AutoBeta(AutoBeta.net)04/29 Report--

On the evening of April 28, Cyrus released its 2022 results. Data show that during the reporting period, Selis's operating income was 34.105 billion yuan, an increase of 104.00% over the same period last year, of which the revenue of new energy vehicles was 24.934 billion yuan, an increase of 482.8% over the same period last year, accounting for 73.1% of the company's operating revenue. The net loss was 3.822 billion yuan, compared with 1.824 billion yuan in the same period. Deducting the non-net loss of 4.296 billion yuan, and the net loss of 2.793 billion yuan in the same period.

Cyrus said that the significant increase in operating revenue was mainly due to the overall effectiveness of the company's new energy transformation strategy, with AITO M5 and M7 setting a record for delivery growth in the year of the launch of new brand models. Affected by the structural shortage of raw materials such as chips and power batteries, and persistently high prices, the company's production costs are under great pressure, squeezing profit margins and affecting profit levels for the whole year. however, benefiting from the economies of scale brought about by the rapid expansion of new car sales, the company's gross profit margin continues to rise.

According to official figures, AITO sold 75000 vehicles in 2022, of which the M5 successfully made it into the top 10 of the new energy SUV sales list with 56855. After partnering with Huawei, especially after the launch of the AITO interface brand, Cyrus has indeed gained a certain amount of voice in the new energy vehicle market, but the outside world has almost attributed all the credit to Huawei, and Cyrus is even regarded as a contract factory.

I have to admit, what would Cyrus have achieved without Huawei's blessing? Fundamentally speaking, most of the models of the AITO brand are designed and developed by Huawei, and the core technology is also in Huawei's hands. At the same time, the models are also included in Huawei's terminal sales channels, and even the new cars are basically chosen to be released at Huawei's new product launch, dominated by Yu Chengdong, while Cyrus is more like a company only responsible for manufacturing. As a result, there is a view that although Huawei does not build cars on several occasions, it plays a huge role in the AITO brand.

Although AITO sales have soared, Cyrus is in the red. The financial report shows that the loss after the cooperation between Cyrus and Huawei has increased significantly, withholding non-net profit of-884 million yuan in 2019,-2.308 billion yuan in 2020,-2.793 billion yuan in 2021, plus-4.296 billion yuan in 2022, Selis has lost more than 10 billion yuan in four years.

A deeper reason is that Cyrus has to pay a high fee to cooperate with Huawei. It is understood that AITO asked to enter Huawei terminal stores, the advantage is that it can reduce the cost and time of store construction, the downside is that Huawei terminal stores also need to charge. In addition, Huawei also gets a share of the sale of AITO models, with Huawei and Cyrus taking a share of about 1:9, with about 2 per cent for Huawei's technology licensing fees and 8 per cent for channel distribution fees. Thus it can be seen that Huawei's benefits in the Selis world mainly come from the reuse of resources, including the long-term benefits of one-time R & D investment, as well as the reuse of existing Huawei channels.

Holding hands with Huawei should be called an once-in-a-century opportunity, even if it continues to lose money. Without cooperation with Huawei, the brand might have disappeared from the passenger car market. After all, before it was renamed Cyrus, Xiaokang shares had no voice in the passenger car market. Although Xiaokang has mature three-power technology and extended-range technology, as well as vehicle R & D and manufacturing capabilities, Huawei has the advantages of ICT technology, popularity, and sales channels urgently needed by Xiaokang.

Like BYD, Chang'an and Great Wall, Xiaokang began to transform from a fuel car company to a new energy car company, but without any size, it finally chose to use the concept of Huawei and its brand awareness in the domestic market to try to use Huawei to press the acceleration button for itself.

Even with huge losses, Cyrus has full confidence in building cars in cooperation with Huawei. Zhang Xinghai, chairman of Selis, said in an interview: "if BMW comes to talk to me about joint venture car construction at this time, I will not do anything. I will unswervingly cooperate with Huawei across the border." It turns out that Selis cooperates with Huawei in exchange for a certain amount of voice, but the bet does have its own initiative, and Huawei has a large number of car companies working with it, even though it has spent three years asking about the brand. In other words, Cyrus has to be Huawei, but Huawei is not the only one.

Of course, Cyrus chose to cooperate with Huawei, which made the wisest decision, and no matter what happened in the future, Huawei pulled Cyrus out of the abyss and was the first car company to rely on Huawei to receive a dividend. However, in the eyes of other carmakers, the risk of this approach is huge. Huawei has gone deep into the soul of Cyrus, which also seems to have become a puppet of Huawei's "car-building".

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