HiPhi Y
BEIJING, Feb 22 (TMTPost) -- On Sunday, the first work day after the Spring Festival, HiPhi has garnered widespread attention and discussion due to news of "shutdown for 6 months." This emerging brand has repeatedly been rumored to have stopped production, downsized, and cut salaries in the past year, and negative news has eventually erupted.
An employee from a retail store of HiPhi told TMTPost App, "Because the factory is shut down, it is now impossible to purchase cars from the store. For customers who have already ordered cars, the company will refund a deposit of 5,000 yuan. It will adjust its retail structure, with only delivery centers and after-sales services available."
Information from other sources confirms the fact that HiPhi is already on a downhill. So, what caused HiPhi, once highly regarded by the public, to shutdown?
The operating entity of HiPhi, Human Horizons, was founded in 2017 by Ding Lei, who also serves as the chairman.
The core team of Human Horizons initially included senior automotive veterans with over 20 years of experience. They embraced cutting-edge ideas, and sought to create a new luxury brand featuring intelligence and electrification.
At the same time, Ding's political and business background played a positive role in Human Horizons' financing. Its investors included Shenzhen Manjinghua (MJH) Investment Group Co., Ltd., local state-owned assets from the government of Yancheng, Jiangsu, and Yueda Group. and state-owned capital from Shenzhen Capital Group (SCGC) and State-Owned Assets Supervision and Administration Commission of Qingdao Municipal Government (Qingdao Municipal Government SASAC).
With the support of the capital, HiPhi was able to gradually launch three mass-produced cars within a few years: HiPhi X, HiPhi Z, and HiPhi Y. The first two are positioned in the pure electric market with prices above 500,000 yuan, and the third, HiPhi Y, is priced lower to boost sales.
However, the fiercely competitive Chinese new energy vehicle market is severely squeezing the living space of luxury brand electric cars. Even the pure electric cars of BBA (Mercedes-Benz, BMW, and Audi) are sold at a discount. How can a fledgling brand like HiPhi command a premium similar to Porsche's?
Moreover, HiPhi did not truly establish its core competitiveness. Except for the cool and stylish door-opening method, it's difficult to have a more specific and clear perception of the brand.
As a high-end brand, HiPhi has assets, a platform capable of producing three mass-produced cars, and a certain user base. Such a company will not disappear overnight. There are several ways to pull it out of the ICU.
Ding's top priority is to find the "life-saving money." However, many institutions have already closed their investment windows for the entire new energy vehicle brand.
In comparison, it is more possible that the local state-owned assets will give a hand. As a community of interests, the Yancheng state-owned assets behind HiPhi and the Qingdao Municipal Government SASAC will also be benefited by reviving HiPhi's assets.
There is another possibility for reviving HiPhi, which is to be acquired by another large automotive group and exist as a "high-end new energy sub-brand." Many ultra-luxury brands in history have been able to sustain themselves by relying on the profitability of mass-market products within the group. This seems to have become a survival rule for high-end brands, but this process requires the automaker to endure long-term loneliness.
The competition in 2024 in the automotive industry will only become more brutal. The issues that HiPhi and other companies have faced are enough to alert the players still at the table.
(This article was first published on TMTPost Media. Author | Li Yupeng, Editor | Zhang Min.)
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