[car home Industry] The cross-border practice of "singing and guiding when acting well" is not only in the entertainment circle, but also in all walks of life. Especially under the new energy outlet, head enterprises in various fields have laid out here one after another. Although there is a weakening trend in the past two years, there are still strong entrants. This is not the case. Recently, Midea Group spent 740 million yuan to win 23.73% of the voting rights of Hekang Xinneng, and indirectly became the controlling shareholder of Hekang Xinneng through its subordinate group Midea HVAC, becoming the real power holder.
Hekang Xinneng has long occupied a place in the field of new energy vehicles, and has formed a supporting relationship with FAW, Jianghuai and other car companies. This makes the outside world think that the acquisition of Hekang Xinneng is a signal that Midea wants to return to the "car circle". However, before Oaks "bought a lesson for 40 million yuan", and after Gree "struggled in the sea of suffering", why should Midea "get into the muddy water again"?
■ Midea’s car "Second Palace"
This is not the first time that Midea wants to build a car. As early as 2003, Midea announced that it would start with passenger cars and enter the automobile industry with high profile. At that time, due to the high profit margin of the automobile industry, the whole manufacturing industry set off a "car fever", and giants in the mobile phone, home appliances, tobacco and other industries tried water one after another. Midea signed a 2 billion yuan "Yunnan Midea Automobile Integration Project"; Aux Group invested 50 million yuan to acquire 95% shares of Shenyang Shuangma Automobile. Bird, Wuliangye and Hongta are also planning to set foot in the automobile field with a lot of money. With the continuous influx of capital and enterprises, there is quite a trend of building cars with new energy.
In the next three years or so, Midea Group moved the fastest, successively acquiring Yunnan Bus Factory, Yunnan Aerospace Shenzhou Automobile Co., Ltd. and Hunan Sanxiang Bus Group Co., Ltd., and building two major bus manufacturing bases of Midea-Kunming New Base and Changsha New Base, with the manufacturing capacity of 10,000 buses and special chassis. And set the goal of "becoming a leading bus manufacturer in China within 3 to 5 years".
In 2009, BYD acquired Changsha Automobile Production Base of Midea.
However, due to the misjudgment of the market and the impact of the economic crisis, Midea Group revised its three-year plan in early 2008, and the automobile business was not mentioned in the blueprint for realizing 120 billion yuan in 2010. In the same year, Midea officially announced the suspension of the car-making project, and its initial involvement in the car-making circle failed. In 2009, the Changsha Municipal Government of Hunan Province spent RMB 108 million to acquire the Changsha production base of Midea Sanxiang Bus Company. BYD invested 60 million yuan to take over the Changsha automobile production base of Midea to produce electric buses and chassis.
In this period of car-building tide, Midea persisted for a long time, while another big household appliance company, Oaks, only briefly set foot in the automobile manufacturing industry for two years and withdrew from it early in 2005. At that time, Oaks spokesperson Huang Jiangwei concluded, "Oaks is a car dream, and the price of this dream is 40 million yuan."
Unlike the full withdrawal of Oaks, Midea Group has been "lurking" and its voice about building a car has not stopped. In 2016, at the 2nd Asian Consumer Electronics Show, Midea joined hands with OnStar to extend its reach to the automotive Internet, which was also regarded by the industry as a signal that Midea Group "made a comeback" in the automotive field. This time, a one-time 740 million yuan is thrown. Undoubtedly, Midea’s determination to return to the car circle has been decided.
Although Jiang Peng, secretary of the board of directors of Midea Group, said that "at least there is no consideration for building a car for the time being". For this acquisition, more consideration is given to the synergy and integration of industries, including the synergy between the high and low voltage frequency conversion and servo services of Hekang Xinneng and the business layout of Midea Group. However, the outside world still thinks that the beautiful car will "make a comeback."
■ Who is Hekang Xinneng?
Midea Group, which is "second in the palace", will obviously be more cautious in choosing cars, which also makes the outside world more curious about Hekang Xinneng.
According to the data of enterprise investigation, Hekang Xinneng was established in 2003, which is an enterprise specializing in R&D and production of high-voltage and high-power inverters. Judging from the industrial and commercial information disclosed, its business scope also involves the technical development of the industrial chain operation of new energy vehicles and their charging piles.
Unlike Gree’s choice of Yinlong, a vehicle manufacturer, Midea’s re-entry into the car circle starts with parts companies. At present, in the powertrain and key parts of new energy vehicles, Hekang Xinneng related products have formed supporting relationships with many domestic mainstream car manufacturers such as FAW and Jianghuai.
It is beneficial to Midea Group’s investment. On the day of the announcement on March 25, 2020, the share price of Hekang Xinneng went up strongly, and the share price of Midea Group also rose by more than 3%. Hekang Xinneng said in the announcement that through this transaction, the company entered the system of Midea Group, and with the help of Midea Group’s excellent management model and strong R&D and production capacity, it was conducive to improving the overall performance of the company.
Subsequently, for several consecutive trading days, the share price of Hekang Xinneng continued to limit, which also attracted the attention of Shenzhen Stock Exchange. On April 7, Hekang Xinneng received an inquiry letter from Shenzhen Stock Exchange, asking it to supplement the specific content of the new energy automobile business, the income, profit and proportion realized in the last three years, and whether it has worked out specific plans or arrangements with Midea HVAC for the future development of the business.
At present, Hekang Xinneng has not responded to the inquiry, pending the release of further revenue information, etc., or we can have a deeper understanding of Hekang Xinneng and the reasons for Midea’s acquisition.
■ Why does the home appliance industry love "building cars"?
The first intimate contact between traditional home appliance enterprises and automobiles can be traced back to 1996. In the 1990s, Anhui Yangzi Group reduced the proportion of its home appliance projects, focusing on large domestic automobile enterprises and bus industry. Subsequently, a large number of home appliance manufacturers such as Chunlan, Oaks, Henan Xinfei, and Shandong Xiaoya poured in, but all ended in failure.
Until 2011, Huang Hongsheng, the founder of Skyworth Group, turned his attention to the field of new energy commercial vehicles, and the Nanjing Jinlong Bus he founded became the first case in which a home appliance enterprise successfully transplanted the automobile industry. In November 2019, Huang Hongsheng went on to enter passenger cars and set up Tianmei Automobile. The first model BE11 was officially named ET5, and the new car was positioned as a pure electric medium-sized SUV, which will go on sale in the third quarter of this year.
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It can be said that home appliance enterprises are "almost extinct" in the automotive field. Why did Midea choose to enter strongly at this time? A big reason is that you need to find new business growth points.
After the revenue in 2017 exceeded 200 billion yuan, the growth rate of Midea Group’s main business slowed down significantly. In 2018, Midea Group achieved an operating income of 259.665 billion yuan, a year-on-year increase of 7.87%; The net profit attributable to shareholders of listed companies was 20.23 billion yuan, a year-on-year increase of 17.05%. Among them, the consumer electronics business including kitchen appliances, refrigerators, washing machines and various small household appliances achieved revenue of 102.993 billion yuan, up 4.3% year-on-year, and its share in the US revenue dropped from 41.02% to 39.66%. It can be seen that the growth of Midea Group’s consumer electronics business is exhausted.
Car air conditioning business or a good choice. Although Midea, Gree and other enterprises have a high market share in household air conditioning, they can hardly rank in automobile air conditioning. The core technology of compressor, an important accessory of automobile air conditioning, is in the hands of foreign enterprises. Without the core technology, there is no right to speak. When the automobile is transformed from a fuel vehicle to a new energy source, the power source of air conditioning and refrigeration is also changed from an engine to a battery. The development of new energy vehicles has also brought opportunities to China enterprises in the field of automobile air conditioning. This may also explain why beauty should start with parts.
If Midea can use this as a vehicle air conditioner, the input-output ratio is huge and positive. Analysts in the automotive industry believe that if Midea can get 10 million orders for a car air conditioner with a price of 2,000 yuan, the market will be at the level of hundreds of billions, which is still very attractive compared with billions of investments. Of course, Gree also wants to eat this cake, and the "struggle" between them will extend from home appliances to cars.
"Midea Group should also join the smart car ecosystem"
In addition to the air-conditioning business, with the upgrading of the intelligent level of automobiles, the smart car ecosystem is also a big "selling point" that car companies are striving to build. Using mobile intelligent terminals like cars to connect them with beautiful smart home products and consumption ecology may lead to new business models and unlimited imagination.
Especially in recent years, Midea Group has been active in the market under the label of "Global Technology Group". On the one hand, it acquired the German robot giant KUKA; On the other hand, Midea Group also reached a strategic cooperation with SAIC-GM Anjixing on smart home and car networking applications. This time, the attitude of increasing investment in the automobile circle and breaking into the whole ecosystem of the Internet of Things is obvious.
■ Full text summary
Li Shanyou, the founder of Chaos University, mentioned in a sharing: "The first curve of any enterprise’s development is bound to encounter a limit point. Once the limit point appears, the growth of the enterprise is almost irreversible. If you don’t innovate, you will die, but innovation may be death. This is a dilemma between management and innovation." How to balance and innovate is something that managers need to ponder carefully. At the moment when Midea Group’s main business is approaching the ceiling, it is inevitable to seek a breakthrough. After the choice, how to further choose and ensure that the new choice can hold up a sky in a few years is a problem that enterprises need to think about. For us ordinary spectators, the "war" between Midea and Gree has been "eating melons" for a long time from the field of home appliances to the car circle. Of course, we will also pay attention to the follow-up story. (Text/car home Zhang Wei)
