Original title: Midea "Building Cars" Again: Why did the car-making martyrs who entered the pit in 2003 fight again after 18 years
On the evening of May 17, a piece of news detonated in the automotive industry. Midea announced on its official WeChat account that it will release "new energy vehicles". This news once made people mistakenly believe that Midea should also "build cars." On the one hand, Midea deliberately vaguely stated in the official news, leaving room for speculation. On the other hand, there is a precedent for home appliance companies to build cars. In recent years, Dong Mingzhu, the tycoon of several Chinese home appliance companies, has already made plans to build cars, and after many years of building cars, Skyworth eventually changed the car brand to "Skyworth Cars." From the perspective of Midea itself, in the past two or three years, it has been around the corner in the automotive industry and has a multi-faceted layout, which makes Midea's car production seem more in line with reasoning.
Indeed, Midea wants to build a car for a long time! Many people don't know that before the Internet car-making boom in recent years, there was an industry-wide car-making boom. The last time there was a car manufacturing boom, it was even worse than it is now. At that time, huge capital in the home appliance industry, mobile phone industry, tobacco industry, battery company and other industries flooded into the automotive industry like a tide. "It is no longer just a joke, but has become a compelling economic phenomenon.
Original title: Midea "Building Cars" Again: Why did the car-making martyrs who entered the pit in 2003 fight again after 18 years
"18 years later, he will be another hero." This line seems to be designed for the home appliance giant Midea Group.
On the evening of May 17, a piece of news detonated in the automotive industry. Midea announced on its official WeChat account that it will release "new energy vehicles". This news once made people mistakenly believe that Midea should also "build cars." On the one hand, Midea deliberately vaguely stated in the official news, leaving room for speculation. On the other hand, there is a precedent for home appliance companies to build cars. In recent years, Dong Mingzhu, the tycoon of several Chinese home appliance companies, has already made plans to build cars, and after many years of building cars, Skyworth eventually changed the car brand to "Skyworth Cars." From the perspective of Midea itself, in the past two or three years, it has been around the corner in the automotive industry and has a multi-faceted layout, which makes Midea's car production seem more in line with reasoning.
Indeed, Midea wants to build a car for a long time! Many people don't know that before the Internet car-making boom in recent years, there was an industry-wide car-making boom. The last time there was a car manufacturing boom, it was even worse than it is now. At that time, huge capital in the home appliance industry, mobile phone industry, tobacco industry, battery company and other industries flooded into the automotive industry like a tide. "It is no longer just a joke, but has become a compelling economic phenomenon.
Among them, the first intimate contact between home appliance companies and automobiles, or even earlier, can be traced back to 1996 as early as the contact between the two.
In the 1990s, Anhui Yangzi Group reduced the proportion of its home appliance projects, focusing on large domestic auto companies and the passenger car industry. Subsequently, a large number of home appliance manufacturers such as Chunlan, Oaks, Henan Xinfei, Shandong Xiaoya, etc. swarmed in, but all ended in failure. Until 2011, Huang Hongsheng, founder of Skyworth Group, shifted his sights to the field of new energy commercial vehicles, and the Nanjing King Long Bus he founded became the first successful home appliance company to transplant the automobile industry. In November 2019, Huang Hongsheng went on to enter passenger cars and established Tianmei Automobile. However, Tianmei Automobile had to change its name due to the bumpy development of Tianmei Automobile.
The predecessor of Skyworth Automobile was Tianmei Automobile, and the predecessor of Tianmei Automobile was Kaiwo Automobile.
Around 2003, when the automobile industry had high profit margins, the entire manufacturing industry set off an "automobile fever", and industry giants such as mobile phones, home appliances, and tobacco experimented with the water. For the home appliance auto industry, since 2003, the entire industry has also entered an era of meager profit. The high profits of the auto industry are very attractive to home appliance autos. At that time, many home appliance companies, including Midea, Oaks, Ningbo Bird, etc., invested the profits made in home appliance companies in the early stage into the automobile industry. They plan to invest hundreds of millions or even billions of dollars in the scale of the auto industry.
The first time Midea used to build a car was a relatively simple and rude acquisition model. At that time, there were a large number of state-owned automobile companies in the automobile industry. Midea signed an agreement with the Investment Promotion Bureau of Kunming High-tech Zone in August 2003. At the same time, it announced that it would invest a total of 2 billion yuan within 5 years to provide Yunnan Bus Plant and Yunnan Bus Modification Plant. And other companies are transforming, remodeling modern production lines, shaping the passenger car brand, and planning to build a "Yunnan Midea Automobile Industry City" with vehicle sales exceeding 5 billion yuan. After winning the Yunnan Bus Project, Midea actively contacted Hunan Sanxiang Bus. In October 2003, it reached an agreement with Sanxiang Bus and began to take over the company.
So in just one year, Midea scored twice, flexed its muscles in the automotive industry, and became one of the most popular companies in the home appliance industry to enter the automotive industry. The idea of Midea is exactly the same as that of Greencool at that time. It chose the passenger car industry with relatively low technology content and insufficient competition as its investment object in order to leave more room for its own development. In fact, even 10 years later, including Gree Dong Mingzhu’s announcement of car manufacturing in 2015, it still entered the automotive industry from the passenger car field. Because in the commercial vehicle market, the sensitivity to the brand is lower and the market is easier to open.
At that time, Midea also set the goal of "becoming a leading domestic passenger car manufacturer within 3 to 5 years." However, due to errors in market judgment and the impact of the economic crisis, Midea Group revised its three-year plan at the beginning of 2008. In the blueprint of achieving 120 billion yuan in 2010, the automotive business was not mentioned. In the same year, Midea officially announced the suspension of car manufacturing projects, and initially failed in car manufacturing. In 2009, the Changsha Municipal Government of Hunan Province spent 108 million yuan to acquire Midea's Sanxiang Bus Company Changsha production base; BYD invested 60 million yuan to take over Midea's Changsha automobile production base for the production of electric buses and chassis.
In this period of car manufacturing, Midea persisted for a long time. Another home appliance giant Oaks only briefly involved in two years and withdrew from the auto manufacturing industry early in 2005. At that time, Oaks spokesman Huang Jiangwei concluded, "Aux was treated as a car dream, and the price of this dream was 40 million yuan." Unlike Oaks' full-line withdrawal, Midea did not completely give up on the car business. In 2016, at the second Asian Consumer Electronics Show, Midea joined hands with OnStar to extend its tentacles to the automotive Internet, which is also regarded by the industry as a signal of Midea Group's "resurrection" in the automotive field.
In 2018, Midea established the protagonist company of this auto parts conference-Guangzhou Welling Auto Parts Co., Ltd. This Midea Group subsidiary is the first subsidiary to put the word "auto" on it. Subsequently, Midea spent 740 million yuan to win 23.73% of the voting rights of Hekang Xinneng in 2020. Through its subsidiary group Midea HVAC, Midea has indirectly become the controlling shareholder of Hekang Xinneng and the real power holder. Hekang New Energy has long occupied a position in the field of new energy vehicles and has formed supporting relationships with automobile companies such as FAW and JAC.
Although in 2020, Midea Group executives stated that, "at least for the time being, there is no consideration for car building." For this acquisition, more considerations are given to the integration of the industry, including Hiconn’s high and low voltage inverters and servos. The business and Midea Group’s business layout are synergistic, but the outside world still believes that Midea’s car manufacturing will “make a comeback”. It's just that this time the idea is obviously different from the last time.
Hekang Xinneng was established in 2003, and its business is an enterprise specializing in R&D and production of high-voltage and high-power inverters. This company went public in 2010. Judging from the industrial and commercial information disclosed by it, its business scope also involves the technological development of new energy vehicles and their charging pile industrial chain operations. In the field of new energy vehicles, Hekang New Energy provides products and services such as new energy vehicle powertrains, motor controllers, auxiliary power systems, smart charging piles for electric vehicles and the construction of new energy vehicle rental platforms.
Now, Midea is entering the car circle again. It is different from Gree's choice of vehicle company Yinlong, and it is also different from Skyworth's idea of doing passenger cars. It chooses to start with parts companies. Obviously, Midea also learned some lessons in the last car building, so this time it adopted a different strategy. At present, in terms of new energy vehicle powertrains and key components, related products of Hekang New Energy have formed supporting relationships with many mainstream domestic automakers such as FAW and JAC.
Only a few months after this acquisition, Midea adjusted its business group layout in December 2020. The overall business structure changed from the four major sectors of consumer electronics, HVAC, robotics and automation systems, and innovative business to five major business sectors. That is, the smart home business group, the electromechanical business group, the HVAC and building business unit, the robotics and automation business unit, and the digital innovation business. The newly established electromechanical business group has laid out auto parts products with motors, electronic controls and compressors as the core. The product line involves motor drive systems, thermal management systems and auxiliary/automatic driving systems.
KUGA robot acquired by Midea
In the press conference on May 18, Midea's so-called "car making" was also concentrated on auto parts. In the video given by the official WeChat, Midea stated that it will release new Midea Welling auto parts to create a greener travel experience.
In fact, there have been signs of the new products released this time. Earlier, some media said that Midea Welling Auto Parts plans to hold the "2021 Welling Auto Parts Production and Product Launch Conference for the Three Major Product Lines" on May 18, preparing to deepen the field of auto parts. The production of the three major product lines has been determined before. At the Shanghai Auto Show that opened on April 19, Midea Welling Auto Parts showcased 3 major systems and 5 types of products to consumers, including drive motors, electric compressors, Five new products, electronic water pump, electronic oil pump, and electronic power steering motor, cover three major systems including assisted/automatic driving system, thermal management system, and motor drive system.
Judging from this warm-up poster, it is speculated that the new products to be released may include products such as motors for new energy vehicles and automotive air conditioners. Automotive air conditioners are a market that home appliance companies have always wanted to enter, but it is a pity that neither Gree nor Midea have been able to gain more room for expansion in this market segment. But the automotive air-conditioning market is not a small market segment. From the perspective of automobile air conditioners, competition is mainly concentrated on the compressor, which is the core component of automobile air conditioners.
If it is assumed that there is an average of 1 automobile air-conditioning compressor per vehicle, and the average service life of automobile air-conditioning compressors is 10 years, if the automobile air-conditioning compressor required for after-sales service is about 4% of the total demand, then China's automobile air-conditioning compressor in 2020 The demand is 26.234 million units. The survey data shows that the market size of China's automotive air-conditioning compressors in 2019 is about 11.29 billion yuan, and the market size of China's automotive air-conditioning compressors in 2020 is about 11.82 billion yuan, a year-on-year increase of 4.8% compared to 2019. But at present, the production of international automobile air-conditioning compressors is mainly concentrated in Japanese, American and German companies, such as Denso, Panasonic, Toshiba, Mitsubishi Heavy Industries, and Delphi, among which Japanese manufacturers have the largest output.
Global market share of automotive air conditioners
In general, local automotive air-conditioning companies are still at a disadvantage, and most of the vehicle supporting market is in the hands of foreign-funded companies. With the progress of domestic automobile air-conditioning manufacturing level, several outstanding enterprises have also appeared. Such as Chongqing Construction, Nanjing Aotejia and so on. However, almost no white goods companies can enter the automotive field and occupy a certain market scale. As far as Midea is concerned, it chose to acquire the qualifications to enter the market through acquisitions.
After the "second entry into the palace", Midea was obviously more cautious than the last time it built a car, and its strategy is similar to that of a company like Huawei. Instead of building a complete car, it is better to make parts. Among the five major products currently identified by Midea, there are five products including drive motors, electric compressors, electronic water pumps, electronic oil pumps, and electronic power steering motors. These products are basically related to Midea and Hekang Xinneng itself. In 2019, Midea has joined forces with Baoneng Motors. The two Shenzhen-based companies will cooperate in smart manufacturing, auto parts, and new retail models. However, the two have not announced specific and cooperative content, and there is no corresponding progress announcement. The beauty that does not build a car may be able to cut into the auto industry in a true sense this time.
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