The Significance Behind Chang'an Zhu Huarong Meeting Huawei Ren Zhengfei

On the evening of August 9, Zhu Huarong, Chairman of Changan Automobile, mentioned on his personal social media platform that he visited Huawei's founder Ren Zhengfei in Shenzhen the previous day. The two sides exchanged and learned from each other regarding the state of industry competition and future competitive patterns. "Mr. Ren also provided targeted and instructive suggestions on supporting Changan Automobile and the Avatr brand."

In addition, Zhu Huarong also held discussions and exchanges with Xu Zhijun, Rotating Chairman of Huawei, and Richard Yu (Yu Chengdong), Executive Director and Chairman of the Consumer Business Group.

On the surface, this is merely a high-level visit between partners, but considering the timing, cooperation background, and industry trends, there may be deeper implications behind this meeting.

Image source: Zhu Huarong's personal social media platform

Meeting Behind the Scenes: 11 Days Since the Establishment of New Chang'an

Zhu Huarong of Chang'an met with Ren Zhengfei of Huawei, just 11 days after the establishment of New Chang'an.

On July 29, Changan Automobile completed a major organizational restructuring, and China Changan Automobile Group Co., Ltd. (New Changan) was officially established. The new Changan has been elevated to the same level as China FAW and Dongfeng Group, becoming a vice-ministerial level central enterprise.

The new Chang'an was split from the original China South Industries Group Corporation, possessing 117 subsidiaries, covering businesses such as complete vehicles and auto parts, automobile sales, financial and logistics services, motorcycles, etc. This means that under the new organizational structure, the new Chang'an has not only re-integrated traditional fuel vehicle business with new energy and intelligent business, but more importantly, its business scope has expanded to the field of auto parts.

Zhu Huarong stated that the change in identity to a new central enterprise brings six major advantages: "strategic guidance is more prominent, resource integration is more efficient, technological innovation is more focused, coordination between whole and parts is smoother, incentive mechanisms are more perfected, and risk prevention and control are more robust."

However, this change has led to a subtle overlap between New Changan and Huawei in certain business sectors. Through its automotive business unit, Huawei has become a significant supplier of automotive components, offering core parts such as advanced driver-assistance systems, smart cockpits, and electric drive systems. After the restructuring, New Changan's business landscape similarly involves the operation and development of component enterprises.

The restructuring of the new Chang'an organization inevitably entails a reassessment of strategic planning. Chang'an Automobile needs to clarify its positioning in the new competitive landscape, particularly on how to achieve breakthroughs in the critical field of intelligence. As an important partner of Chang'an Automobile in the field of intelligence, Huawei's founder Ren Zhengfei's strategic thinking and industry insights are of significant reference value for the development direction of the new Chang'an.

Image Source: Zhu Huarong's personal social media platform

In this context, Zhu Huarong's decision to visit Ren Zhengfei in the early stages of New Changan's establishment clearly reflects deeper strategic considerations. Both parties need to engage in in-depth discussions on "industry competition dynamics and future competitive landscape," not only to deepen cooperation but also to redefine their positions and boundaries under the new business framework.

Some industry insiders predict that the "targeted and guiding suggestions" Ren Zhengfei has given to Changan Automobile and the Avatr brand are likely related to how to achieve healthy competition and optimization in the context of overlapping businesses, as well as how to better leverage their respective strengths. Such strategic dialogue is of great significance for clarifying the relationship between the two parties and avoiding vicious competition.

Intelligentization, Huawei plays a pivotal role.

Moreover, Huawei plays a pivotal role in the intelligence sector of Chang'an.

The Avita, a landmark collaboration project, is a high-end smart electric vehicle brand jointly developed by Changan, Huawei, and CATL. It carries Changan Automobile's important strategic intention of elevating its brand. Huawei not only provides Avita with HarmonyOS cockpit, ADS assisted driving system, and other software and hardware support but also core technologies such as the Huawei DriveONE electric drive system.

As of now, Avatr has four models on sale, with monthly sales consistently exceeding 10,000 units for five consecutive months. Among them, the Avatr 06, which was launched in April, exceeded 12,536 orders within 48 hours of its release.

Image Source: Avatr

As Avita's market performance improves and competition in the intelligent vehicle market intensifies, other brands under Changan are gradually adopting Huawei's intelligent vehicle solutions. For example, the mid-to-high-end models under the Deep Blue brand, Deep Blue L07 and SL09, are also equipped with Huawei's intelligent vehicle solutions such as QianKun Intelligent Driving and HarmonyOS Intelligent Cockpit.

Technology diffusion can enhance Chang'an's overall intelligence level on the one hand, and reduce procurement costs through economies of scale on the other, thereby improving competitiveness.

Last year, Avita invested in Huawei's subsidiary component company, Yingwang Auto, forming a deep technical partnership. Through this capital connection, Changan enhanced its influence in the intelligent core component supply chain and ensured a long-term advantage in technology and product supply.

In this light, Huawei is not only a key technology provider in Chang'an's intelligent strategy but also a partner deeply involved in product definition, capital layout, and supply chain construction. This deep and diversified cooperation model provides Chang'an with significant technological and resource support in the new round of intelligent electric vehicle competition.

Summary:

The deep collaboration between Changan Automobile and Huawei actually represents an important path for traditional car manufacturers to address the challenges of intelligence. Through strategic cooperation with technology giants, traditional car manufacturers can quickly make up for shortcomings in intelligent technology and achieve transformation and upgrading. However, the success of this cooperation model requires both parties to achieve deep synergy on multiple levels, including technology integration, brand positioning, and market strategy.

Changan Automobile and Huawei have collaborated to launch Avita, which has gained a certain level of recognition and market share in the high-end smart electric vehicle market. However, in the face of strong competitors like Tesla and Li Auto, Avita needs to continue improving in terms of product strength, brand influence, and channel development.

Zhu Huarong's visit to Ren Zhengfei this time is likely aimed at further deepening the partnership between the two parties in the new stage of development and exploring ways to achieve breakthroughs in the fierce market competition. This meeting may be the starting point for a new round of deep cooperation.