Huawei’s Bias and Helplessness!

There was a rumor in June that Chery was planning to establish a sales company for the Zhijie brand, but now there has been a new development. Recently, there has been information that the Zhijie sales company project has been put on hold.

To be honest, this news is quite surprising. This is because on August 19th, Seres Automobile Sales Co., Ltd. was renamed “Chongqing Wenjie Automobile Sales Co., Ltd.” At that time, there was a view that Huawei was determined to decentralize. Not only did it transfer the trademark and brand usage rights of the cooperative models to the cooperative company, but it also explored more in the direction of “contacting more automotive partners,” such as inviting other automakers to invest.

Chery’s establishment of the Zhijie sales company, with comprehensive marketing functions including brand, PR, channels, after-sales, and training, would be under the Zhijie business division. Besides the Hongmeng Zhixing channel, it aims to create a dedicated sales and service network and user center for Chery. This could be considered a complete operational system.

However, the Zhijie sales company has been put on hold, and now things have become very interesting because, on the other hand, the Wenjie sales company has been established, which is a completely opposite attitude. This must be the result of Huawei’s influence.

The question now is, what is the difference between Zhijie and Wenjie that causes Huawei to behave so inconsistently?

The sales gap between the two is significant. Among the automakers collaborating with Huawei, only Wenjie has achieved outstanding sales and reputation.

In the first seven months of 2024, Wenjie’s cumulative delivery reached 223,000 units. The most notable performance was from the Wenjie M7, with a wholesale sales volume of 122,000 units from January to July, a year-on-year increase of 1661%; from January to July, the Wenjie M9 won the first place in the domestic luxury car market with a sales volume of over 71,786 units at a price of 500,000 yuan and above. In early August 2024, according to Yu Chengdong, the Wenjie M9 had over 120,000 orders in the first seven months since its launch.

The first model of the Zhijie brand, the S7, was first launched in November 2023, and its sales performance was not impressive after its launch. In this situation, the Zhijie S7 completed its second launch in April this year, with upgraded configurations and a reduced price, showing sincerity. The effect was immediate, with sales exceeding 5,000 units in the month of launch, and maintaining over 5,000 units in May. After the climax, sales entered a quiet period in June and July, with only 2,306 units sold in June and 1,541 units in July.

This may have a lot to do with the brand recognition of Zhijie. After all, as Huawei’s first supported automotive brand, Wenjie has received unprecedented attention in terms of resources invested by Huawei and the public support from Yu Chengdong. As the second brand, although Zhijie also received the same support, it still lacks that unique feeling, and its communication effect is less than satisfactory; some people also believe that pure electric models are inherently difficult to sell, so it’s understandable that the Zhijie S7 is not ideal.

This is reflected in the market sales level, where Huawei’s attitude towards Wenjie and Zhijie differs. In layman’s terms, Wenjie has already come into its own and can stand on its own, while Zhijie is just starting out, with wings not yet hard enough to fly alone.

From this perspective, Huawei’s support for Wenjie and the put-on-hold of Zhijie seem to make sense.

In addition, this also has a lot to do with the two partners. Seres, as a loyal follower of Huawei, fully cooperates with wherever Huawei points, while Chery is confident and has its own opinions and ideas, and Huawei has always been dominant. The cooperation between these two strong players may not necessarily produce a 1+1>2 effect; on the contrary, it could be less than 2.

This is how cooperation is; on the surface, it’s peaceful and there’s a celebration together, but behind the scenes, there are intense confrontations and games.