In addition to Borgward, what other options does Xiaomi have?
Editor’s note: This article is from the micro-channel public number “trip wire” (ID: lianxianchuxing), Author: Li Xin, editor: midnight.
Will Xiaomi choose Baowo for making cars?
Recently, according to a report from Yuguan Auto Market, Xiaomi had in-depth negotiations with Borgward Automotive on car building. However, due to the huge disparity between the two parties’ valuation of Borgward Automotive, the negotiations have come to an abrupt end.
According to a relevant person familiar with the matter: “Lei Jun wants to take advantage of Lu Zhengyao’s capital difficulties to take Borgward into his bag, but the bid is too low. If Lu Zhengyao agrees, he will lose money on the Borgward car project.”
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Previously, Lu Zhengyao spent 4.1 billion RMB to acquire Borgward Auto. He wanted to build his own car empire. However, as Ruixing Coffee exploded, it also affected Borgward Auto. Connected Travel once explained in detail in the article “Sales plummeted, Baowo was finally dragged down by Lu Zhengyao”.
So far, Borgward Auto is still in a state of suspension, but the foundation of Borgward Auto is still there. Its car factory, vehicle manufacturing capacity, dual production qualifications for traditional energy and new energy vehicles are all tempting for Xiaomi force.
Baowo Automobile’s Miyun Factory, picture source Baowo Automobile’s official account
If Xiaomi successfully acquires Borgward Auto, it will immediately have a plant with an annual output of 360,000 vehicles.
However, Borgward Auto is not the only choice for Xiaomi. At present, many small and medium-sized car companies in China are facing the dilemma of bankruptcy and reorganization, waiting for someone to lend a helping hand.
And Xiaomi has always been exposed to negotiations with different car companies. Prior to this, Xiaomi had cooperated with BYD, Great Wall Motors, Zotye Automobile, etc., but they were all denied.
Nowadays, as Xiaomi officially announced the production of cars, it is imperative to find partners from all parties.
According to the online travel combing, although Xiaomi has already deployed the upstream and downstream of the car, it has not accumulated too much in the core technology, which means that Xiaomi’s car manufacturing is almost “from scratch”.
Lei Jun once said that Xiaomi cars will be launched within three years at the earliest, but under the background that there is not much core technology accumulation at the moment, Xiaomi needs to speed up the production of cars, and finally decides whether to take the route of OEM or acquisition of qualifications and self-built factories. , Maybe it will be confirmed in the near future.
Baowo, is it worth Xiaomi to take over?
The troubled Borgward car has become the target of Lei Jun’s desire to “buy the bottom”, but Lei Jun, who has always paid attention to “cost-effectiveness”, proposed a low price that was difficult for Lu Zhengyao to accept.
If it were not for Ruixing Coffee’s thunderstorm, Borgward Auto is still a key part of Lu Zhengyao’s automotive empire and plays an important role.
But now, Borgward’s business situation can be described as bleak. According to the Beijing Business Daily, due to insufficient orders, Borgward Automobile’s plant has been suspended for several months, and a large number of stock cars are parked outside the workshop.
It has been difficult for the Shenzhou system to maintain the normal operation of Borgward. This may be the most suitable time for Xiaomi to acquire it.
How much value does Borgward Auto have?
According to public information, the Baowo Automobile Factory is located in Miyun District, Beijing. The entire factory area covers an area of 1.1 million square meters, including stamping, car body, painting, assembly and other workshops. It has a complete vehicle production process. There are more than 1,900 employees.
Baowo stamping workshop, picture source Baowo Automobile official website
In 2018, after the completion of the second phase of Borgward’s Miyun Plant, Borgward’s plant has an annual production capacity of 360,000 vehicles, and is compatible with the production of traditional energy and new energy vehicles to meet the needs of the European Union, North America, and China. The standard has requirements for intelligent driving assistance, Internet of Vehicles, and the future expansion space.
More importantly, Borgward Auto also has both traditional energy and new energy vehicle production qualifications, which is a cheap off-the-shelf for Xiaomi.
In contrast, the new automakers have already spent a lot of money on building factories and purchasing production qualifications.
In 2018, Ideal Auto spent 650 million yuan to purchase the production qualification of Lifan Motors. On the eve of the launch of Ideal Auto, founder Li Xiangzeng revealed in Moments that Ideal Auto spent a total of one billion US dollars (about 70 100 million yuan), of which more than 2 billion yuan is used to build factories and purchase production qualifications.
Building a factory on its own is expensive, and NIO, who is taking the OEM route, spends no less on production.
From the 2019 annual report of Weilai Automobile, it can be seen that by the end of 2019, Weilai had paid 604 million yuan to Jianghuai Automobile. This price is enough for Weilai to acquire a production qualification.
At the same time, Jianghuai Automobile has invested a lot of money in order to provide NIO manufacturing.
According to the announcement of “Jac Automobile Raising Funds Raised Temporary Supplement of Working Capital” issued by JAC, as of September 30, 2018, the total investment amount of new energy passenger vehicles and core parts construction projects was approximately 2.373 billion Yuan, the accumulated investment of funds raised is about 1.575 billion yuan.
NIO’s Hefei manufacturing workshop, pictured from NIO’s official website
The foundry factory specially built by Jianghuai for Weilai was even once called by Li Bin to surpass the Porsche factory. Whether it can surpass the Porsche factory has yet to be verified, but Li Bin’s words may be sufficient to show that the Weilai production plant has an advanced production system.
In comparison, Borgward’s R&D, design and manufacturing system is also adequate. Public information shows that Baowo Auto’s Miyun Factory is a smart factory built in accordance with Industry 4.0 standards, which can realize the mixed-line production line of eight different models, that is, it can simultaneously complete the trial production of eight models on the same production line without rhythm at any time.
Specifically, Borgward Automotive Factory can complete the automatic switching mode of the whole line within 3 minutes; the 222 sets of flexible NC robot positioning system can also meet the positioning of different car bodies in the same production line; more than 5000 car body welding points are all Welded by robots, the accuracy of parts with an error of no more than 0.3 mm, more than 22,000 vehicle measurement points, and more than 290 kinds of interior accessories can be finely matched.
It can be said that Baowo Miyun Factory has highly flexible production capacity, advanced production technology, and ultra-high automation rate. This manufacturing level surpasses the manufacturing plants of most car companies in China.
According to the 10 billion yuan investment plan made by Xiaomi Automobile in the early stage, the acquisition of Borgward Automobile will not only have dual production qualifications, but also obtain ready-made world-class manufacturing plants and a group of auto workers.
It can be said that Baowo is a high-quality option, but Xiaomi’s options are not limited to Baowo.
What other options does Xiaomi have?
Xiaomi has never lacked “gossip objects” when building cars.
According to incomplete statistics of online travel, whether it is OEM or direct acquisition of car companies with production qualifications, Xiaomi has reported “cooperation” with many car companies.
Among them, the foundry companies include BYD, Great Wall Motors, BAIC, Xiaopeng Motors, etc., while the car companies that may be acquired by Xiaomi include Borgward Motors and Zotye Motors.
This may also mean that, in addition to Borgward, which has been negotiated in depth, Xiaomi actually has many options for making cars.
Just a few days before Xiaomi officially made the car public, Reuters also quoted people familiar with the matter as saying that Xiaomi intends to use the Great Wall Motor factory to produce electric cars and target the mass market. But soon, this rumor was refuted by both sides.
Actually, the cooperation between Xiaomi and Great Wall Motors is not groundless.
Last year, during the 18th Guangzhou Auto Show, Great Wall Motor’s high-end brand WEY cooperated with Xiaomi to launch the VV5 Yuanqi Orange Edition model. This model focuses on the intelligence and social attributes of the new car. To this end, it also opens up products, resources and scenes to the Xiaomi community, hoping to bring sales through young Xiaomi users.
Earlier, Xiaomi also started cooperation in user ecology with the young brand Oula under Great Wall Motors. The two parties reached an agreement on user management linkage, new retail channel co-construction, IoT Internet of Things services, 5G and AI application scenarios ecological services. In-depth cooperation.
At the same time, Great Wall Motor, as the top three domestic independent car companies, also has enough strength to OEM for Xiaomi. In January of this year, Great Wall Motor’s 10 millionth completed vehicle rolled off the assembly line, officially becoming the first domestic auto company focusing on SUV and pickup truck categories to enter the “ten million club”.
According to Future Auto Daily, at present, Great Wall Motor’s vehicle production base has covered North China, East China and Southwest China. There are three complete vehicle production bases in North China: Baoding, Xushui, and Tianjin; Chongqing Yongchuan production base leads the southwest region; East China where the Taizhou plant is located is also divided into Pinghu base, Rizhao, Zhangjiagang base and Great Wall Holdings East China (Shanghai) headquarters base.
Great Wall Motors production base, picture source Great Wall Motors official
In terms of intelligence, at present, 90% of Great Wall Motor’s models have realized the L2 level intelligent assisted driving function, WEY and Euler brand models have all realized vehicle networking application coverage, and nearly 90% of Haval brand models have been equipped with vehicle networking.
As a car company that has experienced ups and downs for 30 years, Great Wall Motors is obviously capable of OEM production for Xiaomi.
In addition to Great Wall Motors, BYD has also been rumored to be the OEM of Xiaomi Motors many times, and the relationship between BYD and Xiaomi has a long history.
As early as 2014, BYD Electronics started cooperation with Xiaomi, and has cooperated with more than 30 products until 2020., The two parties also jointly established a joint laboratory to jointly explore technology in the field of mobile phones. In addition, some Xiaomi series mobile phones can also activate the mobile NFC car key by linking with the BYD cloud service application to open or close a specific car door.
More importantly, BYD has established a full-industry chain ecology in the automotive field. It not only has vehicle manufacturing capabilities, but also has deep accumulation in power battery, electronic control, and electric drive technologies.
In other words, if Xiaomi Automobile cooperates with BYD, BYD can fully cover its key components and vehicle manufacturing.
In addition to adopting the foundry model, Xiaomi is more likely to achieve car manufacturing by directly acquiring car companies.
Previously, Xiaomi and Zotye Automobile also reported related cooperation. The reason is that Zotye Automobile is on the verge of bankruptcy and reorganization and needs a “take-up man”, and Xiaomi may become one of the investors in the pre-restructuring.
However, on April 6th, *ST Zotye issued an announcement stating that Xiaomi did not sign a cooperation agreement with Zotye Automobile, but that two investment companies, Shanghai and Hunan, participated in the pre-restructuring.
However, it is also mentioned in the announcement that an internal evaluation is still ongoing. The two investment companies have not further clarified their investment intentions. There is still a lot of uncertainty about whether they will finally decide to reorganize Zotye Automobile. This means that Xiaomi actually still has a chance to enter the game.
According to public information, Zotye Automobile has factories in many places across the country, with ready-made workshops and production lines. At the same time, Zotye Automobile has invested 630 million yuan in new energy vehicle development projects since 2018. Technology accumulation.
Xiaomi’s “acquisition” to Zotye Automobile can also solve the problems of qualification, land, plant, and production lines at one time.
For Xiaomi, as domestic small and medium-sized car companies fall into business difficulties, they have a lot of choices. At present, Xiaomi may be entangled with which production method or car company to choose.
What is the best route for Xiaomi to build a car?
“It takes a long time to build a car, and it takes three years to make a car faster, so we still have enough time to discuss and decide what the Xiaomi electric car will be named after.” Lei Jun was vaguely in an interview with CCTV Finance Mentioned the time when Xiaomi cars went on the market.
From Lei Jun’s public speech, Xiaomi’s first car will take the mid-to-high-end route, and the price may be in the range of 100,000 to 300,000.
As a mobile phone manufacturer, although Xiaomi has deployed patents in the automotive field and invested in upstream and downstream companies, it has not accumulated much in core technology.
According to the company’s intellectual property information, as of March 29, 2021, “Xiaomi Technology Co., Ltd.” has a total of 6,758 valid patents, of which patent names and patent abstracts include “engine, navigation, driving, radar, driving There are 211 patents.
Xiaomi’s vehicle-mounted screen display method and device patents, please check the source of it
Through combing, it is found that Xiaomi’s patent applications are mainly in the areas of smart cockpit, driving safety and hardware, including blind spot monitoring of vehicle safety systems, rest reminding methods and devices during driving, methods and devices for remotely controlling cars and terminals, etc. patent.
However, although Xiaomi has already had a layout in the automotive field, it has not accumulated much in the core intelligent driving systems, autonomous driving chips, and three electric fields of smart cars. This also means that if Xiaomi wants to build a smart car that is truly recognized by the market, it still needs a lot of hard work.
If Xiaomi is going to be on the market within three years, it can be seen that it is unrealistic to start from scratch, so the best choice for Xiaomi may be to follow the route of Xiaopeng Motors, first find an OEM to build a car, and then take it later. To the production qualification, self-built factory production.
In 2017, Xiaopeng Motors and Haima Motor signed a cooperative manufacturing framework agreement. The two parties initially determined a cooperative production capacity of 50,000 vehicles per year. The cooperation period is 4 years.
But at the same time, in May of the same year, Xiaopeng also invested 2 billion yuan to build its own Zhaoqing factory, which was built in accordance with Industry 4.0 standards and adopted the MES manufacturing execution system, with a total production capacity of 100,000 vehicles.
After the self-built factory was completed in 2019, Xiaopeng P7 also embarked on the road of independent production. In March last year, Xiaopeng Motors acquired the relevant production qualifications through the acquisition of Guangdong Foday Automobile Co., Ltd.
As Xiaopeng Motors is gradually recognized by the market, on April 8, Xiaopeng Motors also signed a contract with the Wuhan Economic and Technological Development Zone Management Committee for the Wuhan Intelligent Manufacturing Base, covering an area of about 1,100 acres and a planned production capacity of 100,000 vehicles.
This is the third factory after Xiaopeng’s production bases in Guangzhou and Zhaoqing. If the three factories are started at the same time, Xiaopeng Motors will have an annual production capacity of 300,000 vehicles.
It is worth noting that Wuhan and Lei Jun have very close ties. As a student who graduated from Wuhan University, Xiaomi’s second headquarters was chosen in Wuhan. After Xiaomi’s official announcement of the production of the car, the Wuhan city message board was instantly crowded with suggestions for the introduction of Xiaomi’s electric vehicles into Wuhan. This has been highly valued by the governments of various districts in Wuhan.
On the other hand, Lei Jun is also an investor in Xiaopeng Motors. Through Shunwei Capital and Xiaomi Group, he invested in Xiaopeng Motors twice, and Lei Jun is also an investor in Weilai Motors.
It can be seen that Lei Jun has long been familiar with the development trend of new car-building forces, and the development routes of Xiaopeng Automobile and Weilai Automobile will also provide Lei Jun with various ideas.
However, even though Lei Jun is still struggling with what the name of the Xiaomi electric car should be called, based on three years, there is not much time left for Xiaomi to build a car.