Building cars, these two words have become the most popular words in China. Xiaomi, Huawei, Baidu, Ali, Internet giants without exception, almost all participate in this capital feast.
In this trend, the news of Oppo building cars does not stand out. In terms of influence, Oppo makes cars than Lei Jun’s ambitious speech; In terms of technology, Oppo is no match for Huawei’s autonomous driving system, which took years to build. In terms of publicity, OPPO is not even as good as Meizu and 360. But among the new entrants, Oppo may become a dark horse and a new force in the car market.
They are all crossover vehicles, with different routes
The term “to make a car” literally means to make a car, but the actual context varies. For example, Huawei does not participate in vehicle manufacturing, but focuses on intelligent vehicle technology solutions, providing autonomous driving technology and other services for BAIC, GAC, Chang ‘an, Cyrus and other vehicle manufacturers. In other words, Huawei is trying to become a company like Bosch, providing the world’s leading technology and services to auto makers.
If crossover is an arms race, Huawei is the martial arts master who has taken a back seat. Instead of participating in direct competition, he used his “lifelong devotion” to provide ammunition to other contestants.
Different from Huawei’s choice, Ali and Baidu, the two Internet giants decided to personally end, to participate in this unprecedented “feast”. In January, Baidu partnered with Geely Group to formally form Jidu Auto, a smart car company that is independent of its parent company. Baidu has core technologies such as Apollo autonomous driving, small degree vehicle, Baidu map, and Geely has pure electric SEA vast intelligent evolution experience architecture. The combination of the two is a combination of intelligence and performance of a pure electric vehicle is about to be born.
Baidu chose private companies, while Alibaba chose state-owned enterprises. As early as last November, Alibaba, SAIC and Pudong New Area jointly launched the high-end intelligent pure electric vehicle project “Zhiji Automobile”. The way of cooperation is similar to that of Jidu Automobile. SAIC is responsible for hardware, while Alibaba is responsible for user big data, Damo Institute and Ali cloud ecological support.
However, Ali does not occupy the dominant position in “Zhiji Automobile”, and the 18% investment ratio can only be tied as the second largest shareholder. In terms of technology, Alibaba does not have core technologies such as autonomous driving and on-board map, and big data, Damo Academy and Ali Cloud are not closely related to intelligent cars. To some extent, “Zhiji Automobile” can only be regarded as an angel investment behavior of Alibaba Group.
With Baidu as the joint venture, Ali as the investment and Huawei as the solution provider, different companies choose different routes in the crossover car building race. By contrast, two years ago, Oppo was more likely to choose Huawei’s route, Oppo founder Chen Mingyong said at the time: “There are only two possibilities for Oppo, one is not to do cars, the second is to do cars, and only do what we are good at doing can do, instead of us personally to build a car. If the auto industry doesn’t make cars in the next 10 years, Oppo might make cars, but it doesn’t look like that right now.”
But at that point in 2019, when Xiaomi, Baidu, Alibaba, and Huawei are not in the car business, Chen could be forgiven for making that decision. Back in April this year, when new news came out, Chen Mingyong started a series of research activities, during which he met Zhu Wei, President of China Passenger Car Business Unit of Ningde Times. At the same time, Chen Mingyong also led a visit to China Automotive Research Institute and other institutions.
Ningde Times is the largest power battery manufacturer in China. Half of the new energy vehicles on the road use Ningde Times lithium batteries. If OPPO only wants to be a technology provider that is aloof from the world, there is no reason to cooperate with Ningde Times. China auto research institute and China protection research institute are similar, provide automobile various standards. Chen Mingyong led the talks with the two companies, it is enough to see Oppo for the vehicle manufacturing ambitions.
Mature industrial chain, is smart car the next smart phone?
After four decades of reform and opening up, the smartphone industry is perhaps the most exaggeratingly made-in-China business. Internally, the market share of foreign brands has been completely crushed, and with the exception of Apple, no foreign company has been able to compete with domestic companies. Expansively, smart phones have achieved great success in the market of India, Southeast Asia and Europe. Looking at the whole smart phone industry, except for the two giants Samsung and Apple, the other share is basically taken by domestic brands.
In the process of domestic mobile phone brands “sweeping” the world, the mobile phone industry chain has contributed a lot. It is no exaggeration to say that there is no industry chain pay, there is no domestic mobile phones today. A smart phone, the main components are processor, baseband, memory chip, display screen, camera, fingerprint recognition module, battery, shell. There are a series of excellent parts suppliers in China, such as Spreadtrum, BOE, Shentianma, Huaxing Optoelectronics, Haowei Technology, Shunyu Optics, Oufei Optics, Huiting Technology, Xinwanda, Lens Precision and so on. In addition to Wentai Technology, Foxconn and other OEM factories, the mature industrial chain makes domestic mobile phones invincible.
Compared with smartphones, the supply chain of new energy vehicles is more complex. Take Tesla as an example, including powertrain, electric drive system, charging, chassis, body, central control, interior, exterior decoration and other ten parts. Tesla’s Shanghai factory mass-produces Model 3, involving more than 130 suppliers, half of which are domestic suppliers. In addition, according to Tesla’s plan, the next step will be to gradually increase the proportion of domestic suppliers in order to further reduce costs.
A mature supply chain is the capital of a new industry that an enterprise quickly enters. In those days, Xiaomi made mobile phones without patents or factories, relying on a supply chain integration ability. Now Xiaomi is moving into cars because it is betting on the industry’s mature supply chain to replicate its experience in smartphones. Similar to Xiaomi, Oppo gradually improves its research and development strength and supply chain integration ability in the competition, and enters the automobile industry. The two companies can be said to stand on the same starting line.
OEM emperor “, McNa leads the ODM mode
The supply chain is mature, the integration ability is excellent, looks like OPPO, millet makes the car seems easy. In fact, it is not so simple. Smart phones belong to fast consumer goods. If you replace them in three or two years, your personal safety will not be endangered if you encounter small problems. But the car is not the same, often need to drive at high speed on the road, a little careless will cause traffic accidents. So building a car is far harder than building a mobile phone, and simply integrating the supply chain is not enough.
Make a car, start from zero affirmation no good, had better look for a factory. NIO chose JAC, Ideal Lifan, and Xiaopeng Haima. Through cooperation with these third-tier automobile brands, which are not well known, the mass production of new energy vehicles in a short period of time. Baidu chose Geely and Ali chose SAIC. Although the cooperation methods are different, we can see that they are both looking for mature automobile manufacturers to cooperate.
Oppo makes cars, theoretically there is no problem at all, the domestic Jianghuai, Lifan this level of car manufacturers can be found everywhere, Oppo can choose a cooperation. Further, Oppo could partner with a top OEMs, such as Magna.
When you hear the word OEM, many people first think of Foxconn, the production line workers who assemble mobile phones. In fact, OEM is divided into OEM mode and ODM mode. Under the OEM mode, Company A is responsible for the design, and Company B is responsible for the production, and finally the brand of Company A is affixed. In the ODM mode, OEM B is responsible for the design, OEM B is responsible for the production, and finally the brand of OEM A is attached.
In the mobile phone industry, the ODM model leader is Wentai technology, millet, OPPO, huawei many entry-level mobile phones, the main design is designed by Wentai, and then Wentai OEM, and finally affixed with the trademarks of different brands. In cars, Magna is the undisputed king.
Magna is so strong in vehicle manufacturing that it claims to be able to make all car parts except tyres. In its product line, it includes car seat systems, exterior systems, locking systems, mirror systems, roof systems, body and chassis systems, powertrain and more.
In the field of automobile manufacturing, Magna can be said to be more powerful than JAC, Haima and Lifan. Industry insiders even call Magna “the world’s largest automobile manufacturer without its own brand”.
As one of the world’s top 500 companies, Magna is so powerful that it can be called the emperor of contract manufacturing. But for Oppo and Xiaomi, the crossover players, the Magna deal won’t come cheap. According to Automotive News, Magna produced about 160,000 vehicles in 2019, generating revenue of $6.7 billion and revenue of about $42,000 per vehicle.
Magna OEM is too expensive, so it is also a good choice to set up a new company together. The Polar Fox Alpha S, which became famous at the Shanghai Auto Show, is produced by a joint venture between BAIC and Magna. Therefore, Hei thinks that the easiest way for Oppo to build a car is to cooperate with Magna. As long as the on-board systems and intelligent equipment are fixed, the other parts do not have to worry about themselves.
Building a car is as simple as that
OEMs are responsible for design and manufacturing, while brands only need to control quality and brand image. With the help of ODM OEM model, it seems that making a car is so simple.
More than ten years ago, the media often published articles, ridiculing the domestic car is not powerful, research and development and production is far inferior to foreign brands. In the past ten years, the domestic automobile industry chain has developed vigorously, and OEM and ODM OEM models have become popular. Even Foxconn, which focuses on mobile phone contract manufacturing, has entered the field of ODM contract manufacturing. Last October, Foxconn launched an electric vehicle chassis and software platform called the MIH EV Open Platform.
The so-called platform is one of the concepts of automobile modular production. The same platform adopts the same development system, management system, production process, core components and quality standards. OEM release platform, can be different OEM manufacturers, so as to reduce costs. At the same time, mainstream car manufacturers are also sharing platforms, such as BYD Auto, which released E-platform 3.0, which supports 1000km range and 800V flash charge.
BYD’s E platform 3.0 is open to the public, which means all companies can cooperate with BYD and use the platform to jointly develop cars. To put it simply, if Oppo wants to cooperate with BYD to build a car, E-Platform 3.0 has ready-made integrated parts and body structure, electronic and electrical architecture and vehicle operating system, BYD OS. As long as Oppo will replace the vehicle operating system with its own Color OS, it can build its own new energy vehicles with stickers.
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Magna, Foxconn, BYD, as well as Geely, which is cooperating with Baidu, all share car platforms with the outside world. Transboundary car manufacturers can choose at will and build their own new energy vehicles in a short period of time. It is no exaggeration to say that the production mode of new energy vehicles is highly similar to that of smart phones. The industry chain is mature and the OEM mode is mature. In the future, the competition may be about hardware parameters, system experience and the level of automatic driving. A new era of the automobile has arrived, and we are all there!