A well-known Chinese company has decided to develop a new business area, Intelligent Automotive Solutions. The main automotive partner Chongqing Changan Automobile and relevant parties will own up to 40% of the new company. The cars themselves are presented in a crossover format, equipped with a hybrid system consisting of a 1.5-litre petrol engine and an electric motor. All in all, all the features in the car are in line with the price segment and the current development of the automotive industry. The main issue for the company is the distribution of shares.
So, many questions began to arise in the company after the development of the new idea of distributing management over the new business unit.
It is likely that Huawei will remain the single largest shareholder with 40% to 50% for at least the next two to three years. Huawei also confirmed that it is in advanced talks to sell part of its new car company to investors, including Chongqing Changan Automobile, but did not comment on the valuation. It added that it wants to move technology and resources into the new company to work with partners to promote innovation in smart car technology and the development of the automotive industry.
A well-known Chinese company has decided to develop a new business area, Intelligent Automotive Solutions. The main automotive partner Chongqing Changan Automobile and relevant parties will own up to 40% of the new company. The cars themselves are presented in a crossover format, equipped with a hybrid system consisting of a 1.5-litre petrol engine and an electric motor. All in all, all the features in the car are in line with the price segment and the current development of the automotive industry. The main issue for the company is the distribution of shares.
Many questions began to arise in the company after the development of the new idea of distributing management over the new business unit.
It is likely that Huawei will remain the single largest shareholder with 40% to 50% for at least the next two to three years. Huawei also confirmed that it is in advanced talks to sell part of its new car company to investors, including Chongqing Changan Automobile, but did not comment on the valuation. It added that it wants to move technology and resources into the new company to work with partners to promote innovation in smart car technology and the development of the automotive industry.
The spin-off is a rare move for Huawei, whose businesses previously included telecoms and consumer electronics. Currently, Huawei is having difficulty developing its smart car business and needs to raise capital to cover research and development (R&D) costs. High hopes that this unit will become a new growth driver have been expressed by senior Huawei executives. The company has invested $3 billion in the unit since its inception, and according to its 2022 annual report, the size of the R&D department has grown to 7,000 people.
Sources :
https://www.reuters.com/business/autos-transportation/huaweis-new-smart-car-firm-valued-up-35-bln-amid-advanced-stake-talks-sources-2023-11-29/
Very interesting article. My conclusion on that business move is that the emphasis on smart car technology and the need for capital underscores their ambition to drive innovation in the automotive industry, leveraging their technological expertise.
Very interesting post, cool that you introduced us to something new that I had no idea about. You have interestingly delved into the topic of Huawei’s new venture, Intelligent Automotive Solutions, and the subject of hybrid crossover car functions. I honestly didn’t expect such a move from Huawei especially into such a difficult field as automotive. Compared to a lot of competition, I’m curious to see how this idea will develop in the future.