began to rise. Although Huang Hongsheng had a head start, he did not achieve his desired success.
However, Huang Hongsheng, who was able to become a home appliance king, should not be underestimated for his market acumen.
In 2016, when the concept of “Internet + Automobile” had just been put forward, Huang Hongsheng proposed that the extension of the car + life business will create a new profit model. Compared with this, when Lei Jun proposed “Automobile as a new entrance to smart homes,” it was already several years too late. And today, new car-making forces such as NIO and XPeng are infiltrating this concept.
Moreover, Huang Hongsheng’s entry into car-making is not that of a hermit. He has the support of Chuangwei Group behind him. It’s just that Huang Hongsheng has not been able to grasp the trend of car making. Some even believe that “Huang Hongsheng has been building cars for many years, but has never really stepped into the threshold of the automotive industry.”
When Tianmei ET5 stopped production, many people thought that Huang Hongsheng’s car-making career was almost over, and he might be like Guo Taiming, who had “given up on car making.” But in 2021, Huang Hongsheng decided to come back.
On April 27th last year, Tianmei Auto was renamed Chuangwei Auto, and at the same time, the Tianmei ET5 was renamed Chuangwei ET5. In July of the same year, Chuangwei ET5 was renamed Chuangwei EV6 and was launched. The reason for the rename is to leverage Chuangwei’s reputation and promote sales growth.
However, obviously, the creation of EV6 did not help Huang Hongsheng find his position.
From July 2021 to February this year, a total of 6,342 units of the Creation EV6 were sold, with monthly sales of less than 1,000 units. In comparison, in February of this year, BYD’s new energy vehicle sales reached 87,473 units, mainly due to the DM-i hybrid system and blade battery.
The successor of traditional gasoline cars?
Of course, Creating Cars has also received praise.
The industry wants to see Huang Hongsheng use his ideas once again to open up new cracks in the already saturated car industry, allowing for some differences in the sector.
Clearing a bloody path in the cutthroat industry is extremely impressive. The success story of the representation of the home appliance industry re-entering the car-making circle is also a success story that everyone likes to see. Moreover, Huang Hongsheng has repeatedly emphasized that “creating cars is not a momentary impulse.”
The difference this time is that Huang Hongsheng’s confidence comes not only from the market exploration of the Creation EV6 but also from the newly launch Careation HT-i, which is currently in pre-sale with prices ranging from ¥1.498-1.998 million.
From a design perspective, the Creation HT-i continues the family design language of Creation EV6, with a redesigned air grille on the front face, which Creation Cars refers to as “gravity wave aesthetic concept.” From an exterior perspective, it does look better than EV6.
However, the main competitiveness of Creation HT-i comes from the joint development of Creating Cars and Fudi Power Technology Team. The latter is a subsidiary of BYD, and the HT-i system is tailored for Creating Cars, with features such as oil-and-electric, ultra-low fuel consumption, smooth power delivery, and strong power. The electric range is 200 kilometers, the power consumption per hundred kilometers is 5.3 liters, and the comprehensive range can reach 1267 kilometers.
“We now see two great opportunities, one is electrification, and the other is hybridization.” Huang Hongsheng is very candid, saying that there was not enough preparation at that time, and he paid a lot of tuition fees in the process of catching up.
At first, Huang Hongsheng’s thinking was straightforward, he thought that the moon in the West was round, so all the technology of Creating Cars came from the West. However, the intelligent automotive arena is in China.
“Previously, my team was still thinking about gasoline cars, so it was obviously slow when it came to electrification and intelligence, and if the product power was not good, everything was zero.” This also explains why Huang Hongsheng has been making cars for many years but has never entered the threshold.
Today, after fighting many battles and experiencing repeated failures, he has gained some experience and sees things more clearly.Therefore, Huang Hongsheng has confidence in this car, and it is not baseless. This can be seen from the product positioning he has given: The Skyworth HT-i with super hybrid technology will replace traditional fuel vehicles.
His confidence is also derived from his familiarity with the field of intelligentization. “From household appliances to cars, where is our differentiation advantage? First of all, it’s in intelligentization.” Huang Hongsheng believes that the intelligent software of Skyworth’s household appliances gives Skyworth’s cars a unique differentiation advantage in terms of operating system, software, and vehicle machine.
“Intelligentization and IoT in the field of household appliances have already taken the lead in global layout. Skyworth has been deeply cultivating for many years and has a technological foundation that allows us to upgrade and leverage our existing advantages in the field of new energy vehicles.” Huang Hongsheng believed that Skyworth’s car-home ecological product concept, including mobile intelligence, life intelligence, and space intelligence, would cover the vast majority of scenarios in the process of car use and lead the revolution of the connected car-home.
Based on these two core technologies, Huang Hongsheng has set a “relatively lofty” goal for Skyworth’s car manufacturing.
In 2022, Skyworth’s annual target for car sales is 30,000 units, including 4,000 in overseas markets. In 2023, Skyworth’s annual target for car sales is 100,000 units, including 15,000 in overseas markets. In 2025, Skyworth’s annual target for car sales is 250,000 units, including 80,000 in overseas markets. To meet the needs of market competition, Skyworth’s car will launch a series of seven models on the AE platform, BE platform and CE platform, totaling more than 14 new products.
Skyworth’s car manufacturing ideas have become rational. This also explains why the first model EV6 is an all-electric vehicle and the second model uses a plug-in hybrid technology route.
The two-layer purpose is to reduce costs and increase sales.
This is the mission of the Skyworth HT-i, which will be launched in August.
Mastering the “foundation” in one’s own hands
For the Skyworth car brand, Huang Hongsheng’s plan is grand: to invest another 30 billion yuan in the future, to achieve the goal of Skyworth car becoming a global top-ten car brand, and to link with the capital market to achieve a market value of over 300 billion yuan.
“Entering the new energy vehicle industry requires a minimum investment of 20 billion yuan.” Li Bin’s statement is often mentioned and asked if one is ready to invest 20 billion yuan whenever a new player enters the market.
Huang Hongsheng is no exception. However, the era when one could get money simply based on a concept is gone forever. To be favored by the capital market now, the fundamental factors are core technology and investment in research and development.From Huang Hongsheng’s plan, it can be seen that investing in the capital market is an important step in his car manufacturing business. At the same time as the Year of the Tiger began, the automaker, Skyworth Automobile, also mentioned that “2022 is the year of the group’s assault on the Science and Technology Innovation Board.”
Currently, Skyworth Automobile is in the process of financing. Huang Hongsheng revealed that “rapid listing is our short-term goal. The goal is to apply by the end of this year and hope to be listed on the Science and Technology Innovation Board next year.”
However, to date, no vehicle manufacturer has successfully listed on the Science and Technology Innovation Board. If it wants to succeed in listing, Skyworth Automobile’s core technology and research and development capabilities, which are of concern to the capital market, will test Huang Hongsheng.
Regarding this challenge, Wu Longba, co-founder of Skyworth Automobile, revealed in an interview, “At the beginning of the Skyworth Automobile project, there was a lot of pressure, and without our own core technology, we would face bottlenecks. Later, I led the formation of an elite development team to overcome the difficulties of core technology.”
Previously, because of the technical bullying encountered in the electric vehicle line control chassis problem, just negotiating the threshold required a price of one hundred million US dollars, which made Huang Hongsheng once again realize that “it is difficult to move a step without mastering the core technology.”
However, it takes time to develop expertise, as the saying goes, and Wei Xiaoli spent seven years to explore the technological advantages of smart electric vehicles. Currently, Skyworth Automobile has chosen to jointly develop its power system with the Fudi Power Technology team to make up for its research and development shortcomings.
Although the Science and Technology Innovation Board has relaxed its listing conditions relative to the main board, there are still thresholds. “From the perspective of the positioning and listing requirements of the Science and Technology Innovation Board, ‘science and technology innovation’ is the core. Relative to the size and profitability levels of automakers, the Science and Technology Innovation Board attaches more importance to a company’s scientific and technological innovation capabilities,” said Cui Jiashi, an associate researcher at the Shanghai Advanced Institute of Finance.
For example, Great Wall Motors has released the Lemon Hybrid DHT technology, and Changan Automobile has launched the Blue Whale iDD hybrid system, both of which have a common advantage: independent research and development. Skyworth HT-i can make up for Skyworth Automobile’s shortcomings in the hybrid market, but can Skyworth Automobile smoothly control this hybrid system because of the research and development gap in the power system? This still needs to be tested by the market.
WM Motor and Geely Automobile, which previously were striving to list on the Science and Technology Innovation Board, both suspended their listings. “The reasons for stopping halfway are nothing more than insufficient financial data, lack of core technological strength, or turning to Hong Kong and US stocks, which is not uncommon,” said Tao Xinxin, an analyst at Huatai Securities.
Huang Hongsheng said that Skyworth Automobile’s patents, research and development investment, talents, and other aspects all conform to the characteristics of the Science and Technology Innovation Board, and the company is striving to achieve more technological achievements. “We must master the ‘foundation’ ourselves.”
Skyworth Automobile has too much homework to do.
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.