This article is reproduced from the autocarweekly official account.
Author: Jiang Xiaohua
On the media day of the auto show, nearly twenty automotive stocks hit the limit up, and the entire sector rose more than 4%. The company that benefited the most from this phenomenon was a non-listed company – Huawei. Analysts unanimously agreed that this was due to the fact that the April sales of the BAIC Blue Valley, equipped with the Huawei Alpha S system, had reached nearly double the previous month’s sales. Long-time stagnant Chang’an also rose by 20%. Since mentioning cooperation with Huawei in March, General Motors has also risen by 70%.
I helped my son deposit some shares of Xiaokang, and forgot to sell them due to the busy auto show. I made a small profit and saved it for him to buy a Cygnus at the Huawei flagship store when he gets his driver’s license.
Huawei’s presence at this year’s auto show is truly impressive, from products to sales, with one BU and one BG stuffing the media with a huge amount of information. Strategically low-key, the company has designated itself as a non-car manufacturer, but tactically swift and decisive. This is the consistent style of this communication technology enterprise, preferring to make bread rather than go for fame.
Putting aside the Alpha S, which won’t be available until the end of this year, let’s take a look at Huawei’s flagship store, which just started selling cars the day before yesterday. At Huawei’s global flagship store on Nanjing East Road in Shanghai, Yu Chengdong, Executive Director of Huawei and CEO of its consumer business, who became famous for his role in the smartphone business, gave his first-ever car presentation.
From a professional point of view, this presentation was not very interesting, as the connection between the car and Huawei was far less than that of Alpha S. The main point was that the Huawei automotive BU had designed a mechanical range extender for this car, which allowed it to have a range of over 1,000 kilometers, making it one of the few cars on the market capable of such a range. In addition, there are some practical features of the car-family smart link system that are distinctive under the umbrella of Huawei Choice.
However, the scene was very lively, and jokes abounded. Even though Yu Chengdong said that this car was not 5 meters long, it had the advantage of being easy to park, and the audience enjoyed a little quip. This was quite different from the atmosphere of the standard auto show events, where everyone was still looking at their phones, even when Wu Yifan was on stage.
Huawei’s consumer BG has included the Cygnus in the Huawei Choice, and the basic standard for Huawei Choice is that the product must be of good quality and integrated into the Huawei intelligent eco-circle. This is a smart strategy because it linked the Cygnus to the Huawei HiCar, and the logic behind the car’s entry into the Huawei showroom is thus established. This saves a lot of unnecessary speech, such as Huawei being a non-car manufacturer.
华为选择小康并不是一件多么皆大欢喜的婚配，依我来看，这样的选择，最主要的动因应该是着急和没办法，反映了不造车的华为在汽车事业路上，注定在夹缝中起步的现实。
Huawei's choice of Xiaokang is not a happily-ever-after match in my opinion. This choice is mainly driven by urgency and a lack of options, reflecting the reality that Huawei, which does not make cars, is destined to start in the middle of the competition in the automobile industry.
赛力斯 SF5，从基本配置和性能来说，不能说不算是一款好车，但是定位叫好不叫座的增程，又缺乏真正意义上能讨好用户的明显长板，加上母品牌支撑力有限，21.68—24.68 万的价格，原本机会并不大。在这个价格上的选择太过密集了。
In terms of basic configuration and performance, the Seres SF5 is not a bad car, but its positioning as a range-extended vehicle is not very attractive to consumers due to the lack of obvious advantages that can truly impress users. In addition, with limited support from its parent brand and a price range of 216,800-246,800 yuan, the original opportunities for success were not very high, especially considering the intense competition at this price point.
如今多了一个最大的变数，就是华为。华为的赋能除了产品本身的提优之外还有两点，一个自然是品牌和体系力的加持，另一个是理论上多达 5000 家可以放得下车的旗舰店，覆盖了几乎全部说得上的中国城市，并且旗舰店的区位一般都不错。
Now there is a new variable, which is Huawei. In addition to improving the product itself, Huawei's empowerment also has two other advantages. One is the brand and system power, and the other is the theoretically up to 5,000 flagship stores that can accommodate cars, covering almost all of China's major cities with good locations for these stores.
从今年车展期间跟大多数企业的谈话中发现，现有渠道对于车企而言，拖累性已经越来越重，大多数坐拥成百上千家店的车企，虽然仍旧认可 4S 店网络齐备的功能性，仍然短时间难以替代的价值，但是在展示、销售的功能上已经越来越弱，并且成为新型展示销售方式建立的障碍。大批利润越来越薄的 4S 店不得不搬离寸土寸金的中心地带，扎根城乡结合部。
During this year's auto show, it was found in conversations with most companies that existing channels are becoming more and more burdensome for car companies. Although most car companies have hundreds or thousands of stores with a complete 4S dealership network that is still recognized for its functionality and value that is difficult to replace in the short term, this network's functionality in terms of exhibition and sales has become weaker and has become an obstacle to establishing new sales methods. Large numbers of 4S stores with increasingly thin profit margins must move away from the prime locations in city centers and instead settle in rural-urban fringe areas.
成功转型的企业，多数是依托新建的线上平台，完成了和用户与潜客的交流，通常到店之后，只要销售和实车没能打消他已经充盈的购买热情，成交率基本上就很高了。
Most companies that have successfully transformed have relied on newly-built online platforms to communicate with users and potential customers. Generally, as long as the sales representatives and the car itself do not dispel their already-enthusiastic buying intentions, the conversion rate is usually quite high when customers actually go to the dealership.
回到市中心，是大多数车企在布局的事情，如今的商业综合体，比如上海的环球港，但凡能放下一款车的地方，都没被车企放过，甭管是电梯上来，还是吃饭等位，顺便看车成了固定节目。
Returning to the city center, most car companies are now focusing on their layout. In today's commercial complexes, such as Shanghai's Global Harbor, anywhere that can accommodate a car has been claimed by a car company, whether it's taking an elevator upstairs, waiting for a meal, or while checking out, looking at cars has become a fixed activity.
条件好一点的就能弄个不大的铺面，差不多能放两台车的样子，旁边挨着星巴克或是乐乐茶的，就算是好位置。
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If the conditions are good enough, a small storefront can be set up that can accommodate two cars, usually located next to a Starbucks or Le Le Cha tea shop, which is considered a prime location.I believe that the effects of these storefronts and exhibits are not comparable to those of Huawei flagship stores, be it from the perspective of technology atmosphere, exhibition hall comfort, effective foot traffic, or any other key aspect. Imagine a scenario where I want to buy a car, I search online for storefronts, this downtown shop is located in the central aisle of the waiting area on the third floor of the Global Harbor, while the other one is situated in the atrium opposite the elevator entrance of the B2 level parking garage of the Global Harbor. This feeling is comparable to being in the Huawei global flagship store, clucking in admiration. Furthermore, a scale of 5,000 is simply smashing all the channel scales of all car companies in the automobile industry in an instant.
I believe if it weren’t for the existing channel interests and moral burdens, Huawei would open its exhibition hall to the automobile industry, and a reasonable scenario would be multiple car companies bidding to become Huawei’s channel.
But, I am sorry to say, the reality is that Huawei can only find partners with almost no self-owned sales channels. Coupled with Huawei’s impatience for the launch of cooperation products with LI and Changan before the May Day holiday, it is indeed logical that the Cyrus SF5 is virtually the only choice available among products with almost no negative feedback.
However, this also provides Huawei with a steep opportunity. If Huawei can sell the Cyrus SF5 well, it will not only be highly profitable, but will also bring immense honor. After this fight is over, it is certain that Huawei’s Consumer Business Group will be worshipped in the automobile sales circle. This will give Huawei an overwhelming advantage in negotiating channel cooperation with other brands that have higher technical cooperation relevance in the future.
Such success may also bring about more changes. For example, car companies will reconsider the problem of where to go with existing channels systematically. In fact, 4S shops understand that when the heavily-maintained gasoline vehicles are going out of fashion, it is also their time to bid farewell. Car companies will also re-examine how to lay out systematized downtown exhibition halls, and may even evaluate channel cooperation opportunities with companies that have similar city center flagship stores to Huawei, such as DJI, rather than just focus on the nooks and corners of commercial complexes.
However, selling cars and selling phones are not quite the same, even with electric vehicles. The process involves quite a few more steps than selling phones, and not every product in Huawei’s Smart Selection series will be a hit as soon as it enters a Huawei store. For Huawei with only one type of car in their store, a failure to sell well also means that Huawei’s first battle in selling cars has failed.
Yu Chengdong’s further room for improvement in explaining cars is his expertise in handling typhoons and emotions. Technically, he could seek out a senior instructor from Taiwan. In my impression, some of the best people for explaining cars are Taiwanese. However, the key issue is still how well he can sell cars.From the information obtained so far, it seems that Huawei is also preparing a new type of car selling mode that will overturn the traditional model. However, they have not released any eye-catching promotional combos like Taobao Shopping Festival. According to Huawei Consumer BG CMO, Zhu Yonggang, Huawei’s best selling approach is “hard sell”: we at Huawei are not good at talking, we just pick out good products for everyone.
If this approach does work, it will be a disaster for those in the car marketing industry who have attended hundreds of forums each year. Huawei is skilled in steep operations and is sure to win. Although Huawei does not seem to be well-prepared for the car selling industry, I cautiously believe in their ability based on their reputation. However, I will not bet my career and reputation on it.
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.