Hello! I'm your financial analysis assistant. This news about Seres and Huawei adjusting their cooperation model may seem like the two giants are splitting up or changing their strategy, but in reality, it's a tactical adjustment made by both parties as the competition in China's automotive industry intensifies, in order to survive and grow.
To help you easily understand the behind-the-scenes reasons, I'll first translate the key points into plain language and then break down the situation into five key aspects for a deeper analysis.
📝 Summary of the Core Content: What Just Happened in One Sentence
Seres (Askar) and Huawei haven't 'broken up'; they've just changed the way they work together.
Previously, Huawei was in charge of all aspects of Seres' operations—product development, sales, and branding, while Seres focused on building the cars. Now, Seres is taking the lead in selling cars, setting prices, and conducting marketing campaigns, while Huawei steps back to provide core technologies like intelligent driving and infotainment systems, and also shares in the profits as a shareholder.
The reason is simple: Seres has seen a decline in sales and increased losses recently, so it urgently needs to adjust prices and products more flexibly to compete in the market. Huawei, on the other hand, has four other brands to manage (Askar, Xiangjie, etc.) and can no longer devote all its resources to Askar alone.
---
🔍 In-Depth Analysis: Five Key Aspects to Understand This Change
1. Why the Sudden Change? It's About Internal Strains and Busy schedules, Not a Lack of Trust
Many people might think the change in cooperation is due to a rift between the two companies. However, it's more about the need for more specialized roles to move forward more efficiently.
- Seres' Challenges: Seres has been facing difficulties. Although sales increased slightly in the first half of the year, revenue decreased, and the company lost over 1.7 billion yuan. Sales didn't improve in July and August. With Huawei taking care of everything before, Seres had less control, but now it needs to make decisions about pricing and product configurations on its own. For example, if the configurations of the Askar M6 and M9 are too similar, consumers might be confused, and Seres needs to decide how to differentiate them and promote them effectively.
- Huawei's Challenges: Huawei now has five brands to manage (Askar, Zhijie, Xiangjie, Zunjie, and Shangjie). It can no longer focus all its energy on Askar as it used to. If it continues to manage everything for Askar, it might neglect the other brands.
- Conclusion: Both parties see the need for Seres to take on more responsibilities, while Huawei focuses on providing advanced technologies. This is about optimizing resource allocation, not a breakdown in their relationship.
2. How Does the Money Work Now? Seres Has to Foot the Bill, but It Could Also Save Some Money
The most significant change is in how the costs are shared:
- Previously: Huawei was in charge of sales, and Seres paid Huawei a large fee for services such as advertising and store construction. This fee was a fixed expense.
- Now: Seres is responsible for sales itself, which means it has to cover these costs out of its own budget.
- Benefits: Seres can negotiate prices more freely. For instance, it can cut back on ineffective ads or inefficient stores, potentially saving money.
- Risks: Seres needs to be efficient with these expenses. If its marketing team is not as skilled as Huawei's, or if it cuts prices too much to boost sales, the savings might not be enough to cover losses.
- Technology Fees Remain the Same: Seres still has to pay for the intelligent driving and infotainment technologies from Huawei's subsidiaries (9.84 billion yuan was spent in the first half of the year). These are fixed costs that cannot be avoided. Seres can only save money by optimizing its supply chain and reducing waste in the sales process.
3. Will Consumers' Buying Experience Change?
This is what ordinary users are concerned about: Can I still buy an Askar at Huawei stores, and who will handle after-sales service?
- No Immediate Changes: The article says that the settlement process for orders placed before September 16th has changed, but the channel authorization and business rules remain the same. So, the staff and products will remain the same, and the service process should not change significantly.
- Long-Term Possibilities: In the future, Askar might establish its own exclusive stores or direct-operated outlets. This would give it more independence from Huawei's stores.
- Potential Risks: Huawei's stores have a large customer base, and many customers buy there because of the Huawei brand. If Askar operates independently, will Huawei continue to promote it as much? If Huawei shifts more resources to other brands, it could impact Askar's sales.
4. Askar's Product Line Faces Competition
The biggest challenge for Seres now is external competition:
- Internal Competition: The Askar M8 (high-end) and M9 (entry-level) differ by only about 20,000 yuan in price. With Huawei's previous control, this was easier to manage. Now, Seres needs to decide whether to lower the price of the M8 if it doesn't sell well or keep it the same if the M9 does well.
- External Competitors: Brands like Li Auto (with the new L series) and Xpeng, Avita, and Lantu are competing in the same price range. These brands also use Huawei's technology but have their own brands. Seres needs to differentiate itself with features like space and comfort, not just the Huawei label.
- Conclusion: Seres can't rely solely on the M9 for success. It needs to balance its product lines to appeal to different budget ranges. Increasing the sales of the M6 might lower the average selling price and reduce profits.
5. Seres' Critical Moment: Can It Make Good Use of This New Freedom?
This change gives Seres a double-edged sword:
- Opportunities: Seres finally has more control and can quickly adjust products based on market feedback and promote them more flexibly.
- Challenges:
1. Marketing: Seres needs to build its own marketing efforts effectively, just as Huawei did.
2. Cost Control: With slowing sales and rising raw material prices (batteries, chips), Seres must be efficient with its expenses.
3. Brand Independence: Seres needs to establish its own brand identity. If consumers still associate it with Huawei, it will remain dependent; if it can establish its own value, it can become independent.
💡 Tips for the Public
1. If you plan to buy an Askar: Don't worry too much about service changes for now; Huawei stores will still sell the cars. In the long term, Askar might emphasize its own brand. Pay attention to official promotions, as they might be more frequent and generous.
2. As an investor: Watch Seres' sales expense ratio and gross margin. If sales increase despite higher expenses, it indicates good cost management. If sales decline, that could be a problem.
3. Industry Trends: Huawei is shifting from building cars to providing technology, which is good for other companies but not necessarily for Seres, as its unique advantage is diminishing. Seres needs to prove its worth beyond Huawei's technology.
In summary: Seres and Huawei haven't separated; they've just changed from a fully managed partnership to a more equal one. For Seres to succeed, it needs to show it can not only build cars but also sell them and make a profit. This is just the beginning of a new challenge for the company.