The divestiture of Huawei's automotive business marks the evolution of Huawei's platform strategy in the field of smart cars. On November 26, Huawei and Changan Automobile announced that they have signed a Memorandum of Understanding (MOU) to spin off Huawei and establish a new company. Changan Automobile will acquire no more than 40% of the shares of the new company through investment, and gradually open its equity to other partner car companies to achieve equity diversification. This means that Huawei hopes to work with more car companies to build an open platform for electrification and intelligence with the participation of the entire automotive industry. Behind this decision is Huawei's vision and ambition for the field of smart cars, and it is also a response to the strategic dilemma of the automotive business.
In order to realize Huawei's big dream, the cooperation between Huawei and Changan Automobile is an important starting point. As a Chinese automaker with a long history and strong strength, Changan Automobile will provide important resources and support to Huawei. Under the partnership, Changan Automobile will acquire a stake in the new company through investment and work with Huawei to create innovations and applications in the field of smart vehicles. Through joint efforts, the two parties will continue to expand the market and promote the electrification and intelligence of the automotive industry.
Before Huawei divested its car BU, Huawei faced many doubts and challenges from both internal and external circles. In November 2020, Ren Zhengfei personally issued an EMT document stating that Huawei would not make cars, which is considered an important decision for Huawei's automotive business. However, in the case of a bad market, the sales of Huawei's partner model Wenjie M5 fell sharply in the second half of 2022, which put a lot of pressure on Huawei's automotive business.
In addition, the strategic dilemma of Huawei's automotive business has also been highlighted. Yu Chengdong has publicly stated that if it does not only make systems and components, Huawei's partners will not choose Huawei, and even domestic manufacturers will regard Huawei as a competitor. This shows that Huawei's automotive business is facing huge challenges in the competition and needs to find a breakthrough.
In the face of such a situation, Yu Chengdong, head of Huawei's automotive business, showed firm confidence and determination. He hopes that Huawei will become an open platform for electrification and intelligence in China's automotive industry, so that all cars can use Huawei's systems and components. Such development goals are ambitious and ambitious, but they also mean greater risks and challenges.
Huawei's decision to divest the car BU has rekindled Yu Chengdong's dream. He not only wants to sell a few cars, but also hopes that through Huawei's automotive platform, all Chinese cars will use Huawei's systems and components to realize the electrification and intelligence of China's automotive industry. This dream is based on insight into the future development of the automotive industry and confidence in Huawei's technical strength.
In order to realize this dream, Yu Chengdong led Huawei's automotive team to develop two smart cars, the Wenjie M7 and the Zhijie S7. The two cars were well received by the market with their advanced technological concepts, and achieved impressive sales results for two consecutive months in October and November. This has also laid a solid foundation for the development of Huawei's automotive business.
Huawei's decision to divest the car BU means that Huawei will focus on the development and research of automotive systems and components. Huawei itself has strong capabilities in the field of communications and technology, which will bring huge advantages to Huawei's automotive business. At the same time, the divestiture of the car BU can also attract more partners with strength and resources to join in and jointly promote the electrification and intelligent development of the automotive industry.
In the field of new energy vehicles in China, BYD is an existence that cannot be bypassed. As an automaker with rich experience and leading technology, BYD has achieved great success in the new energy vehicle market. Its electric models are loved by consumers and are ahead of other competitors in terms of sales volume and market share.
So, for Huawei Automobile, will BYD become a problem for it to break through?In fact, there is a potential possibility of cooperation between BYD and Huawei. Both parties are local enterprises in Shenzhen, with leading technology and market positions. Through the cooperation, Huawei and BYD can jointly develop innovative automotive technologies for mutual benefit.
However, Huawei still needs to overcome some challenges to achieve its cooperation with BYD. As a market leader, BYD has its own R&D team and technical strength, and it may be more inclined to develop and control technology independently. Therefore, Huawei needs to offer attractive terms of cooperation to show BYD its value and advantages.
Overall, Huawei's decision to divest the car BU marks a strategic breakthrough and a new development direction for Huawei's automotive business. Yu Chengdong's dream is now being realized, and Huawei's partnership with Changan Automobile will further expand its partnerships and promote the electrification and intelligence of China's automotive industry. For Huawei's automotive business, cooperation with leading companies such as BYD may be key, but it also needs to overcome corresponding challenges. Only through cooperation and innovation can Huawei Automotive achieve breakthroughs and success in the field of new energy vehicles.