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On August 19, Changan Automobile announced that its brand Avita will invest in Huawei's subsidiary Yinwang. The two parties will establish a joint venture and work together on the development of intelligent driving and other technologies. Previously, Changan Automobile has always been the main participant in cooperation with Huawei. What is the reason for Avita to replace Changan Automobile this time? An unnamed executive of Changan Automobile said: Avita's investment in Yinwang is a strategic choice of Changan Automobile.

It is reported that Avita Technology plans to sign the "Equity Transfer Agreement" with Huawei in Chongqing on the morning of August 20, stipulating that Avita Technology will purchase Huawei's 10% equity in Yinwang for RMB 11.5 billion (hereinafter referred to as the "Transaction"). At the same time, Avita Technology plans to sign the "Shareholder Agreement" with Huawei and Yinwang. After this transaction, Avita Technology will hold 10% of Yinwang's shares, and Huawei will hold 90% of Yinwang's shares.

Auto analyst Ling Ran believes that Avita, as an important support for Changan Automobile to move towards high-end development, has Zhu Huarong, chairman of Changan Automobile, concurrently serving as chairman, and has close cooperation with Huawei, which may represent a promising future. With Avita as a lubricant, both parties may be more efficient in some decisions. In the future, in addition to Avita, Changan Automobile's Deep Blue Automobile, Changan Qiyuan and other brands and product series are likely to reach in-depth cooperation with Huawei.

Changan Automobile pushes Avita forward, and the two sides have a basis for cooperation

There have been new changes in the joint venture jointly established by Changan Automobile and Huawei. Avita has become the "representative" of Changan Automobile to participate in the development and construction of the joint venture.

Why did the "big group" of Changan Automobile withdraw and the "high-end sub-brand" Avita join in?

Shell Finance reporters interviewed several insiders related to Changan Automobile. They all agreed that Avita, as a high-end brand of Changan Automobile, has achieved in-depth cooperation with Huawei since its inception. Although it seems to be a transformation from a large system to a small system, its work efficiency and communication costs may be greatly improved.

On the other hand, Changan Automobile is cultivating Avita, a high-end sub-brand. Zhu Huarong and a group of senior executives are full of hope for the high-end development of Avita. This time, Avita will represent Changan and Huawei to establish a joint venture, which can better demonstrate the brand power of Avita.

Previously, there were rumors that Huawei had planned to acquire a stake in Avita, but it failed to materialize. This joint venture between the two parties can be regarded as a "renewal of the old relationship."

The two new cars currently launched by Avita all use Huawei's intelligent driving system. In the brand introduction, Avita is also a brand jointly created by "Changan, Huawei, and CATL".

In addition to some positive factors, for Changan Automobile, with Avita in the middle, the communication between Changan Automobile and Huawei may be more "soft". Earlier analysis said that Changan Automobile and Huawei, two giants, each have their own styles and thinking, and some friction is inevitable in cooperation. Avita's "centrality" may also become a lubricant for cooperation.

Finally, Changan Automobile did not explicitly say that it would not invest in the joint venture in the future, which also left room for subsequent cooperation. An unnamed Changan Automobile executive told Shell Finance reporters that the cooperation between Avita and Huawei is a strategic choice for Changan Automobile.

Avita fired the first shot, and brands such as Deep Blue may follow closely to deepen cooperation

Besides Avita, which brands might benefit from future collaborations?

Ling Ran believes that DeepBlue, as a Changan Automobile brand focusing on young user groups and targeting the mid-to-high-end market, may be the second Changan independent brand to cooperate deeply with Huawei after Avita. Currently, DeepBlue Automobile has also received all-round resource support from Changan Automobile. Changan Automobile President Wang Jun has also served as the chairman of DeepBlue Automobile, which further shows Changan Automobile's attention to DeepBlue Automobile. Currently, DeepBlue Automobile is one of the fastest growing and largest brands in Changan Automobile's new energy system. The technical cooperation between DeepBlue Automobile and Huawei has also lasted for a year.

On August 16, 2023, DeepBlue Auto signed a cooperation framework agreement with Huawei. According to the cooperation agreement, the two parties will focus on the field of automotive intelligence and jointly promote the research and development and application of new technologies in the field of smart electric vehicles.

As of today, Huawei and DeepBlue Auto have jointly launched the DeepBlue S07 model, with the price of the car reduced to less than 200,000 yuan. Currently, the new car S07, which is powered by Huawei Intelligent Driving, can provide users with two intelligent driving experiences: highway and city driving.

In addition, on November 25, 2023, Deng Chenghao, general manager of Shenlan Automobile, stated that the two parties will focus on the research and development, production, sales and services of intelligent driving systems and incremental components for intelligent connected vehicles.

It is worth mentioning that the public information of Changan Qiyuan's latest product E70 shows that it will adopt the intelligent driving technology independently developed by Changan Automobile. This may also be another part of Changan Automobile's intelligent driving technology layout.

Changan Automobile's move may be to bind Avita to Huawei and increase its brand value. But at the same time, Changan Automobile's products in the mid-to-high-end market also need intelligent driving empowerment, and the binding between Deep Blue Automobile and Huawei may continue to strengthen. Regarding the cooperation between Deep Blue Automobile and Huawei, Deep Blue Automobile General Manager Deng Chenghao and many senior executives have also expressed strong confidence on different occasions. Deep Blue Automobile's next product L07 has also been confirmed to be equipped with Huawei's Qiankun intelligent technology.

In the future, the story between Changan Automobile and Huawei may become even more exciting.

Beijing News Shell Financial Reporter Bai Haotian

Editor: Li Zheng

Proofread by Jianing

Cover photo IC photo