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China Fund News reporter Feng Yao

On August 6, Yu Chengdong, Huawei's executive director, chairman of the Terminal BG, and chairman of the Intelligent Automotive Solutions BU, announced at Huawei's new product launch conference that the first model in cooperation with BAIC, the Hongmeng Smart Travel S9, was officially released.

At the press conference, Mercedes-Benz S450L, BMW 730Li, Maybach S480 and other luxury brand flagship models became the benchmarks mentioned by Yu Chengdong. However, Huawei's starting price for the Enjoy S9 is less than 400,000 yuan, which is lower than the previously given pre-sale price of 450,000 yuan to 550,000 yuan.

In the eyes of the industry, the launch of the Xiangjie S9 heralds the first challenge by Hongmeng Zhixing to the luxury sedans that BBA regards as "cash cows". For BAIC, the Xiangjie S9 is seen as a "life-saving straw" to reverse the decline.

Zeng Yuqun appeared at the press conference

The high-tech "surrounding" has become the standard configuration of Hongmeng Zhixing flagship models. Yu Chengdong revealed at the press conference that the biggest highlight of the Enjoy S9 is that it is equipped with Huawei Qiankun ADS 3.0 system for the first time.

It is reported that ADS 3.0 adopts a new architecture and is equipped with an all-directional collision avoidance system CAS 3.0. Its forward active safety scenario is further upgraded, the lateral active safety assists in risk avoidance, and the rear active safety reversing is safer.

In addition, the Xiangjie S9 is also the first to launch road adaptive AEB and eAES automatic emergency avoidance. At the same time, the Xiangjie S9 will also be equipped with Xiaoyi voice intelligent assistant connected to the Pangu model.

It is worth mentioning that the entire range of Enjoy S9 is equipped with 100kWh Huawei 800V whale battery as standard, and the pure electric range under the highest CLTC conditions reaches 816 kilometers.

Zeng Yuqun, chairman of CATL, also appeared at the conference to support the giant whale battery jointly built by Huawei and CATL. Zeng Yuqun revealed that CATL started supplying Huawei in the mobile phone field. And Yu Chengdong also revealed that after the M5 model, all Hongmeng Intelligent Driving models use CATL's power batteries.

It is understood that the 800V giant whale battery equipped in the Enjoy S9 is regarded as the thinnest high-voltage 800V battery in the industry, with a thickness of only 117mm, which is 16.4% thinner than before. This is due to its ultra-high integration and 80% reduction in wiring harnesses.

Regarding the technological configurations of the EnjoyEvolution S9, Yu Chengdong even jokingly said that the EnjoyEvolution S9 "definitely deserves those 'four words'".

Facing the competition from BBA's "cash cow" models

In fact, in the eyes of the industry, the greatest significance of the launch of the Enjoy S9 is that it allows Hongmeng Zhixing to enter the field of luxury cars with a price of more than 400,000 yuan for the first time. This field has always been dominated by BBA (Mercedes-Benz, BMW, and Audi).

On the supply side, there are few new models in the luxury car market, and the market structure rarely changes, so there is a large space for domestic brands to penetrate. "The Xingjie S9 is comparable to the Audi A8L, BMW 7 Series 750Li and Mercedes-Benz S-Class sedan." As early as a month ago when the pre-order was opened, Yu Chengdong described it in a live broadcast.

Data shows that in 2023, the market capacity of 400,000 yuan-class sedans will be around 1.1 million units (sales volume in 2023 will be 1.168 million units, excluding coupes), of which the penetration rate of new energy vehicles will be 16.4%, and the penetration rate of domestic models will be only 8.3%.

Among them, the terminal sales of "56E" (BMW 5 Series, Audi A6, Mercedes-Benz E-Class) in 2022 and 2023 are about 400,000 units, and the competition pattern is relatively stable. The market shares of Audi A6L, Mercedes-Benz E-Class and BMW 5 Series are 15.1%, 12.7% and 11.5% respectively.

In the first half of this year, the average monthly sales of Mercedes-Benz E-Class, BMW 5 Series and Audi A6L were 10,700, 6,600 and 16,900 respectively.

But as Yu Chengdong said before, he did not use "56E" as a benchmark at the press conference. Whether in terms of drag coefficient, riding space and configuration, Yu Chengdong regarded "78S" (i.e. BMW 7 Series, Audi A8L, Mercedes-Benz S-Class) and even Maybach S480 as competitors of Enjoy S9.

As for the price, which is the most concerned aspect of the market, Yu Chengdong announced that the Enjoy S9 will be launched in two versions, with the Enjoy S9 Max priced at 399,800 yuan and the Enjoy S9 Ultra priced at 449,800 yuan.

This price is also far lower than the previously given pre-sale price range of 450,000 yuan to 550,000 yuan.

However, in the industry's view, the next direct competitor of Xiangjie S9 will be BBA's "cash cow" models, and it will also face extremely fierce competition.

Founder Securities believes that the customers of Xiangjie S9 will mainly come from the following four aspects: the first is B/G-end business purchases; the second is the direct conversion from "56E" electric vehicles; the third is the conversion from "56E" fuel vehicles in the affordable price range; and the fourth is the conversion from "78S" fuel vehicles in the upward price range.

BAIC All in Enjoy S9

Naturally, BAIC also has high hopes for the Enjoy S9.

At the press conference, Zhang Jianyong, chairman of BAIC Group, also made a public appearance. Zhang Jianyong said frankly that BAIC has already taken Enjoy S9 as its core strategy and elevated it to the top level. In his words, "BAIC is all in Enjoy S9".

Due to the continued sluggish sales of its Polar Fox brand models, BAIC BluePark's performance has continued to be under pressure.

In the first half of this year, the cumulative sales of BAIC BluePark's BAIC New Energy models were only 28,011 units, a year-on-year decrease of 20.4%, even lower than the new car-making forces that have fallen behind, such as Xiaopeng and Nezha.

Long-term sluggish sales have also caused BAIC Blue Valley to suffer losses year after year. BAIC Blue Valley recently released its first-half performance forecast, showing that it expects a net loss of 2.4 billion to 2.7 billion yuan in the first half of the year, with a year-on-year increase in losses.

BAIC BluePark said that the expected loss was due on the one hand to the increasingly fierce competition in the new energy vehicle market, the increasingly fierce price war, and the squeezing of profit margins; on the other hand, the company continued to invest in technology research and development, brand channel construction, brand image sharpening, and operational efficiency improvement in order to continuously promote the development of its products towards high-end, which had a certain impact on the company's short-term performance.

As of the first quarter of this year, BAIC Blue Valley's asset-liability ratio reached 79.87%. Short-term loans and notes payable and accounts payable alone amounted to 5.523 billion yuan and 7.165 billion yuan, respectively, while BAIC Blue Valley's cash and cash equivalents during the same period were only 4.768 billion yuan.

In the industry’s view, BAIC BluePark can only hope to rely on the Xiangjie brand to replicate Seres’ comeback against the trend.

Editor: Xiaomo

Audit: Wooden Fish

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