Sony, Midea, Gree, Hisense and other leading household electrical appliance enterprises are cross-border seizing new opportunities for electric vehicles. Compared with the previous round of “car building” fever of home appliance enterprises more than a decade ago, the new round of “car building” fever of home appliance enterprises did not “collide head-on” with traditional automobile giants, but found another way to choose a variety of differentiated modes and cut into the industrial chain of new energy vehicles.
Sony announced last week that it would establish a joint venture with Honda to provide a mobile travel service platform for the new vehicles of the joint venture in the future; Last month, Midea Group Co.Ltd(000333) ( Midea Group Co.Ltd(000333) . SZ) invested 10 billion yuan in Anqing, Anhui Province to build a new auto parts production base; Dong Mingzhu, chairman and President of Gree Electric Appliances Inc.Of Zhuhai(000651) ( Gree Electric Appliances Inc.Of Zhuhai(000651) . SZ), also said last month that she would make efforts to develop new energy commercial vehicles.
Which of the three modes of “car building” of home appliance enterprises can go further in the long run?
home appliance industry’s new round of “car making” craze
On March 4, Sony announced that it plans to establish a joint venture with Honda to combine its development and application expertise in imaging, sensing, communication, network and entertainment technology with Honda’s vehicle development, manufacturing and after-sales capabilities. The two sides plan to jointly produce and sell high value-added electric vehicles. The goal is to establish a new company in 2022 and start selling the first electric vehicle of the new company in 2025.
This is just two months after Sony announced the establishment of Sony mobile travel company in 2022 CES, and two years after Sony launched the smart car concept vehicle vision in 2020 ces. Teaming up with Honda means that Sony’s “car building” has officially landed.
Sony’s “car making” is different from the traditional concept of “car making”. Sony mainly provides a “soft” system. Because it is the world’s largest supplier of image sensors and has rich entertainment resources such as film and television, music and games, Sony wants to use these accumulation to occupy a place in the electric vehicle market, including providing on-board entertainment content system, auxiliary driving system, etc.
Recently, it is reported that Volkswagen plans to buy Huawei’s automatic driving department for billions of euros. A year ago, Hon Hai signed a cooperation agreement with Geely. Many cooperation that have occurred or are brewing show that the “marriage” between electronic technology enterprises and traditional automobile enterprises has become a trend. Because the future smart car can be regarded as a mobile smart appliance, which is the intersection of old and new forces.
Kenichiro Yoshida, chairman, President and CEO of Sony Group, said that through alliance with Honda, he hopes to contribute to mobile travel with safety, entertainment and adaptability as the core on the basis of the vision of “making the mobile travel space full of emotion”. While Honda’s director, President and CEO mihom said that the new company will face the world and further innovate and promote mobile travel.
The new concept of Sony’s vision-v was exhibited on February 2021. Sony began 5g driving test in April 2021. In terms of safety, 360 degree sensors are installed around the vehicle, and Sony is ready to release L2 + driver assistance system. In terms of entertainment, Sony provides music, video, games and other services.
To put it bluntly, Sony can sell its entertainment content and services and accumulate “fans” on the new generation of intelligent electric vehicles in the future. Sony was once dragged down by the losses of color TV, mobile phone and other electronic hardware businesses. Now the mobile phone business has been greatly “downsized” and the color TV business has been transformed to high-end. In the future, Sony doesn’t want to take too much risk of hardware profit and loss, but wants to make money for services.
Midea once suffered losses in “making cars”. It acquired Yunnan bus and other businesses more than ten years ago, and then terminated. Therefore, Midea will not make the whole vehicle this time, but accessories. On February 16, the new base of new energy auto parts of Anqing Weiling Auto Parts Co., Ltd. (hereinafter referred to as anqing Weiling) under Midea industrial technology laid the foundation, with a total investment of about 11 billion yuan, which is the project with the largest total investment amount in Midea Group Co.Ltd(000333) history. The new base can form an annual production capacity of 60 million sets of auto parts and realize an annual output value of 40 billion yuan.
Gree’s involvement in new energy vehicles is also based on the core component – new energy battery. Last August, Gree Electric Appliances Inc.Of Zhuhai(000651) acquired the controlling interest of Yinlong new energy (later renamed “Gree titanium new energy”). In terms of safety, Dong Mingzhu, chairman and President of the environmental sanitation company, said that in this year’s new energy, he will not be the president of the new energy company.
open up the second track of new energy vehicles
With the sluggish growth of the home appliance market in recent years and the continuous rise of raw material costs, leading home appliance enterprises are opening up a second track. The transformation from fuel vehicles to new energy vehicles is a once-in-a-century Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) opportunity. Leading household appliance enterprises have taken this “express” one after another, hoping to rely on their own resources and advantages to get the “ticket” to enter the new energy vehicle industry chain and form a new growth point.
According to the total data provided by AVC to the first financial reporter, the retail sales of China’s home appliance market in 2021 was 760.3 billion yuan, an increase of 3.6% over 2020, but a decrease of 7.4% over 2019. Under the guidance of China’s goal of “double carbon” (achieving carbon peak by 2030 and carbon neutralization by 2060), the Shanxi Guoxin Energy Corporation Limited(600617) automobile market will enter an explosive growth stage in the middle of 2021, the sales volume of Shanxi Guoxin Energy Corporation Limited(600617) automobile is expected to exceed 5 million in the middle of 2022 and expand to 30 million in 2030.
The new base of Anqing Weiling mainly produces products such as power steering motor, electric compressor of new energy vehicles and drive motor of new energy vehicles, and creates an R & D Center for three systems: thermal management, main drive and auxiliary / intelligent driving. In the next ten years, Midea Group Co.Ltd(000333) will invest US $1 billion to tackle key technical problems and strive to become a system level solution supplier for new energy vehicles.
“(new energy vehicles) this track is developing very rapidly. Sometimes we don’t feel like I’m staying.” Fu Yongjun, Midea Group Co.Ltd(000333) vice president and President of Midea industrial technology, said that although Midea started layout four years ago, many auto parts began mass production in 2021. Midea’s rotary carbon dioxide automotive air conditioning compressor has cooperation projects with Volkswagen and other automotive enterprises.
Midea is the world’s largest supplier of household air conditioning compressors, and its compressor business is extending from the field of household air conditioning to the field of automotive air conditioning. Chen Jintao, general manager of Weiling auto parts company, said that unlike traditional vehicles, new energy vehicles have no waste heat of the engine and need to be cooled and heated, so the thermal management system of new energy vehicles has become complex.
“Our current playing style is’ innovation, overcoming difficulties and being fast ‘.” Chen Jintao said that the core parts related to thermal management have been arranged, especially the compressor as the leading product. The pain points of this industry are obvious, including the problem of mileage in winter. The mileage will be reduced by half as soon as the air conditioner is turned on. “We need to help customers solve these problems.”.
At the same time, Midea, relying on its own technology and accumulation in motors for household appliances, is also expanding to motors for new energy vehicles.
“In 2021, we completed the delivery of 100 million household air conditioning compressors and started the production of the first automobile air conditioning compressor and the first automobile main drive motor.” Fu Yongjun said that the track of new energy vehicles has been paved.
Midea Group Co.Ltd(000333) in response to investors’ questions on the interactive platform of Shenzhen Stock Exchange on January 19 this year, Midea said that Midea continued to break through the border. Among them, the electromechanical business group has been upgraded to an industrial technology business group, and the new energy vehicle parts business has come to the inflection point of take-off.
Dong Mingzhu is also full of confidence in the new energy sector of Gree Electric Appliances Inc.Of Zhuhai(000651) . At present, Gree titanium new energy commercial vehicle products have covered models ranging from 6.8m to 18m, and municipal vehicles, construction machinery, logistics vehicles, hydrogen fuel, hybrid and other models have been arranged at the same time.
Hisense Home Appliances Group Co.Ltd(000921) ( Hisense Home Appliances Group Co.Ltd(000921) . SZ) invested 1.302 billion yuan to acquire Japan’s Sandian holdings in March last year and obtained about 75% of the voting rights. Sandian holdings is a first-class manufacturing supplier of automobile air conditioning compressor and automobile air conditioning system, mainly supplying automobile brands in Japan and Europe. Hisense and the three electronic control units will jointly develop technologies such as comprehensive thermal management and vehicle network connection of new energy vehicles.
can be the last “leftover”
The fast-growing new energy vehicle market looks beautiful, but due to the long industrial chain, intensified competition, the market still needs to be cultivated, the business model needs to be improved, there are still many challenges and risks, and there is uncertainty about who can become the final winner.
Therefore, Sony has adopted the cooperation mode to “land” the car dream. Honda will be responsible for producing the first electric vehicle of its new joint venture with Sony at its automobile factory. In fact, Honda’s new pure electric vehicle brand “E: n” is about to launch its first electric vehicle. It also joins hands with Sony to develop high value-added electric vehicles, which is also to walk on two legs and increase the probability of success.
For Sony, after experiencing the difficult turnaround of color TV, mobile phone and other electronic businesses a few years ago, it is constantly strengthening its entertainment content businesses such as games, film and television, music and so on. Sony is becoming more and more “soft”. From its performance in the third quarter of fiscal year 2021 (October December last year), the electronic products and solutions business (EP & S) accounts for only 22.66% of Sony’s overall revenue.
Sony’s revenue increased by 13% year-on-year and its operating profit increased by 15% year-on-year, mainly relying on the growth of film and television, music, sensors and other sales. The profit of Tesla is not realized by selling carbon in the fiscal year 2020, but by selling carbon for many years. In order to avoid falling back into the mire of losses in electronic hardware, Sony is quite cautious about getting involved in automotive hardware.
Gree Electric Appliances Inc.Of Zhuhai(000651) acquisition of Yinlong is also full of twists and turns. Due to the risks involved in new energy vehicles, Dong Mingzhu’s proposal to Gree Electric Appliances Inc.Of Zhuhai(000651) acquire Yinlong was rejected by shareholders a few years ago, so she had to take a stake in Yinlong herself. It was not until August 31, 2021 that Gree Electric Appliances Inc.Of Zhuhai(000651) won 30.47% of the equity of Yinlong at about RMB 1.828 billion by participating in the judicial auction.
At present, Gree titanium (formerly Yinlong) is still exploring the path of turning losses. Before being acquired by Gree Electric Appliances Inc.Of Zhuhai(000651) company, Yinlong realized a revenue of 1.058 billion yuan and a net profit loss of 760 million yuan from January to July 2021, which was larger than the net profit loss of 688 million yuan in 202 Norinco International Cooperation Ltd(000065) 1 said it would straighten out Yinlong’s corporate governance structure, revitalize existing production capacity and enhance its profitability.
Although it has started mass production of new energy vehicle parts, Midea still feels the pressure of competition. Fu Yongjun said that it is possible that the sales volume of Shanxi Guoxin Energy Corporation Limited(600617) cars will exceed 10 million in 2025. If they have not become the main supplier on this track before, they may not have the opportunity. “In order to shorten the necessary verification cycle for entering the automotive industry, if the target enterprises with certain recognition and experience in the industry, we will also explore entering through mergers and acquisitions.”
Wen Jianping, chairman of Aowei cloud network, analyzed to the first financial reporter that the leading household appliance enterprises are listed companies and need to pursue the hot spots of the capital market. Under the guidance of the national strategy, the new energy vehicle industry is relatively easy to find funds. At present, the new energy vehicle industry chain is becoming more and more perfect, and the entry threshold is declining, while household appliance enterprises have experience in large-scale manufacturing. However, the core technology and talents involved in Xinneng automobile industry are more demanding than the household appliance industry, so we should choose and layout carefully.
