A Major Shift for Askar: A Detailed Analysis of the Cooperation Adjustment between Huawei and Seres
Hello everyone, I'm your financial journalist. Recently, there's been a significant development in the automotive industry that many consumers may not have fully realized yet, but the logic behind it is quite clear.
In simple terms, Huawei and Seres (the parent company of Askar) have decided to change their cooperation approach—not to completely split up, but to find a more efficient way to work together.
Previously, Huawei acted as the “chief manager,” taking care of everything from car manufacturing and sales to after-sales service. Now, Huawei is stepping back to serve as a “technical advisor,” handing over the day-to-day operations to Seres.
What exactly is going on, and what impact will this have on us as car buyers, as well as on Huawei and Seres? Let's break it down in five key aspects.
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1. The Core Change: From Huawei’s Full Control to Seres’ Leadership
First, let’s understand what this adjustment entails.
The Previous Model (Hongmeng Smart Driving/Selected Cars Model):
Think of it as Huawei running a “luxury car supermarket.” The Askar, Zhijie, Xiangjie, and Zunjie brands, although under different company names, were essentially powered by Huawei’s technology.
- Product Definition: Huawei made all the decisions—how the cars looked and what features they had.
- Sales Channels: Cars were sold in Huawei stores, alongside smartphones and tablets.
- Marketing: Huawei was responsible for promotion, with Yu Chengdong personally promoting the products.
- After-Sales Service: Services were provided within Huawei’s framework.
- Essence: Huawei was deeply involved; the car companies mainly focused on manufacturing and supply, while Huawei directed the overall strategy.
The New Model (for Askar):
Huawei has announced that the Askar brand will adopt a “light-asset model.”
- Decision-Making Power Returns to Seres: Seres will now decide how products are designed, sold, and serviced.
- Huawei’s Role: Huawei will no longer be the “chief manager” but will provide its technology (such as the Hongmeng operating system, ADAS, motors, etc.) while leaving the operational details to Seres.
- Independent Channels: There are rumors that Askar may establish its own sales and service networks outside Huawei stores.
In Summary: Before, Huawei led the way; now, Seres is taking the lead, with Huawei offering support from the side.
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2. Why Does Seres Want to Become Independent?
Many might wonder why Seres, which was doing so well with products like the Askar M9 and M7, would want to become independent.
Looking at Seres’ financial reports from the first half of the year, the answer becomes clear: Although sales were high, Seres didn’t make much profit and even suffered losses.
- Cost Pressures: The prices of raw materials like lithium carbonate (for batteries) and chips soared, increasing the cost of each car by 15,000 to 20,000 yuan. With Huawei in charge of procurement, Seres had little say in pricing. Now, by managing these purchases independently, Seres can negotiate directly with suppliers and even develop some components itself, saving significant costs.
- Reduced Profit Margins: Under Huawei’s leadership, Huawei took most of the brand premium and profits. Although Seres had high sales, it was more like a high-end contract manufacturer. With independent brand management, more profits can stay with Seres.
- Getting Rid of the Transition Period’s Challenges: Seres’ management believes that previous losses were due to the product transition period. With independent operations, Seres can more flexibly adjust its product strategy and respond to market changes more quickly.
In Simple Terms: Before, Seres was working for Huawei; while the profits were good, they weren’t entirely its own. Now, by becoming its own boss, Seres can control its finances and make decisions to reduce costs and increase efficiency.
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3. Why Is Huawei Willing to Let Go?
Why would Huawei choose to relinquish control? It’s about focusing on its core strengths and proving that its model is scalable.
- Limited Resources: Huawei manages five brands (Askar, Zhijie, Xiangjie, Zunjie, and Shangjie). Since Askar has already succeeded, Huawei doesn’t need to invest more resources in it. However, the other brands still need support. By letting go of Askar, Huawei can focus on the other four brands.
- Proving the Model’s Scalability: There’s been skepticism about whether Askar’s success was due to the specific combination of Huawei and Seres or the model itself. By separating Askar, Huawei can test whether its “selected car” model is truly effective for other brands, which would boost its brand value.
- Lighter Burden: As a technology company, Huawei doesn’t want to be heavily involved in car operations. By separating Askar, it can focus on providing technology and building its core brands.
In Simple Terms: Huawei is like a star coach who once led a team to victory. Now, it wants to hand over the team to an assistant coach (Seres) and focus on other teams. If those teams also perform well, it will confirm the effectiveness of its coaching method.
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4. What’s the Impact on Consumers?
For consumers, the biggest concerns are: “Will the quality of the cars decline? Will after-sales service be affected?”
According to officials and industry insiders, the impact is minimal, and it might even improve.
- Technology Remains the Same: The technology in Askar cars (Hongmeng system, ADAS, motors, etc.) will not change, and Huawei will continue to be a key supplier.
- More Dedicated Service: Askar will have its own dedicated service channels, potentially with faster response times.
- Customer Rights Unchanged: Hongmeng Smart Driving has promised that existing customers’ rights and services will not be affected.
- Potential Risks: The only uncertainty is whether Seres can maintain the same quality of service. However, Seres has stated it will improve efficiency, so the transition should be smooth.
In Simple Terms: It’s like a chain restaurant where the headquarters manages all stores. Now, a local franchisee takes over a store. As long as the headquarters’ standards (the “recipe”) remain the same, the customer experience should remain consistent or even improve.
5. What Does This Mean for the Industry?
This adjustment is not just about Huawei and Seres; it could signal a new trend in cooperation within China’s new energy vehicle industry.
- Evolution of the ‘Huawei Model’: People thought Huawei would stick to one cooperation model. Now, it shows that Huawei can adjust its approach based on the needs of different companies. It can provide more support to established brands and take a more active role in developing new ones.
- Awakening of Car Companies: Seres’ independence shows other companies that they can seek similar semi-independent partnerships for more autonomy and profit.
- Changing Competitive Landscape: With Huawei focusing on other brands, these brands (Zhijie, Xiangjie, Zunjie, Shangjie) will likely see increased promotion and could become market leaders in the next 1-2 years. Askar, without Huawei’s direct support, will have to rely on its own brand strength.
In Summary:
This change is about financial efficiency for Seres and brand recognition for Huawei, while ensuring stable service for consumers. It’s not a complete separation but a more mature and rational division of labor. Huawei and Seres are moving from a “joint venture” to strategic partners. In the future, we may see Askar developing its own path under Seres’ leadership, while Huawei continues to build success with other brands.
For us as consumers, there’s no need to worry too much. You can still buy the cars you want and enjoy the services you’re accustomed to. The focus will just shift from Huawei to Seres.
In conclusion, this is a natural evolution in their partnership, reflecting a more strategic and flexible approach to cooperation in the automotive industry.