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1、Insights on Huawei Auto(2024)Yiche Research InstituteHow Huawei Can Better Take on BBAAuthorsDirector/Chief AIndustry AIndustry ALijun ZhouYing GaoBenya ShiVisual DQiang ZhangSo far in 2024,BBA have been mired in a price war and sales funkwhile AITO has upped the ante and the Huawei“Foursome”hasacce

2、lerated expansion into the high-end car market,further putting pressure on BBAThe three years of the pandemic(2020-2022)completely disrupted the China strategies of BBA(Mercedes,BMW&Audi),as their product refresh efforts have been way behind the evolution of the Chinese car market where buyers are b

3、ecoming more middle-aged,female,single and older.From 2023 to the first half of 2024,BBA mechanically tried to push forward electrification and smartification but to no avail,as the three core groups of products 34C(3 Series,A4L&C-Class),35C(X3,Q5L&GLC and 56E(5 Series,A6L&E-Class)were mired in a pr

4、ice war with mediocre sales,resulting in departure of dealers.This condition is only going to get more worse in the second half of 2024;In sharp contrast,competitors in the Chinese brand camp like Li Auto,Denza,AITO,Xiaomi and BYD launched a slew of new products that were more energy-saving,more hig

5、h-end,more stylish and more distinctive during the same period better catered to new Chinese consumer preferences.As a result,their sales in the high-end car market grew significantly.Huawei was certainly one of the best performing during this stretch with the rise of AITO starting in October 2023 a

6、nd the M7 and M9 together pushing monthly sales of the AITO brand past 30,000 units to even around 40,000 units in the first half of 2024.AITO was able to gain significant share in the high-end car market in a matter of only 6 months,inspiring Huaweis other three brands LUXEED,Stelato and Maextro to

7、 continue to push into the high-end car market,severely challenging BBAs dominant position;In the second half of 2024,even if BBA can accurately optimize their China strategies,it wont be until 2026-2027 when their next round of new products really materialize.Following the AITO M5/M7/M9,LUXEED S7 a

8、nd Stelato S9,from Q4 2024 to 2025,Huawei will launch additional high-end products like the AITO M8,LUXEED R7,Maextro MPV and car to further dent BBAs dominant position.Terminology:Huawei Auto denotes a series of EV brands led by Huawei and deeply integrating Huaweitechnology and R&D,as of August 20

9、24,these included AITO in collaboration with SERES,LUXEED incollaboration with Chery,Stelato in collaboration with BAIC and Maextro in collaboration with JAC,known as the”Huawei Foursome”Huawei Auto ProductPortfolio(as of August 2024)ICE/Energy-SavingVehicleModularPlatformRMB300KRMB200KEVModular Pla

10、tformRMB400KRMB500KRMB300KRMB200KRMB100KRMB500KCarSUVMPVAITO M946.98-54.98AITO M524.98-27.98AITO M5 EVEV 26.98AITO M724.98-32.98AITO M9 EV50.98-56.98LUXEED R7Stelato S939.98-44.98LUXEED S724.98-34.98Maextro MPVMaextro CarAITO M8Sales of BMW,Mercedes,Audi and Huawei AutoJanuary 2022-June 2024(10,000

11、units)Huawei FoursomeBMWMercedesAudi0123456789101112202201202202202203202204202205202206202207202208202209202210202211202212202301202302202303202304202305202306202307202308202309202310202311202312202401202402202403202404202405202406The three years of the pandemic basically further exposed problems w

12、ith BBA,problems that have existed all along,especially in terms of their core product lineup:over the past 7-8 years,BBA have consistently depended on the three core groups of family car models 34C,35C and 56E to drive volume in the Chinese market,but the past few years have seen the emergence of n

13、ew consumer preferences for bigger family,personal mobility enabling and sports vehicles,which not only meant that BBAs core product lineup missed the market beat but also exacerbated internal friction of BBA.Whereas before it was 1+1+13 for BBAs three core product groups,it is now 1+1+1RMB500KRMB10

14、0KRMB300KRMB200KRMB500KICE/Energy-SavingVehicleModularPlatformEVModular PlatformBMW X5Mercedes GLEBMW X3MercedesGLCAudi Q5Audi Q7Audi Q3BMW X1Audi A3BMW 3 SeriesMercedesC-ClassAudi A4LAudi A6LBMW 5 SeriesMercedesE-ClassMercedesS-Class BMW 7 Series Audi A8MercedesGLAMercedesB-ClassMercedes CLABMW 1Se

15、riesRMB300KRMB200KRMB400KRMB500KRMB100KRMB300KRMB200KRMB500KICE/Energy-SavingVehicleModularPlatformEVModular PlatformCarSUVMPVAITO M9AITO M5AITO M5 EVAITO M7AITO M9 EVLUXEED R7Stelato S9LUXEED S7Maextro MPVBMW X3Mercedes GLCAudi Q5LAudi Q3BMW X1MercedesGLBAudi A3MercedesA-ClassMercedes C-Class BMW 3

16、SeriesAudi A4LAudi A6LBMW 5SeriesMercedesE-ClassMercedesS-ClassBMW 7SeriesAudi A8MercedesGLEAudi Q7BMW X5BMW i3BMW i5MercedesEQEBMW iX1BMW iX3Mercedes EQE SUVMercede EQAMercedes EQBAudi Q4 e-tronAudi Q5e-tronMercedes VitoMaextro CarAITO M8To better explore how Huawei can better capitalize onBBAs pro

17、duct deficiencies,this report combinesHuaweis vision to take on the high-end car market witha family wealth perspective through the wealthy,middle-class and blue collar car marketsAs of August 2024,the“Huawei Foursome”of AITO,LUXEED,Stelato and Maextro were all positioned to address the high-end car

18、 market.Over the past 100+years in the global auto market though,no carmaker had been successful doing this.We dont doubt Huaweis courage and ambition,but we also try to be cautiously optimistic of this strategy.Some may think that the Huawei model is different from carmaker groups based on centrali

19、sm and is more like a federalism with high autonomy,working with the carmaker partners as things progress.There are various debates as to how the“Huawei Foursome”model will evolve and whether Huawei is making cars or not.For the sake of this report and simplicity of analysis,we are going to assume H

20、uawei wants to make cars and that the“Huawei Foursome”model is only a transition.Based on this,our discussion of“Huawei Foursome”and their battle for the high-end car market will be centered on the high-end car market rather than the high-end brand,through a family wealth perspective based on the we

21、althy,middle-class and blue collar car markets referencing BBA,to help explore new opportunities and paths for Huawei Autos go high-end efforts;The research data presented in this report is primarily based on YRI online research with a sample size of more than 60,000 in 2023,as well as on Yiche Big

22、Data and YRI offline research with a sample size of more than 10,000 in 2023;YRIs insights series on specific segments of car buyers are only based on data from new car sales.Please treat our findings with a grain of salt:the drop in young buyers in the new car market,for example,does not necessaril

23、y mean overall young buyers are shrinking since more and more of them are flocking to the used car market.Vehicle Segment by Social StatusMiddle-ClassMarketWealthyMarketBlue CollarMarket15500Annual HouseholdDisposable Income(RMB10,000)BBA still had a dominant position in Chinas wealthy carmarket in

24、2023,but lacked products that catered to preferencesfrom more high-knowledge and female buyers,while Huaweineeds to solidify its innovative label and offer more modelsdedicated to female buyersOver the past 20 years or so,as the popularization of higher education accelerated in China,the majority of

25、 the countrys wealthy car buyers quickly elevated from the newly rich with low education levels to high knowledge buyers.In 2007,the share of wealthy car buyers with junior college degrees or higher topped 40%.That percentage surpassed 50%in 2014 and 90%in 2023 with graduates(masters)alone accountin

26、g for 25%.These high knowledge users worked primarily in the internet and IT industries rather than traditional industries like manufacturing and real estate:in 2023 more than 18%of the wealthy car buyers worked in the internet and IT industries,the most among buyers.Because Huawei itself is at the

27、forefront of the innovative IT industry and a model among innovative Chinese tech companies,Huawei models like the AITO M7 and M9 attracted more buyers as Chinese car buyers became more high knowledge;The other phenomenon in Chinas wealthy car market is there are increasingly more female buyers,the

28、share of which rose from 11.27%in 2007 to 48.08%in 2023,becoming a new primary buying group in Chinas wealthy car market and contributing to over half of BBA sales.Female buyers even accounted for more than 20%of sales of the relatively macho AITO M9 in the first half of 2024,reflecting their market

29、 influence.But as of August 2024,Huaweis overall product vibe was still centered on male chauvinism and Richard Yu lacked significant care toward female buyers compared to Xiaomis Lei Jun.In Q3 2024,the streamlined and sporty Stelato S9 should proactively cater to female buyer needs,but initially Hu

30、awei positioned the model to compete with executive sedans like the S-Class Maybach and 7 Series,emphasizing its appeal to busy male executives looking for comfort.Luckily,Huawei soon brought in actress Yang Mi as a product ambassador to appeal to female buyers as a tactic to address the initial tep

31、id market reception;In 2023,end-user sales in Chinas wealthy car market reached nearly 900,000 units with a market share of over 4%as new emerging brands Li Auto and Tesla moved into the top 5 in terms of market share.But BBA remained the dominant players with Mercedes leading the way with a market

32、share of 22.65%From 2024 to 2030,we expect Chinas wealthy car market to continue to expand further to a market share of more than 9%.If Huawei does not address its lack of products dedicated to female buyers,it might not be able to disrupt BBAs dominant position;Although the wealthy car market as a

33、strategic high ground of Chinas car market does not have significant volume,it does have significant value,especially brand value.Huaweis battle with BBA is not simply a battle of sales but rather a battle for say and brand value.The latter is not about having multiple models or brands,but rather re

34、fined branding.For Huawei,its not about launching multiple brands like AITO,Stelato and Maextro,its about whether it can lead the way in terms of new consumption trends in Chinas wealthy car market and whether it can really strategically deter BBA.Source:YRIWealthy car market denotes segment compose

35、d of buyers withannual household disposable income of RMB500K0%10%20%30%Share of Wealthy CarBuyers in Chinas PV Market 2014-2030Share of Wealthy CarBuyers by EducationLevel 2007-2023Share of WealthyCar Buyers byGender 2007-2023Top 10 Industries Representedby Wealthy Car Buyers 2023Top 20 Mainstream

36、Brands inWealthy Car Market Share 20230%2%4%6%8%10%2014201820222026E2030E0%10%20%30%40%50%60%70%80%90%100%200720142023Middle School&BelowJunior CollegeUndergraduateHigh School/PolytechnicMaleFemaleGraduate0%10%20%Internet,ITManufacturingConstructionReal EstateGovt Offices&InstitutionsWholesale&Retai

37、lFinanceTransportationLogisticsEnergyMedical&HealthCulture,Sports&Entertainment0%10%20%30%40%50%60%70%80%90%100%200720142023MercedesBMWLi AutoAudiTeslaToyotaDenzaNIOPorscheLand RoverHondaHongqiVWTANKBYDLexusCadillacXpengZEEKRBuickThe middle-class car market will become the largest carmarket in China

38、 and buyers in this market very much desirehigh-end vehicles,its also the biggest market for BBA and acore battleground for Huawei to take on BBAOnce Huawei creates a strategic deterrence to BBA in the wealthy car market,the middle-class car market will likely see the biggest fruition of that deterr

39、ence.Less than 900,000 vehicles were sold in Chinas wealthy car market in 2023,but nearly 9 million were sold in the middle-class car market,which accounted for 41.03%of Chinas total car sales.The middle-class car market is also the biggest market for BBA:in 2023 middle-class car buyers accounted fo

40、r 67.94%,58.64%and 57.61%of Audi,BMW and Mercedes sales in China.By 2030,we expect the share of the middle-class car market to exceed 50%and possibly reach 60%,making it the biggest market segment in Chinas passenger vehicle market.If BBA can effectively address new preferences from middle-class car

41、 buyers,they can certainly rebound and get back into the groove;The quality of middle-class car buyers in China is very good,in 2023 33.04%of middle-class car buyers bought high-end brands,that share is even higher for those with purchase intent,at 43.93%.This characteristic is conducive to Huawei f

42、urther expanding market coverage and BBA transformation and upgrading.BBA ranked from No.4 to 7 in terms of market share in the middle-class car market in 2023,and every step of improvement would mean an increase of sales of several tens of thousands of vehicles;From 2025 to 2026,the“Huawei Foursome

43、”should not blindly take the lead in trying to price their vehicles the highest,but must focus their resources on the middle-class car market dominated by models priced in the RMB200K-400K range.The middle-class car market is dominated by family buyers who strongly desire road trips and all forms of

44、 powertrain in addition to BEVs and EREVs.Huawei should diversify powertrain choices of their products and upgrade energy-saving technologies as fast as they can and proactively prevent BBA from capitalizing on large PHEVs.Source:YRIMiddle-class car market denotes segment composed of buyerswith annu

45、al household disposable income of RMB150K-RMB500KShare of Middle-ClassBuyers in ChinasPV Market 2014-2030Middle-Class Car Market byProduct Class Purchased vs.Purchase Intent 2023Top 20 Mainstream Brandsin Middle-Class Car BuyerPenetration 2023Top 20 Mainstream Brandsin Middle-Class CarMarket Share 2

46、023PurchasedPurchase Intent0%10%20%30%40%50%60%70%2014201620182020202220242026E2030E0%10%20%30%40%50%60%0%25%50%75%100%0%3%6%9%12%ZEEKRVOYAHTeslaNIOLi AutoVolvoAudiLexusXpengCadillacDenzasmartAITOBMWIMWEYMercedesLYNK&COTANKLincolnBYDVWToyotaAudiHondaBMWMercedesTeslaGeelyLi AutoNissanChanganBuickHong

47、qiWulingHavalGAC TrumpchiNIOLexusVolvoHigh-EndVolumeEntryHuaweis strategic high-end pivot is obviously hinged onboomers like Richard Yu,but should not ignore blue collaryoung men and women who earn less,this is Huaweis“closedloop project”to challenge BBAThe wealthy car market decides BBAs brand valu

48、e,the middle-class car market decides BBAs market scale,while the blue collar car market especially the young blue collar car market decides BBAs future;Chinas blue collar car market has shrunk over recent years,to a market share of just 54.87%in 2023,because youth population has fallen and blue col

49、lar users flocked to the used car market.From 2024 to 2030,we expect the blue collar car market to further contract to possibly below 30%.Though the blue collar car market has been shrinking,it remains to be a key segment of Chinas car market.BBA have always viewed young blue collar consumers as pot

50、ential customers and have tried to address that opportunity with entry-level models.Over the past 3-4 years,BBA have launched massive discounts on their vehicles and the transaction price of many of their entry level products as a result has fallen to within RMB200K or even RMB150K,attracting more y

51、oung blue collar car buyers.That resulted in BBA all cracking into the list of top 20 mainstream brands in blue collar car market share in 2023.In the next few years,if BBA can effectively optimize their strategy and timely launch a large energy-saving vehicle offensive,these young blue collar buyer

52、s that they have attracted could stay with BBA as they upgrade their vehicles;It was pretty evident that more singles and female buyers flocked to the youth car market in 2023.But as of August 2024,overall retail prices of Huaweis AITO,LUXEED and Stelato were all above RMB250K,which will be unlikely

53、 to attract these new young buyers.If over the next few years Huaweis product portfolio remains centered on high-end vehicles and ignores the young blue collar opportunity,its go young strategy could hit some speed bumps.Theoretically Huawei has strong appeal to young people and Huaweis manufacturin

54、g partners such as Chery,BAIC,JAC and SERES,especially Chery,all traditionally targeted blue collar buyers.Source:YRIBlue collar car market denotes segment composed of buyers withannual household disposable income of RMB500KRMB100KRMB300KRMB200KRMB500KICE/Energy-SavingVehicleModularPlatformEVModular

55、 PlatformWe suggest Huawei optimize its brand coverage as follows:AITO tofocus on the middle-class car market,LUXEED the blue collar(youth)car market,Maextro the wealthy car market and Stelato the femalecar marketUnder the same Huawei umbrella,theres the LUXEED S7 and Stelato S9,both of which are BE

56、Vs and have streamlined/sporty designs,partially reflecting the fact that product positioning and target users of the“Huawei Foursome”are not that clearly defined and differentiated.Based on the principle of“the middle-class car market as the main battleground,the wealthy car market as the value hig

57、h ground and the blue collar car market as the auxiliary battleground,”we can immediately define which markets each of the“Huawei Foursome”should specifically address;As of August 2024,BBAs midsize and mid to large size vehicles mainly address the middle-class car market,large and performance produc

58、ts mainly address the wealthy car market,while compact and smaller products mainly address the blue collar(youth)car market.This product portfolio coverage is pretty broad and clearly defined,but the main issue for BBA is that they are bogged down by a lack of timely introduction of new models becau

59、se of lack of local R&D capabilities,which means the window of opportunity for Huawei will only last for 2-3 years.Given its current market performance and short-term future product planning,AITO should focus more on the middle-class car market and also partially address the wealthy car market.In ad

60、dition to launching SUV products like the M8 and M6,it should also consider MPVs in the same class as the M7,M8 and M9 and proactively expand new product offerings to challenge BBAs 34C and 56E.The difficulty for AITO lies in the upgrading of energy-saving technologies:middle-class car buyers are do

61、minated by family users,and more and more of them desire large energy-saving vehicles including PHEVs and HEVs;LUXEED should focus more on the blue collar(youth)car market and partially address single middle-class car buyers.Its products should maintain streamlined&sporty styling like the S7 and R7

62、and go down market to cater to more singles and female buyers,thereby attracting potential young buyers of entry-level high-end car models like the Audi A3,Q3,Mercedes A-Class and BMW X1;since the Maextro has hinted that it will price its cars in the RMB1 million range and take on ultra luxury produ

63、cts like Maybach and Rolls Royce,then it has to seriously focus on the wealthy car market and create flagship products for Huawei Auto to dilute BBA branding;for Stelato,its a bit awkward as its first model S9 is an executive limousine that kind of competes with Maextro and its streamlined&sporty st

64、yling potentially competes with LUXEED.Though Huawei has lofty aspiration to go high-end,that aspiration misses an important segment of the market:female buyers.Theoretically Stelato S9 can extend its appeal to female buyers,and partner BAIC has resources such as the Koala to address the female oppo

65、rtunity,its better for Stelato to instead focus its full attention to the female car market and tackle female car buyers in blue collar,middle-class and wealthy car markets,so it can capitalize on BBAs weakness in that area.Take a step back and there will be a bigger world in front of you:the era of

66、 middle-class car buyers dominating the car market is coming and female buyers will soon account for half of Chinas car market;CarSUVBlue CollarMiddle-ClassWealthyMPVCarSUVMPVCarSUVMPVAITO M946.98-54.98AITO M524.98-27.98AITO M5 EV26.98AITO M724.98-32.98AITO M9 EV50.98-56.98LUXEED R7Stelato S939.98-4

67、4.98LUXEED S724.98-34.98MaextroMPVMain Direct Battlewith BBAAITO takes lead withsupport fromStelato and LUXEEDLUXEED takes leadwith support from StelatoAuxiliaryPoach PotentialBBA CustomersValue High GroundDilute BBA BrandingMaextro takes leadwith support fromAITO and StelatoMaextro CarAITO M8RMB300

68、KRMB200KRMB400KRMB500KRMB100KRMB300KRMB200KRMB500KICE/Energy-SavingVehicleModularPlatformEVModular PlatformPhotos from Yiche vehicle database as of August 2024,models that have stopped production are depicted using their next generation versionsReshuffling of Huawei Autos Current ProductPortfolio vi

69、a a User(Social Status)PerspectiveSuggested Huawei AutoPortfolio Optimization(Simplified)Huawei Auto ProductPortfolio(as of August 2024)AITOLUXEEDStelatoMaextroHigh-EndCar MarketBBABlueCollarMiddle-ClassWealthyMaextroAITOLUXEEDStelatoBBAMaleFemaleProduct optimization comes next:AITO should focus on

70、mainstreamquality and grand&high-end,Maextro noble&luxury and off-road&macho,LUXEED streamlined&sporty and off-road&macho,andStelato refined&stylish and streamlined&sportyWith market and brand coverage adjustments out of the way,product optimization comes next:in 2023,the share of grand&high-end,off

71、-road&macho,noble&luxury and Avant Garde products desired by buyers in the wealthy car market all rose significantly,especially noble&luxury and off-road&macho products.We suggest Maextro focus its efforts to offer the two latter type of products and test waters in Avant Garde products.With the M9 a

72、s a basis,AITO should also test waters in the wealthy car market and try to capitalize on the grand&high-end opportunity;grand&high-end and main-stream quality products accounted for the highest market shares in the middle-class car market in 2023 and catered more toward family men.We therefore sugg

73、est AITO to focus efforts on these segments.Streamlined&sporty and refined&stylish followed in terms of market share catered more toward female buyers and mobility enabling needs,we suggest Stelato to focus efforts on these types of vehicles.Off-road&macho products were the fastest growing in the mi

74、ddle-class car market,and Stelato can address this opportunity when the time is right;in the blue collar car market,economy bland products remained the most desired among buyers in 2023,but growth has fallen significantly.Young blue collar male buyers mainly desire mainstream quality,streamlined&spo

75、rty and off-road&macho products,and because mainstream quality products have completely different characteristics than the other two categories and LUXEED primarily offer distinctive streamlined&sporty models,we suggest LUXEED focus efforts on primarily offering distinctive streamlined&sporty produc

76、ts and launch off-road&macho products when the time is right.Refined&stylish and small&cute models in the blue collar car market are primarily purchased by young female blue collar buyers,Stelato can therefore proactively address these segments;As of August 2024,the three major product groups of 34C

77、,35C and 56E from BBA are pre-dominantly mainstream quality and grand&high-end products with relatively traditional styling.Besides brand,these products lack competitiveness in the high-end car market which is now all about trade-ins,energy-saving vehicles and big families,characteristics unique to

78、China.In other fast growing product segments such as off-road&macho,streamlined&sporty and refined&stylish,BBA lack relevant product offerings;When it comes to product coverage,BBA is almost welcoming Huawei Auto with open arms,that might make Richard Yu a bit uncomfortable.Product Preferencein Weal

79、thy CarMarket in 2023Purchased vs.Purchase IntentProduct Preferencein Middle-Class CarMarket in 2023Purchased vs.Purchase IntentProduct Preferencein Blue Collar CarMarket in 2023Purchased vs.Purchase IntentSource:Yiche Big DataPhotos from Yiche vehicle database as of August 2024,models that have sto

80、pped production are depicted using their next generation versions0%20%40%Grand&High-EndMainstream QualityStreamlined&SportyOff-Road&MachoNoble&LuxuryEconomy BlandAvant GardeRefined&StylishPremium BusinessSmall&CuteTech&SimpleSturdy&Commercial Classic&Retro0%20%40%Grand&High-EndMainstream QualityStre

81、amlined&SportyRefined&StylishOff-Road&MachoEconomy BlandSmall&CuteNoble&LuxuryPremium BusinessAvant GardeTech&SimpleSturdy&Commercial Classic&RetroEconomy BlandMainstream QualityStreamlined&SportyRefined&StylishGrand&High-EndOff-Road&MachoSturdy&Commercial Small&CuteNoble&LuxuryPremium BusinessAvant

82、 GardeTech&SimpleClassic&Retro0%20%40%Reshuffling of Huawei Autos Current ProductPortfolio via a User(Social Status)PerspectiveLUXEED S7LUXEED R7Stelato S9Maextro MPVAITO M9AITO M5AITO M7CarSUVMPVCarSUVMPVCarSUVMPVLUXEED FocusStelato FocusAITO FocusMaextro FocusMaextro CarAITO M8Grand&High-EndMainst

83、reamQualityStreamlined&SportyRefined&StylishOff-Road&MachoEconomyBlandSmall&CuteNoble&LuxuryAvant GardeSturdy&CommercialClassic&RetroPremiumBusinessBlue CollarMiddle-ClassWealthyPurchasedPurchase IntentPurchasedPurchase IntentPurchasedPurchase IntentThe next two years will be crucial for Huawei to c

84、hallenge BBAsdominant position in Chinas high-end car market and also a goldenperiod for its own growth hinged on the“Huawei Foursome”Over the past 7-8 years,the core ICEV models of BBA have not been updated significantly and NEVs have flopped,this product weakness has given Huawei a huge opportunit

85、y to take advantage of BBA.Entering 2024,BBA has been mired in a price war and sales funk,while AITO has quickly emerged to become a force and the“Huawei Foursome”has accelerated expansion into the high-end car market,fully taking on BBA;In the wealthy car market,BBA remained as the dominant force i

86、n 2023,but their products have lagged behind in terms of addressing new trends such as buyers are becoming more high knowledge and more female.Although Huawei clearly has the advantage when it comes to the innovative label,it also has a big gap when it comes to addressing the female opportunity.The

87、middle-class car market is about to become the largest car market in China and buyers have strong desire to go high-end,it therefore is the meat of the BBA market and a core market for Huawei to challenge BBA.Though the blue collar car market has been contracting,volume remains significant enough th

88、at Huawei should test the waters in the young blue collar car market to complete that“closed loop project”taking on BBA.The value of high-end brands is decided in the wealthy car market,the market scale of high-end brands is decided in the middle-class car market and the future of high-end brands is

89、 decided in the blue collar car market,especially the young blue collar car market;As Huawei puts in all efforts to challenge BBA with its high-end strategy,it must first optimize is market coverage:treating the middle-class car market as the main battleground,the blue collar car market as the auxil

90、iary battleground and the wealthy car market as a value high ground.Then it must optimize its brand coverage,with AITO focused on the middle-class car market,LUXEED the blue collar(young)car market,Maextro the wealthy car market,and Stelato the female car market.Finally,it must optimize its product

91、lineup:AITO should primarily offer mainstream quality and grand&high-end products,Maextro noble&luxury and off-road&macho,LUXEED streamlined&sporty&off-road&macho,and Stelato refined&stylish and streamlined&sporty;A clear market,brand and product road map will result in a clearer development path fo

92、r Huawei Auto.Huawei Auto Sales 2016-2024(10,000 units)010203040506070809020162018202020222024E2026E2028E2030ESuggested StrategicOptimization for Huawei AutoHuawei AutoStrategic EvolutionHuawei Autos CurrentStrategic DirectionAITOLUXEEDStelatoMaextroFamilySportsHigh-EndCar MarketBBABusinessStylishHu

93、aweiAutoBlueCollarMarketMiddle-ClassMarketWealthyMarketMaleFemaleMaextroAITOLUXEEDStelatoBBAHuawei FoursomeBMWMercedesAudiA slew of domestic brands like Li Auto,BYD,Xiaomi in addition toHuawei are aggressively addressing the high-end opportunity andchallenging BBA in 2024Over the past 3-4 years,beca

94、use BBA have been slow in launching newer updated products and their NEVs have not done well in China,while Chinas high-end car market has grown significantly,a slew of Chinese domestic carmakers like Li Auto,BYD and Xiaomi in addition to Huawei has capitalized on this development.Li Auto has done b

95、etter than Huawei as sales rose to 380,000 units in 2023 and are expected to top 500,000 units in 2024.BYD has been able to quickly establish a relatively complete high-end system as Yang Wang has focused on the wealthy car market and taken the value high ground,Denza and Fang Cheng Bao have taken o

96、n the middle-class car market while the Dynasty and Ocean networks have dominated the blue collar car markets.In the second half of 2024,BYD will launch many mid to large multi-purpose energy-saving products to address the middle-class car market.In early 2024,Xiaomi took the market by storm by pric

97、ing the SU7 in the low RMB200K range and thanks to the star power of CEO Lei Jun,sales have taken off;In terms of share of origin for those that have purchased cars in wealthy car,middle-class and blue collar car markets,desire for Chinese brands was strong in all three markets.From 2024 to 2026,mar

98、ket conditions for many Chinese domestic carmakers like Huawei,Li Auto,BYD,Xiaomi,NIO,ZEEKR and Hongqi that want to address the high-end car market will become more favorable.From 2026 to 2027,whether BBA have any chances of a rebound depends on how well these Chinese domestic carmakers like Huawei

99、do.RMB300KRMB200KRMB400KRMB500KRMB100KRMB300KRMB200KRMB500KICE/Energy-SavingVehicleModularPlatformEVModular PlatformCarSUVMPVAITO M9AITO M5AITO M5 EVAITO M7AITO M9 EVLUXEED R7Stelato S9LUXEED S7Maextro MPVXiaomi SU7ZEEKR 007ZEEKR 001NIO ET5 SeriesModel 3Model YNIO ES6Li L6Li L7Li L8Li L9Li MEGADenza

100、 D9Denza N9BYD Tang MAXBYD Tang LDenza Z9 GTXpeng G9ZEEKR 009BMW X5Huawei S Seriesunder siegeModel Y all alone at thetop Xiaomi SU8 on deckBuick Centry,Denza D9early mover advantageXiaomi SU8Huawei M Seriesdangers lurkingBuick CentrySienna/GranviaMaextro CarAITO M8Source:Yiche Big DataPhotos from Yi

101、che vehicle database as of August 2024，models that have stopped production are depicted using their next generation versionsShare of Wealthy CarMarket by BrandOrigin Purchased vs.Purchase Intent 2023Share of Middle-ClassCar Market by BrandOrigin Purchased vs.Purchase Intent 2023Share of Blue CollarC

102、ar Market by BrandOrigin Purchased vs.Purchase Intent 2023Huawei Auto Product Portfolio&Competitive Landscape(as of August 2024)PurchasedPurchase IntentPurchasedPurchase IntentPurchasedPurchase Intent0%10%20%30%40%70%60%50%ChinaGermanyJapanUSAOthersChinaGermanyJapanUSAOthersChinaGermanyJapanUSAOther

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105、rmitted.Copyright DisclaimerCurrently YRI does not publish reports for commercial purposes,we mainly helpempower customers like OEMs and dealers;YRI prides itself on its rich data and the ability to speak the facts based on these data;Everyone has different views,therefore we welcome comments and fe

106、edback onour own views.Lets agree to disagree.YRI positioning:non-commercial digital car market think tankYRI mission:help Yiche customers better understand Chinascar marketCommunications(Media,etc.)Extract（Survey/Consulting/Association/Investment Banking）Target Audience（OEM/Dealer/Investment）Traffi

107、c,Leads,Conversion,TransactionAd,Membership,Collection,ActivityReceive Basic InformationGain Core PerspectivesReport,Advisory,Suggestion,Diagnostics,SystemInfo,etc.ServiceFeeGain Trust&CustomersShare Knowledge&OpportunitiesShareKnowledge&OpportunitiesGain Trust&CustomersGain Trust&CustomersShareKnow

108、ledge&OpportunitiesNew Species(non-commercial digital think tank)Pro:WideAudienceCon:Limitedin DepthNature:TrafficConversionEffect:BoostSalesPro:Complementary;Con:Cooperation LimitedNature:Communication of Views;Effect:Elevate InfluenceThe media&thepressarestrengtheningdataanalysisandindustry author

109、ity,as well as elevatingcooperation withOEMs.Caseinpoint:Yicheforming YRI.Entities likeconsulting firmsarestrengtheningdata miningcapabilities andindustryauthority,andimprovingindustrycredibility andcustomerinfluence,likethe McKinseyQuarterlyValue：Guidancefor the massmedia:realize long-term interact

110、ion;Cooperationforcommercial extraction:facilitate long-termcollaboration;Trust for customers:build long-termcooperationTraits:CommunicationsConsciousness,ExtractionCapability,Audience BaseAuto Industry Dialogue Tour Insights Clear as Blazing FireCore Topic:Analyzing Chinese Car Buyer Characteristic

111、s&TrendsTime:May-July 2024Target:primarily Yiche customers including OEMs,one on one discussionSignup at WeChat:yicheresearch please provide name,position,company and cell phone#)-a New Book from Yiche Research Institutes Industry Analysis Series gives a deeper look atChinese car buyer characteristi

112、cs and consumption potential centered on the customer journey from purchase to use,covering key metrics such as traffic,net promoter score,use case,mileage used,family vehicle ownership data and parking to help carmakers refine their strategies timely so that they can better put into practice their”

113、customer is at the center of everything we do”corporate philosophy.How to get your book:OEMs,dealers and Yiche customers should contact their Yiche service personnel:Non-Yiche customers please contact YRI directly(WeChat:yicheresearch)From May to July 2024,YRI will kick off its 8 round of“Insights C

114、lear as Blazing Fire”Auto Industry Trends&Analysis Dialogue Tour,covering the core topic of“analyzingChinese car buyer characteristics and trends”to help carmakers capitalize newopportunities presented by these new trends.thDemystifying Chinas Auto MarketDemystifying Chinas Auto Market(2024 Edition,Part I)Contact UsFollow UsWeChatJuns Market TalkBenya Shi，Industry AnalystMobile：188 0118 7009Mail：WeChat：yicheresearch