There are many rumors in the industry about the cooperation between Jianghuai and Huawei in car building. Recently, we finally got the exact news.

　　A few days ago, the official website of China Construction Group announced that the consortium of China Construction Sixth Engineering Group won the EPC project of Anhui Feixi New Energy Automobile Intelligent Industrial Park with a bid value of about 1.544 billion yuan, and pointed out that "the project is a key project in Hefei and will be used by Huawei and Jiangqi Group to jointly develop a new generation of high-end intelligent electric vehicles in Hefei after completion".

　　Yu Chengdong, managing director of Huawei, CEO of Terminal BG and CEO of Smart Car Solution BU, said: "There is cooperation between the two sides, but Huawei does not build cars in person, but cooperates through smart selection mode.".

　　This is the second cooperation between Jianghuai and Huawei. The last cooperation was in 2019. After the two sides signed the agreement, Sihao carried the software and hardware of Huawei. Before Huawei, Jianghuai successively held hands with Weilai and Volkswagen.

　　Jianghuai, try to break through

　　Let's start with the cooperation between JAC and Weilai. In 2016, Weilai and JAC signed a five-year strategic cooperation agreement, in which Weilai is responsible for vehicle design and development, supply chain management, manufacturing technology and quality management, and JAC Automobile builds its own production base and is responsible for vehicle production.

　　Jianghuai collects the commission fee by piece, and collects the operation fee of Hefei factory from Weilai in the first 36 months of production, creating a new revenue path for Jianghuai Automobile from the perspective of "commission". However, as an "assembler", it is always difficult to obtain higher profits. Weilai Automobile is not the way out for JAC.

　　After five years of cooperation in the "OEM" mode, the two sides have ushered in a change. In March 2021, Jianghuai and Weilai established a joint venture, Jianglai Manufacturing, with Jianghuai holding 51% of the shares and becoming the leading partner of the cooperation. Based on the existing OEM cooperation, what is the purpose of Jianglai Manufacturing?

　　Weilai Automobile responded that the newly established joint venture company is responsible for the daily management and operation of the advanced manufacturing base of Jianghuai Weilai Automobile. Jianghuai Automobile said that Jianghuai and Weilai Holding hoped to further deepen cooperation in advanced manufacturing and service management, supply chain and other aspects in the field of intelligent networked new energy vehicles.

　　The two sides answered with different emphasis. Weilai emphasizes daily management and operation, while Jianghuai emphasizes the hope of further deepening cooperation. In fact, in the media report, Jianghuai executives once revealed that although they still focus on the production level at present, Jianghuai and Weilai hope to further expand the areas of cooperation in the future. It is speculated that Jianghuai and Weilai may establish new brands in the future, but this rumor has not yet been settled.

　　Jianghuai Automobile deepened its cooperation with Weilai while holding hands with Volkswagen. In 2017, Jianghuai and Volkswagen established a joint venture Jianghuai Volkswagen, which was later renamed Volkswagen Anhui. The new passenger car brand Sihao released in 2018, the first product Sihao E20X, was launched in May 2018, and in the following years, new models were released in succession, gradually increasing in volume.

　　The passenger car brands under JAC include Sihao, Ruifeng and JAC IEV. At present, Sihao has a significant impact on the sales of passenger cars in Jianghuai. According to the data, the annual sales volume of Sihao in 2022 was 106000. The annual cumulative sales volume of Jianghuai multi-functional passenger vehicles is 16325, which is mainly contributed by "Ruifeng". As for other new energy vehicles of Jianghuai, the sales volume of Jianghuai iEV7 and Jianghuai iEVA50 has dropped to 29 and 527 respectively in the past year.

　　Among Sihao brands, Huaxianzi, Sihao A5 and Sihao X8 PLUS have gradually become the main sales force of Jianghuai Automobile. However, the prices of the three have all dropped below 100000 yuan, bringing limited profits to Jianghuai. The price range of Jianghuai passenger cars is less than 100000 yuan and between 100000 yuan and 200000 yuan. It is difficult to bring high profits for vehicles with large volume, and the lack of medium and high-end models with more than 200000 yuan has become an important reason for the "difficult increase in incremental revenue" of JAC.

　　Is Huawei the best partner of JAC

　　However, the recent re-handling between JAC and Huawei has brought new opportunities to the development of JAC.

　　In Yu Chengdong's response, Huawei is mainly engaged in high-end products and will not involve the market below 200000 yuan. "We will lose money if we do it below 200000 yuan, but we can't do it. There is no such low cost".

　　What one party gives is exactly what the other party needs. Both parties hit it off at once. As Yu Chengdong's voice fell, the share price of JAC Motor rose by 7.97% on the same day. At the same time, the path of cooperation between JAC and Huawei has gradually become clear. Yu Chengdong pointed out that Huawei will select a few auto companies to join the alliance by establishing the Inter-Border Ecological Automobile Alliance, focusing on the high-end auto market, and strengthening the alliance. Through the cooperation of smart selection mode, JAC may become a member of the "ecological alliance of inquiry" in the future.

　　Last March, the official delivery was launched. As of December, the total delivery of the Inquire Series has exceeded 75000, becoming an annual "black horse". Yu Chengdong pointed out that "the next two to three years will be the window period of ICV". Under the halo given by Huawei, there are infinite possibilities for the future of inquiry.

　　Previously, Yu Chengdong proposed to Huawei the goal of achieving the profitability of Huawei's auto business in 2025. As for how to achieve the goal of making profits in the auto sector of Huawei in 2025, Yu Chengdong said that Huawei had to help the auto companies sell 1 million cars first.

　　This statement also revealed that the next few years will be a sprint period for the sales of "Ask the World Ecological Alliance", and JAC will also have the opportunity to achieve the common growth of "sales" and "profits".

　　However, it is worth noting that although the cooperation between Celes and Huawei has led to revenue growth, the net profit is still losing. According to the 2022 annual performance forecast of Celes, it is expected that its revenue in 2022 will reach 33.5 billion to 35 billion yuan, with a year-on-year increase of 100.38% and 109.36%, and its net profit loss is expected to reach 3.55 billion yuan to 3.95 billion yuan, with a non-net profit loss of 3.85 billion yuan to 4.3 billion yuan deducted.

　　This also means that in order to "turn losses into profits" under this model, "Jianghuai border crossing" needs not tens of thousands of vehicles sold annually, but hundreds of thousands, millions of vehicles sold annually.

　　Although under this mode, supported by Huawei's technology and channels, JAC still faces heavy "pressure". Recently, Huawei and Celes signed a deepening cooperation agreement with the goal of realizing the production and sales of 1 million new energy vehicles by 2026. The key to the problem is how to break through the tight encirclement of the future "Jianghuai Inquire".