Losing the "Huawei dividend" and causing a collapse in sales in the industry

Tech 2023-05-21 00:27:59 Source: Network

Author: Think Tank JunSource: Chief Business Think TankCeles, we are rapidly falling behind.Recently, Celes released its production and sales report for April, achieving a total production of 15338 vehicles that month, a year-on-year decrease of 25

Author: Think Tank Jun

Source: Chief Business Think Tank

Celes, we are rapidly falling behind.

Recently, Celes released its production and sales report for April, achieving a total production of 15338 vehicles that month, a year-on-year decrease of 25.90%; The total sales volume was 14731 units, a year-on-year decrease of 26.49%.

Among them, the performance of Wenjie, which has been supported by Huawei's halo, is also not optimistic. In April, the sales of Celes, mainly focused on sales in the industry, were 2953 units, a year-on-year decrease of 14.13%.

You should know that this number also includes sales of some other models. So looking back at the "Celestial Speed" that was shouted out last year, it has now become a satire.

What's even more embarrassing is that in April, the entire new energy vehicle market not only saw a year-on-year increase of 86.28% in sales, but also new energy vehicle manufacturers such as NIO, Xiaopeng, Ideal, and Jikron all achieved positive growth year-on-year.

Under the weak performance, Selis was also hit hard in the capital market. Compared to its peak of 90.5 yuan/share in 2022, its stock price has dropped to less than 30 yuan, and its market value has evaporated by over 90 billion yuan

Wenjie has also fallen behind

The question of "losing" Huawei's halo is fading its highlight.

One of the most obvious manifestations is that on March 31st, Ren Zhengfei once again emphasized that Huawei does not make cars, and the "HUAWEI" logo was removed from its stores and posters. After that, its sales received another "shock".

According to the latest data released by Celes Group, in the past April, the production of Celes new energy vehicles was 6514 units, a year-on-year decrease of 15.82%; The sales volume was 6917 units, a year-on-year decrease of 19.12%.

Among them, it belongs to the category of new energy vehicles and has attracted much attention from the industry, with sales even more dismal. The M5 only sold 1609 units, and the M7 only sold 828 units.

As a former sales representative, the M5 achieved outstanding sales performance in 2022, with monthly sales exceeding 7000 units at its peak, making it one of the best-selling new energy SUVs among those with over 200000 units.

Taking it a step further, even though the sales of Wenjie have been significantly declining since the beginning of this year, its sales in January still had 4469 units, and now it has dropped to less than 3000 units. The speed of decline is quite unexpected.

Of course, the poor sales in the first year are indeed related to the overall environment. But as we enter March, the sales of other new energy vehicles are noticeably rebounding, and it is clear that this cannot be justified.

Especially the Ideal Car, its performance this year can be described as quite impressive. In the first four months, 15141, 16620, 20823, and 25681 vehicles were delivered, not only without a decline, but also achieving growth for four consecutive months.

And while sales have skyrocketed, ideal performance has also exploded. According to its 2023 first quarter financial report released a few days ago, the actual revenue for that quarter was 18.79 billion yuan, a year-on-year increase of 96.5%.

It is particularly worth mentioning that Ideal also achieved positive profits in this quarter, with a net profit of 930 million yuan for the current period and achieving profits for two consecutive quarters.

So through the overall situation of the new energy vehicle market and the performance of other competitors, it is not difficult to see that the problem of consecutive months of declining sales has clearly encountered significant challenges.

The reason for this is mainly due to the relatively insufficient strength of these car products and frequent price reductions by competitors, as predicted by the founder of Jianyue EV, Yu Jianyue, according to a report from the front line of Digital Intelligence.

Speaking of product strength, the M5 has been on the market for over a year, and the M7 has many competitors in terms of length and wheelbase. And its main selling point of adding programs is indeed a highlight in 2022, but as more and more manufacturers have followed suit in 2023, the attractiveness has undoubtedly been discounted.

In terms of external environment, Tesla's consecutive price reductions undoubtedly "interfered" with consumers' choices, especially the price of the reduced ModelY and Wenjie M5 being extremely close.

So consumers who plan to purchase new cars either switch to Tesla's camp or hold onto the currency and wait and see. Not to mention, there are also a group of strong competitors such as BYD.

3-year net loss of over 7 billion yuan

Without the support of Huawei's halo, the current less optimistic situation in the industry has been exposed. So before that, will the life of Celes be easier?

Actually, it's not entirely true.

Data shows that in 2022, the sales of Celes were 267200 units, of which 135100 units were sold as new energy vehicles, an increase of 226% compared to 2021.

Driven by the soaring sales of new energy vehicles, Celes achieved a revenue of 34.105 billion yuan in 2022, a year-on-year increase of 104.00%, which at first glance can be considered quite impressive.

So, from a purely revenue perspective, the close connection with Huawei has indeed lifted Celes' performance to a new level.

However, measuring the health of a company clearly cannot be solely based on revenue, and another key reference that cannot be ignored is profitability.

However, it is embarrassing that despite its revenue explosion last year, the net loss of Selis has also increased synchronously, reaching 3.832 billion yuan, which is more than double the net loss of 1.824 billion yuan in 2021.

If we add in the net loss attributable to the parent company of 1.729 billion yuan in 2020, then in three years, the cumulative loss of Selis has actually reached over 7 billion yuan

Entering 2023, Selis still not solving the problem of profitability. Data shows that in the first quarter, the revenue of Celes decreased by 0.79% year-on-year to 5.091 billion yuan, with a loss of 924 million yuan for the current period.

So through these numbers, it is not difficult to find that before being bound to Huawei, in fact, Celes had not told a good profit story.

After binding with Huawei, although the story has been told, the losses of Celes still remain, and even expand as a result.

It should be said that Huawei's halo support is not lacking in appeal, but why did Selis not only fail to make money, but also achieve such remarkable results?

In fact, the answer to this question is hidden in Selis' financial report. Looking back at the years when Celes and Huawei have collaborated to sell cars, a significant increase actually comes from marketing expenses.

Taking 2022 as an example, this cost has nearly tripled to 4.82 billion yuan.

In addition, under Huawei's smart selection model, Huawei and Celes also have to split their revenue in the Wenjie series by 1:9. Roughly estimated, for every M5 sold, Huawei can receive 26000 yuan, and for every M7 sold, it can receive 35000 yuan.

In view of this, industry insiders have stated that Huawei's revenue from sales expenses in the third quarter of 2022 reached 710 million yuan

So with the sharp increase in sales expenses and the extraction of a portion of the profits from selling cars, the problem of Celes has become increasingly prominent under the combination of multiple factors.

Dangerous' cliff '

For Celes, a more brutal reality is that the competition among car manufacturers does not stop just because it slows down. On the contrary, this market has never stopped being phased out.

Although the rise of new energy vehicles and the decline of gasoline vehicles are the current trend in the automotive market, in fact, even if we stand at the forefront, life is not always easy, and this situation is not just for the Celestis family.

In terms of profitability, BYD is still the first to bear the brunt in China, which has shaken the dominant position of SAIC in the era of gasoline vehicles.

According to data, BYD surpassed SAIC's 16.1 billion yuan net profit in 2022, becoming the most profitable car manufacturer in China.

Behind them are Dongfeng Group, Great Wall Motor, GAC Group, Chang'an Automobile, etc., and these automobile enterprises themselves are powerful fuel vehicle manufacturers.

On the other hand, among the new energy vehicle manufacturers, BYD is the only one in the camp that can take action. The four new forces listed on the market, namely NIO, Xiaopeng, Ideal, and Zero Run, all suffer losses.

Among them, NIO ranked first with a net loss of 14.6 billion yuan, while Xiaopeng ranked second with a net loss of 9.1 billion yuan, followed by BAIC Blue Valley and Zero Run Automobile.

Therefore, through the survival status of these car companies, it can be seen that although the industry is undergoing significant changes, the joys and sorrows of car companies are not interconnected, and the division is still severe due to drought and waterlogging.

Behind the differentiation, it is also destined that the market will not be calm in the future. Moreover, for Selis, the risks go far beyond that.

Entering 2023, the decline in sales of Celes itself was a crisis, but what surprised both Yu Chengdong and Celes was that at such a node, the binding between Wenjie and Huawei that was too close was stopped by Ren Zhengfei.

Originally, Yu Chengdong may have wanted to leverage Huawei's brand appeal to increase consumer recognition of Wenjie and boost its sales, but such a sudden surprise undoubtedly made Celes' situation even more passive.

So in the midst of the crisis, not only should we consider the sustainability of our cooperation with Huawei, but more importantly, we should also consider how to walk independently and steadily. After all, no matter how strong others are, they are ultimately not as strong as themselves.

Of course, Selis did not sit idly by and was actively 'saving himself'. For example, at the end of March this year, the brand new energy vehicle Blue Electric was released to the public, and its first model, the Blue Electric E5, was also launched simultaneously.

In order to differentiate itself from Wenjie, although Blue Electric is also equipped with Huawei's smart car technology, it did not choose to enter into a smart car cooperation with Huawei, and the power mode and price are also different from Wenjie.

However, the challenge for Blue Electric E5 to shoulder the "rise" banner of Celes is still too small at present.

After all, it is necessary to have both popularity and sales volume, as well as profitability. Even if the market has not been achieved, how can this new brand break out?

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