Yesterday, it was reported that Yu Chengdong resigned from the position of CEO of Huawei Smart Car Solutions BU and was renamed as Chairman of Smart Car Solutions BU. Regarding this matter, Huawei officials have not yet commented. If the news is true, this will be the fifth major structural adjustment of Huawei Auto BU since its establishment.
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Behind the frequent structural adjustments, on the one hand, this is related to the current poor sales and revenue of Huawei Auto BU. At present, its HI model is not progressing smoothly, and the sales volume of the representative of the smart car selection model has been sluggish. In 2022 and the first half of this year, the revenue contributed by car BU is only 0.3%, and it is in a state of loss; on the other hand, since this year, the return of Huawei mobile phones, especially 5G, has brought its market share back to the mainstream of the market. Yu Chengdong, who wears multiple hats, might have to return his energy to the mobile phone business?
Sales revenue is sluggish, Huawei Auto BU is re-adjusting
With the above changes, part of the current management structure of the car BU includes: Yu Chengdong, CEO of Huawei terminal BG and chairman of smart car solution BU; Jin Yuzhi, president of Huawei optical product line and CEO of smart car solution BU; Wang Jun, BUCSO of Huawei smart car solution; Li Wenguang, president of Huawei smart driving solution product line and general manager of the smart driving field, etc.
As of now, Huawei officials have not commented on this news. If this personnel adjustment is realized, Huawei Automotive BU may once again usher in a change in strategic direction.
Currently, Huawei Auto BU has three business models: one is selling standardized auto parts; the other is the HuaweiInside model (HI model) that provides full-stack smart car solutions; the third is the smart car model that is deeply involved in product and vehicle design, and provides sales network channels. Among them, the HI mode was once led by Wang Jun, and the smart car selection mode was led by Yu Chengdong.
Jin Yuzhi, president of Huawei’s optical product line, said that the auto parts model is directly related to Huawei’s car BU. He previously stated at a conference that Huawei is committed to promoting the integration of optical technology and the automotive industry and bringing optical technology into every vehicle. As technologies such as optical algorithms, laser light sources, and space optics are gradually introduced into cars, smart vehicle light will inject new momentum into the development of smart connected cars in the three major application areas of light display, light perception, and light connection.
It is worth noting that this is also the fifth major structural adjustment of Huawei Auto BU since its establishment.
In May 2019, Huawei founder Ren Zhengfei issued Huawei's organizational change document, officially announcing the establishment of Huawei Smart Car Solutions BU, and Wang Jun was appointed president of Smart Car Solutions BU.
In May 2021, Huawei issued an internal document to make personnel adjustments. While Yu Chengdong serves as CEO of Consumer BG, he has added Smart Car Solutions BU CEO, and Wang Jun continues to serve as President of Smart Car Solutions BU;
But in September 2021, Huawei announced again that due to management needs, it had decided to abolish the position of president of smart car solution BU. Wang Jun will serve as smart car solution BUCOO and concurrently as president of the smart driving solution product line.
In February this year, it was reported online that Wang Jun, president of Huawei’s smart car solution BUCOO and smart driving solution product lines, had been suspended. Huawei officials did not comment on this. But since this year, Li Wenguang, deputy director of the Intelligent Driving Products Department, who was transferred from Huawei's Consumer BG Mobile Phone Product Line Vice President to Auto BU, has begun to appear as President of Huawei's Intelligent Driving Solutions Product Line and General Manager of the Intelligent Driving Field.
In August this year, according to multiple media reports, people close to Huawei confirmed that Wang Jun, who was suspended earlier this year, had returned to Huawei's automotive BU and was responsible for strategic planning.
Behind Huawei's frequent adjustments to the car BU structure is that the business is wavering on ToB or ToC, and the business model is still not clear.
Yu Chengdong once said at a public event that Huawei invests heavily in cars, investing 7,000 people directly and more than 10,000 people indirectly, spending more than one billion US dollars a year. It is currently Huawei's only loss-making business; and at an internal Huawei meeting at the end of 2022, he even pointed out that the smart car solution BU will be profitable in 2025.
Compared with the annual investment, the revenue of Huawei Auto BU is indeed not that satisfactory.
In 2022, Huawei achieved a total revenue of 642.3 billion yuan, of which the smart car solution business only achieved revenue of 2.077 billion yuan, accounting for 0.3%. In the first half of this year, Huawei achieved sales revenue of 310.9 billion yuan, and the smart car solution business revenue was 1 billion yuan, accounting for the same 0.3%. Although the car BU has invested heavily, it has not brought corresponding revenue contribution to Huawei.
Currently, Huawei has encountered bottlenecks in both HI mode and smart car selection mode. GAC directly abandoned the HI model, and the sales of Changan Avita and BAIC Jihu that adopted the HI model fell short of expectations; and in the field of smart car selection, after monthly sales exceeded 10,000 for four consecutive months in 2022 and became the biggest dark horse, the situation took a turn for the worse in 2023, with sales languishing.
Huawei Car BU is also further expanding the categories of smart car selection models. In August this year, Yu Chengdong announced the first pure electric coupe "Luxeed" of Huawei's smart car selection business. It is a cooperation between Huawei and Chery and will be the first to be equipped with the HarmonyOS4 car system. It is expected to be released in the third quarter of this year.
The car BU is undergoing structural adjustments at this time, and it is still unclear whether it will affect the subsequent advancement of the smart car selection model.
The mobile phone business returns, and Yu Chengdong is "reassigned"?
In addition to being related to the strategic adjustment of the car BU, the return of Huawei mobile phones may also be one of the relevant factors for this structural adjustment.
A senior industry insider commented that with the return of Huawei mobile phones, Yu Chengdong can focus more on mobile phones.
Huawei's financial report shows that in the first half of this year, Huawei's terminal business revenue was 103.5 billion yuan. After experiencing a 25.4% decline last year, it achieved a 2% growth in the first half of this year.
This is mainly due to the contrarian growth of Huawei mobile phones. At the end of the first quarter and the beginning of the second quarter of this year, Huawei launched a number of new phones such as the P60 series, folding screen Mate
According to Chinese market data released by market research organization IDC, Huawei's mobile phone shipments increased by 76.1% year-on-year in the second quarter, the fastest growth rate among all manufacturers, and tied for fifth place with Xiaomi mobile phones with a market share of 13.0%, and its share increased by 5.7 percentage points compared with the same period last year.
Since September this year, as the Mate60 series has quietly gone on sale, Huawei's 5G mobile phones have officially returned. They are considered by the outside world to have broken through the US blockade. This product has also triggered panic buying by consumers.
Some media quoted data from market research agencies as saying that in the W36 (September 4 to September 10), Huawei's sales market share was as high as 17%, ranking second in the Chinese smartphone market, only 0.2 percentage points lower than the number one Honor. According to supply chain forecasts, by W37 (September 11 to September 17), Huawei is expected to have the largest sales market share.
Previously, Yu Chengdong took over the car BU and promoted the smart car selection model, which was inseparable from the lack of 5G in Huawei mobile phones. He hoped to make up for the lost mobile phone income by selling cars. Now, with the return of Huawei mobile phones, Huawei's offline channels and terminal BG's revenue is expected to be revitalized again. Against this background, Huawei’s internal debate between HI mode and smart car selection mode may not be as fierce as before.
Yu Chengdong previously stated in an interview with the media that in addition to working hours during the day, he spends his time on holidays and evenings on the car business. "Right now, I personally invest a lot of my energy in smart car selection, and maybe 40% of my time is spent on AITO."
Now with the return of Huawei's mobile phone business, Yu Chengdong may have to readjust his energy allocation.
Text | Sina Technology Zhang Jun