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Interface News Reporter | Yang Shihan

BAIC BluePark, which recently cooperated with Huawei to launch its first smart car, saw its operating income drop by more than 30% year-on-year in the first half of the year, and recorded the largest loss in the same period in history, with a cumulative loss of 25.161 billion yuan in four and a half years.

On August 26, BAIC Blue ValleyDisclosureofSemi-annual reportshow，In the first half of the year, the company achieved operating income of 3.741 billion yuan, a year-on-year decrease of 35.16%. The net profit attributable to shareholders of the listed company was a loss of 2.571 billion yuan.ComparisonSame period last yearFurther expansionThe sales of complete vehicles decreased in this period, and the revenue decreased year-on-year.

When releasing its semi-annual performance forecast, BAIC BluePark attributed its losses to two reasons. First, competition in the new energy vehicle market has become increasingly fierce, and price wars have become increasingly intense, squeezing profit margins. Second, in order to continuously promote the development of its products towards high-end, the company has continued to invest in technology research and development, brand channel construction, and operational efficiency improvement, which has had a certain impact on the company's short-term performance.

BAIC BluePark is controlled by Beijing Automotive Group Co., Ltd., and mainly has two brands, Arcfox and BEIJING. The former is a high-end smart new energy vehicle brand created by BAIC BluePark, and is produced by the joint venture company in China between BAIC BluePark and Magna, a world-renowned parts supplier.

The Arcfox brand, which BAIC Blue Valley had high hopes for, has performed below expectations since its launch and has been slow to expand its sales volume. The production and sales report shows that BAIC Blue Valley sold 11,000 vehicles in July this year and 38,600 vehicles in the first seven months, which is lower than the monthly sales level of the new car-making force Ideal Auto.

Even though the sales of Polar Fox doubled in the first half of the year, it failed to save the overall performance from the decline. With sluggish sales and continued losses, whether BAIC BluePark can get enough profit returns from its cooperation with Huawei has become the key to its turnaround.

On the day when BAIC BluePark's financial report was released, Yu Chengdong, chairman of Huawei's Intelligent Automotive Solutions BU, said at the Hongmeng Intelligent Driving new car launch conference that the first car model jointly launched by Huawei and BAIC BluePark, Xiangjie S9, had sold more than 8,000 units in 20 days after its launch, which was a start that exceeded expectations.

Jiemian News visited Huawei's flagship store on the same day to learn about the sales of the Enjoy S9.It was found that even on weekday afternoons, there was still a steady stream of customers entering the store. According to the staff, the Xiangjie S9 has been very popular since the test drive was launched. Test drives on Saturdays and Sundays must be booked three to four days in advance, otherwise the store will be full. Nearly 10 groups of customers participated in the test drive, each lasting about 1 hour. Because there were many consumers watching movies and trying out the screen in the back row, the network traffic reserved by the store for the exhibition car had been exhausted in advance.

Some users who placed orders compared the Xingjie S9 with competing models from brands such as Mercedes-Benz, BMW, and Audi, and chose the latter because they valued the former's advanced intelligent driving functions. Since the car was launched, the above-mentioned store has received about 20 orders.

BAIC BluePark said in its financial report that in the second half of the year, the company will formulate differentiated city marketing strategies based on market conditions, with sales breakthroughs in core cities driving sales growth in surrounding cities. Jiemian News learned that in order to further stimulate sales, in Beijing and Shanghai, two cities with stricter license plate restrictions, Xiangjie provides Huawei employees with an additional 20,000 yuan in car purchase and optional equipment funds.

BAIC New Energy expects the sales volume of Xiangjie S9 to be 480,000 units in its five-year life cycle. With high expectations, BAIC has repeatedly emphasized that it will give top priority to the strategic height of "All in"(All in)Xiangjie S9, the currently reserved production capacity of BAIC New Energy Xiangjie Super Factory has reached 300,000 vehicles.

This expectation may come from SERES's outstanding performance. Thanks to its in-depth cooperation with Huawei, SERES' revenue in the first half of this year has far exceeded that of the whole of last year, and it has turned losses into profits year-on-year.

Recently, Huawei has been working closely withSERES and Changan, successively announcedThe investment in Huawei's smart car business company has attracted attention, and whether BAIC will also invest in the company in the future has aroused outside attention.According to Xinhua Finance, Zhao Ji, secretary to the board of directors of BAIC BluePark, responded by saying that the company is firmly betting on cooperation with Huawei from a strategic level. The interests of both parties are currently deeply intertwined, and cooperation will be further deepened in the future.