When it comes to corporate big mouths, Elon Musk has quite a reputation. Tesla’s chairman is legendary for the kind of verbal indiscretions that would get less gifted leaders the chop. Examples range from bizarre ramblings – debating whether aliens built the Pyramids, for instance – to market-moving mishaps like tweeting that Tesla had the capital to take itself private.
Musk’s counterpart in China, Yu Chengdong, is similarly outspoken, to the point at which he is known by netizens as Yu Dazui (Yu the Big Mouth). He is head of Huawei’s consumer business group, which will now include the up-and-coming intelligent vehicle business unit, according to the website 36kr. Huawei has yet to confirm rumours of what would constitute a major strategic shift inside the company. But the media is highlighting that it was Yu and not the car unit’s existing head Xu Zhijun who made a high-profile trip to visit BAIC, one of the group’s key clients, recently.
Yu made his name at Huawei spearheading its entry into the base station business and more recently by building up its smartphone brands. In 2015, he made wider waves by predicting that most of China’s smartphone makers would disappear by 2020, leaving just three players, including Huawei. He added that Huawei’s mass-market brand Honor would surpass Xiaomi in sales and that Huawei would move past Apple and Samsung.
This latter prediction hasn’t quite come to pass. As we reported in WiC519, Huawei has just sold Honor after the US government cut off the supply of Huawei’s self-designed semiconductor chips from their manufacturer, Taiwan’s TSMC.
Honor accounted for about a quarter of Huawei’s smartphone shipments and the sale of the brand will push the company back into fourth place globally behind Apple, Samsung and Xiaomi. That leaves Huawei looking for growth potential in other areas, with industry expert Ding Shaojiang telling Beijing Business News that vehicle-related software and hardware could provide a major boost to the consumer division “which would otherwise have been in decline after what happened to its mobile phone business”.
The world’s biggest car firms will also be watching closely to see whether Huawei decides to create its own car brands. Founder Ren Zhengfei has repeatedly said that it will partner with OEMs rather than compete against them, although sector analysts tell 21CN Business Herald that Huawei has offered similar assurances in the past before launching its own products.
‘Yu the Big Mouth’ has also been insisting that Huawei won’t be making cars, but will provide the communications technologies needed to guide the next generation of autonomous vehicles, CBN newspaper reports. “Anyone who suggests the firm is making vehicles and who interferes with the company’s decisions will be removed from his position,” he warned this month, rather menacingly.
This commitment will be valid for three years, implying that Huawei won’t make an attempt at launching a brand of its own until 2024 at the earliest, CBN predicted.
Others point out that about 70% of a vehicle value is soon likely to be concentrated in the autonomous driving and communication software. So either way, Huawei could still walk away with a chunk of the profits (see WiC500).
To date, Huawei’s main partnership in the car business has been with BAIC New Energy and its high-end ARCFOX brand. This is being headlined as the first deployment at scale of Huawei’s 5G chip – the Balong 5000 – in an intelligent driving system. At the end of October Huawei also unveiled its new HI brand for intelligent vehicle solutions. It will rely on its existing operating system, Harmony OS, as the basis for Level-4 autonomous driving architecture and should eventually encompass a broader computing and communications system that handles a fuller range of requirements including diagnostics and pre-emptive maintenance.
Chang’an Auto is on the verge of becoming another major customer, after announcing a new partnership with Huawei and battery manufacturer, CATL, to produce another high-end car brand.
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