Huawei Splits Car BU to be the Next Bosch?

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On the afternoon of November 26th, Changan Automobile released an announcement regarding the signing of the Investment Cooperation Memorandum, announcing that it had reached an intention agreement with Huawei on the 25th to establish a new joint venture between Huawei and Changan. The intelligent driving solutions, intelligent car cabins, intelligent car digital platforms, intelligent car clouds, AR-HUD, and intelligent car lights under Huawei Automotive BU will all be injected into the new company’s business, assets, and personnel.

Simply put, Huawei will spin off its automotive BU and package it into a joint venture with Changan Auto.

According to the agreement, Changan Automobile plans to invest no more than 40% in the joint venture company. Of course, Changan Automobile will not be the only investor in automotive companies. According to the announcement, the joint venture company will open its equity to existing strategic partner car companies and investors with strategic value, becoming a diversified company with diversified equity. Yesterday evening, the first cooperative car company of Huawei Smart Selection, SERES, announced that it had received an invitation to invest in a joint venture company.

Previously, senior executives of SAIC Motor Corporation had lost the soul of the automotive company due to concerns about adopting Huawei’s technological solutions. Nowadays, as Huawei divests its automotive BU and opens up financing to car companies, it has greatly promoted the trend of technology platforms towards “shared ownership, governance, and sharing”. To a certain extent, the “soul theory” doubts about host manufacturers transferring software control to suppliers are also expected to be dispelled.

It is worth noting that Huawei’s main injection into the joint venture this time is the automotive BU business, and the company’s Smart Selection car business and HarmonyOS system are not included in it. According to domestic news, Huawei Smart Selection will continue to be a customer of the joint venture company, purchasing technical solutions from the latter.

According to the announcement, both parties plan to sign the final transaction documents within 6 months, determining the equity purchase agreement, shareholder agreement, new company articles of association, and final transaction document items.