Original link: https://www.latepost.com/news/dj_detail?id=1760
Shen Ziyu is someone who is easily seen and favored by opportunities. Smart, hard-working, and energetic, if a tribal leader wants to explore the stars and seas, he may be the right captain.
At the age of 30, Shen Ziyu met Li Shufu, chairman of Geely Holding Group. At that time, the trend of car intelligence had just emerged. Li Shufu realized that the technical competition among car companies in the future might no longer revolve around engines and gearboxes, but software capabilities. Therefore, he decided to form a team that understood both embedded development and software. He found Shen Ziyu.
Shen Ziyu is one of the earliest practitioners in China’s Internet of Vehicles industry. He joined PATEO in 2012 and has successively built intelligent Internet connection systems for more than a dozen car companies. In 2016, he and Li Shufu jointly established the Internet of Vehicles company “Yikatong Technology” (hereinafter referred to as Yikatong). In the next 6 years, Li Shufu successively settled in the fields of Internet of Vehicles, automotive chips, mobile phones, and high-end electric vehicles, all of which he asked Shen Ziyu to manage.
In 2017, Yikatong and Anmou China jointly established the automotive chip company “Sinengine Technology”; in 2021, Li Shufu created the “Xingji Era”, and then signed a contract to acquire 79.09% of the controlling stake in Zhuhai Meizu Technology Co., Ltd.
Shen Ziyu knows exactly where each company should go. Yikatong and Coreengine Technology are 2B companies, and their mission is to provide solutions for enterprises. “We will do what customers want.” If 2B companies want to survive, they must have long-term and stable customers. To grow and thrive, you must have world-class clients.
Xingji Meizu and its newly established joint venture company with Polestar belong to the 2C industry, and its products are directly oriented to consumers. It is necessary to accurately meet the needs of target users and launch competitive products in order to gain corresponding market share.
Shen Ziyu prefers to do 2C things. He has been in the Internet of Vehicles industry for more than ten years, and he knows that as a supplier, he can only touch a link in the product development chain, and cannot play a decisive role in the success or failure of the end product.
He set very high goals for both 2C companies. Meizu mobile phones will return to the top five in the domestic mid-to-high-end mobile phone market within 3 years; Polestar Motors will join the ranks of Mercedes-Benz, BMW, and Audi, and occupy a place in the luxury electric car market.
It’s not easy. Since Huawei was restricted in the mid-to-high-end mobile phone market, no manufacturer has successfully filled the market. Instead, Apple’s market share has continued to expand. Star Age also encountered many challenges before meeting Meizu, and there were constant software problems. “The core operating system must have strong experience, and it is not easy to build a high-rise building on the ground.” Shen Ziyu said.
The emergence of Meizu just made up for this board. At that time, Meizu gradually weakened in the price war in the mobile phone market, and its business gradually shrank. However, the Flyme system has been accumulated for 10 years. There are 30 million “charming friends” communities, 100 million registered users, and 5 to 6 million daily active users (DAU). These core assets are not available to newly formed mobile phone companies.
After Xingji era acquired Meizu, the sales of the newly released product “Meizu 20” have increased significantly compared to before, and the Flyme Auto car-machine system has also been developed based on the Flyme system. In April this year, Polestar 4 equipped with Flyme Auto Core was launched at the Shanghai Auto Show. After the establishment of the joint venture between Xingji Meizu Group and Polestar, it will also develop the Polestar OS system based on Flyme Auto Core.
Compared with peers, Shen Ziyu believes that Xingji Meizu has many advantages. It is more reasonable for mobile phone companies to develop car-machine systems than for car companies to develop mobile phones. Xingji Meizu’s mobile phone R&D team has 2,400 people, and only 200 people are needed to develop the car-machine system based on the mobile phone system. Such a huge team cannot be afforded by the car company, because mobile phone software can bring in income, the launch of the app store, the distribution of games and advertisements, plus the gross profit from selling mobile phones, it is not a problem to support the software team. However, there is no mature software charging model for cars, and the R&D investment is entirely the cost of the enterprise. With Xingji Meizu as the backing, Jixing can go into battle lightly. “If we start from scratch, it will be very difficult for us.” Shen Ziyu said.
Automobiles are a more difficult industry than mobile phones. After the establishment of Polestar’s joint venture company, Shen Ziyu will devote more energy to the car. He said that Yikatong Technology, Core Engine Technology, and Xingji Meizu Group all have stable management teams, and the daily operations can be trusted to them. He is only responsible for controlling the overall strategic direction. Smart electric vehicles are an uphill battle and must be fought with all our might.
Polestar’s brand benchmarks against Porsche. Polestar 3 (RMB 698,000-798,000) and Polestar 4 (RMB 349,800-533,800) respectively correspond to the two most popular cars in the Porsche product matrix, Cayenne and Macan.
The current annual sales volume of this market is between 2 million and 3 million units, mainly occupied by fuel vehicles of Mercedes-Benz, BMW and Audi, and the penetration rate of new energy is extremely low. Shen Ziyu believes that this is both an opportunity and a challenge for Jixing.
Compared with products of the same level, he believes that Polestar has three cards to play. First of all, in terms of hardware, Polestar has a design and R&D team with a scale of 1,000 people in Europe. The hard-core automotive technology related to safety and handling has inherited Volvo’s genes. In terms of software, Polestar builds Polestar OS on the basis of Flyme Auto Core, with the goal of making the most usable car-machine system. In addition, Polestar originated from Northern Europe. As a global high-performance electric car brand, it can be more luxurious than Tesla, smarter than traditional cars, and has inherent advantages in globalization.
Polestar has factories and supply chains in many markets around the world. Shen Ziyu believes that only globalization can hedge against the “involution” of the Chinese market. The most difficult part of globalization, he believes, is managing local teams and supply chains. In this regard, Chinese companies have had little success over the years. “Various reasons lead to high costs over there (overseas market), so let’s do it here (in the Chinese market). All kinds of protectionism may come. You don’t create jobs, the supply chain is not here, and you still want to sell things in the past. If you don’t raise your tax, who else will pay?”
Smart electric vehicles are a track with long slopes and thick snow. Shen Ziyu believes that this competition will not end so soon, and the Chinese market will not be monopolized by a few companies. The praise received by some car companies today may only be temporary. Building a car is a long-distance race. “There are always times when the energy is exhausted, and there are times when the product is replaced. It is a pack of wolves attacking, and it will never end.” Shen Ziyu said.
The following is the dialogue between “Later Auto” and Shen Ziyu:
sea of stars
Later Auto: Many people think that you are exploring the future stars and oceans for Geely Holding Group?
Shen Ziyu: I don’t think so. Our company does not have any equity relationship with Geely Holdings, it is invested by Mr. Li Shufu himself. All the industries that Eric (Li Shufu) and I cooperate with are created by our own exploration and creation. Although there are many opportunities, there are also various risks in it, so we set up a separate company to cooperate.
Later Auto: In 2017, you and Li Shufu co-founded Yikatong. What was the opportunity at that time?
Shen Ziyu: At that time, he felt that the future must be the competition between intelligence and electric vehicles, so he needed an intelligent team with embedded development, semiconductor, and online capabilities, so he came to us.
Later Auto: You started to get in touch with the Internet of Vehicles when you were in SAIC-GM. Later, you joined PATEO and provided Internet of Vehicles systems for more than a dozen car companies. It was also at that time that you started to cooperate with Geely. What kind of projects were you working on?
Shen Ziyu: We will make “Hello! Boyue” for Boyue to evoke the voice, and the entire car networking system. When 4G just started, we put 4G, a surround-view camera, and an 8-inch screen on it, and the Boyue was sold out. At that time, I met Mr. An and Mr. Feng, and we made an end-to-end offer together.
Later Auto: Tesla entered China in 2013. At that time, you were in the Internet of Vehicles industry. Were you affected by Tesla?
Shen Ziyu: IoV companies couldn’t do much at that time, because car companies could only accept 8-inch screens and 7-inch screens. They had to consider the cost, and IOV companies couldn’t define the entire car product. Tesla has promoted the development of the entire automobile industry, and the people in the automobile company have begun to understand. They feel that it is necessary to consider this matter very exaggeratedly. They think that the screen in the car is very important. This should be something that car companies should think about, and B2B companies should provide the best solutions and technologies.
Later Auto: You are one of the earliest practitioners in China’s Internet of Vehicles industry. You became the chairman of several companies at a very young age. Summarize your past career and what important choices did you make at the critical fork in the road?
Shen Ziyu: I don’t think I’m very successful. Many people in this industry are very good and successful. For example, Li Xiang, who is also born in the 1980s. He was the first to go public in the United States. Autohome defined the entire automotive vertical media, with traffic more than 8 times that of Bitauto, and he was born as a product manager. Ideal is also very good in Wei Xiaoli now, regardless of the profitability of the product or market reputation. He has succeeded in the whole car and is very focused. On this, I think I have a lot to learn. Fortunately, I am three years younger than him, and I still have the opportunity to do many things.
Later Auto: Ideal is a very dedicated company that does nothing but cars. You have done a lot of things that it will not do, how do you think?
Shen Ziyu: He started from scratch, and it is (already) very complicated to complete the car. Chairman Li Shufu has accumulated a lot in so many years of entrepreneurship. I will graft this accumulation to do things that they don’t have. In fact, I am also very focused. What I do are things that Geely did not do. But the ideal does not have these inheritances, it has to pick it up by itself, and at the same time, it has to start from scratch with the traditional things of the car, which is more complicated than me.
He is luckier than me, has been doing B2C, facing consumers. I have been doing B2B for a long time, facing enterprises and doing solutions. It is difficult for me to convince users, because we do not have the right to decide on many products. If our customers screw up this product, we will screw up with it, and there is no way to protect ourselves from it. Moreover, a car is a heavy, mixed, and complicated thing. If one link goes wrong, many links will go wrong. Just like the chip is out of stock, because of a chip, your things can’t be shipped.
Although I have launched Yikatong in the United States, and the chips of Xinengine Technology have also come out, but the layout of all this is B2B, and there are too many uncontrollable factors in it, which is why Eric (Li Shufu) later asked me to do Xingji Times, Xingji Meizu Group, including the current Polar Star. I am very happy because I have the opportunity to do B2C things.
Later Auto: Do you prefer to do B2C stuff?
Shen Ziyu: I really want to do B2C things, and I think what I need to learn is actually the brand. There is a big gap between China’s brand power and global brand power. Why Apple can be sold so expensive, on the one hand, it has technical capabilities, and on the other hand, everyone recognizes this brand and is willing to pay a higher premium to buy products and services of this brand. At present, Chinese companies are working hard, and it is also something I have always wanted to pursue.
multi-terminal company
Later Auto: You are now the chairman of Yikatong, Xinengine Technology, and Xingji Meizu Group, and you will also play an important role in the Polestar joint venture company. How do you allocate your energy now?
Shen Ziyu: Yikatong and Xinqing, this is a B2B business. Xingji Meizu Group and Jixing are B2C businesses. In the next period of time, I will focus more on the complete vehicle, which is the joint venture company Polestar.
I basically don’t care much about the operation and management of Yikatong. The team is mature and stable. The team of Dr. Wang Kai from Core Engine is very professional. I am responsible for the strategy, which is the product roadmap, including what kind of performance the product’s SPEC (Specification) can achieve, product benchmarking, market positioning, project execution, etc.
Meizu’s daily management team Huang Zhipan is doing a good job, I am quite relieved. I am more at the level of brand image, strategy, and capital market. We also have an AR glasses team, which has been working for three years, and will release products in September or October. This is an independent R&D team and will report to me.
Now everyone is equal, with a unified supply chain, quality management, and back-end system, but the R&D team is different. The future commercial branding and marketing will be the same.
Later Auto: The joint venture between Xingji Meizu Group and Polar Star is positioned as a multi-terminal company, just like Apple and Huawei. How do you think about this?
Shen Ziyu: We still think from the brand point of view, because Meizu is a mid-to-high-end brand, and Jixing is a luxury brand. Our purpose is to serve the crowd well, so we will self-develop the Polestar OS based on Flyme Auto Core to drive the growth of different terminals of the Polestar brand, which will be the soul of all smart terminals of the joint venture company. In the future, there will not only be Polestar cars, but also Polestar-branded mobile phones, home equipment, charging equipment and other smart terminals.
Later Auto: You previously set the goal for Meizu mobile phones to return to the top 5 in the domestic mid-to-high-end market within three years. How do you differentiate the positioning of Polestar mobile phones and Meizu mobile phones now?
Shen Ziyu: Polestar Mobile is positioned as a high-end smart phone. Just like Huawei’s Porsche Design, it must achieve this level and sell for 10,000 yuan.
Later Auto: Do you only make this one? Huawei also has many other models.
Shen Ziyu: We will only make one style and not others. Meizu already has many, and Polestar only needs to make one.
Late Auto: Is it aimed at people who drive Polestar cars?
Shen Ziyu: I drive a Polestar car, or I like the Polestar lifestyle.
Later Auto: What else can terminals do and not do besides mobile phones?
Shen Ziyu: I can make smart speakers, smart watches, and AR glasses. We can only be a computer, a car is a computer, a mobile phone is also a computer, and glasses are also a computer. Because there is a computer, there will be interaction, data, and users. If it’s not a computer, I wouldn’t be able to do it, such as a robot vacuum, I can pick it up, and I don’t need to do it.
Later Auto: To sum up, the core product is the car, and the mobile phone is if you want it, I have it. Are other terminals equivalent to peripherals?
Shen Ziyu: Yes, that’s what it means.
Late Auto: Are you going to do it in phases, do what you do first and then do it later, or do you do it all at the same time?
Shen Ziyu: At present, mobile phones have been produced, and cars have also been produced. These are the two largest terminals. It is fair for everyone to have 24 hours. In fact, there are only a few terminals. The mobile phone is about 5 hours, the car is 1 hour, and the rest is at home. It is either a TV or a computer, nothing else. We have been making cars. Chairman Li Shufu is full of cars, and mobile phones are new to us.
Polestar and Xingji Meizu established a joint venture company. Shen Ziyu (third from left) and Li Shufu (fourth from right) attended the signing ceremony.
Car companies make mobile phones
Later Auto: You are making mobile phones, and Weilai is also making mobile phones. Should car companies make mobile phones?
Shen Ziyu: Start from scratch, now the time has passed. If we do not acquire Meizu, it will be very difficult. The sales volume of our (Meizu 20) since its launch has been in line with expectations, and the supply of products in the market is in short supply. This is still a data based on production and sales. If you want to sell so much, you need to raise at least 2,000 more people. We now have a team of 2,400 people. If you treat your mobile phone as an accessory, you can’t handle it. Because you need a large enough quantity, your supply chain will do.
There are at least 2,000 people working on the software for an Android phone, three or four thousand people working on MIUI, and tens of thousands working on IOS, because it has many versions, models, and regions. How do you fight with others? Can’t beat it.
Later Auto: If car companies really set up a mobile phone team of one or two thousand people, can they make mobile phones work?
Shen Ziyu: I think it is quite difficult, because it lacks accumulated experience, and we have ten generations of Flyme. I still keep saying, it’s hard. Because the core operating system requires a lot of experience, it is not possible to build a high-rise building immediately. It doesn’t mean that you recruit a few people and accumulate these experiences. This is a matter of IP. It is difficult to make software without ten years of accumulation.
Late Auto: Why does it take ten years of accumulation? Everyone has only been doing cars and machines for a few years, is it not bad?
Shen Ziyu: Because you need a lot of user data. The car-machine system takes a short time. You don’t need to turn off your mobile phone, and you have to run so many apps at the same time. The time spent interacting with it every day adds up to 5 hours, and the car may only take 1 hour. The pressure of the whole software is far greater than that of the car.
Later Auto: You will form Star Age in 2021 and acquire Meizu in 2022. Did you already want to accept Meizu when you formed it?
Shen Ziyu: It wasn’t that I took the initiative to find an acquisition target, but I met Meizu later and was introduced by a friend. It went very smoothly, and the negotiation was over in three or four months.
Auto later: What do you want to do before you meet Meizu?
Shen Ziyu: We just want to make the most high-end mobile phones, priced at 5,000 to 6,000 yuan. Maybe we don’t need high capacity. We want to make money and work steadily, but it is difficult to achieve the ultimate. The problem is that your supply chain, including quality and software, is uncertain. Because you need a non-powerful human-computer interaction system.
Later Auto: Is the acquisition value of Meizu mainly due to its user base?
Shen Ziyu: Yes. It has a 30 million Meiyou community, 100 million registered Flyme users, and five to six million DAUs every day, all of which are core assets. It is also quite difficult if we do it from scratch.
Late Auto: Why would they want to sell?
Shen Ziyu: Because they have reached a bottleneck in their development. Although it is profitable, it is difficult to develop. Everyone requires development.
Later Auto: He thinks it is difficult for him to develop, but you think he can develop?
Shen Ziyu: He actually hopes to have a big platform. Chairman Li Shufu is a big platform with greater resources. For example, in the supply chain, I have now fully connected the vehicle and mobile phone supply chains, fully cooperating with Geely, and the advantages of the supply chain are no worse than those of Xiaomi. For example, the screen, I talked with BOE, I will give you the screen of the mobile phone, and I will also give you the screen of the car. The price of the car may be ten times the price. Samsung memory (memory card) is the same, so is Qualcomm, and Sony’s camera, including the battery, is all available.
Later Auto: The goal of Meizu mobile phones is to return to the top five in the domestic mid-to-high-end market within three years. Who do you think will fall?
Shen Ziyu: All are possible. Now the situation is changing rapidly, and there are opportunities and challenges.
Later Auto: Meizu mobile phone released the new product Meizu 20 in March, how is the market reaction now?
Shen Ziyu: Our product is very successful this time, the quality of the software is very good, and the DI value is lower than 50. This product is now sold according to production, and the supply exceeds the demand. The output is here, and cannot be restocked. Because, for example, for some materials such as Qualcomm and Samsung, you have to place an order 6 months in advance. It is impossible for me to download it now, because it will be replaced at the end of the year. The car is replaced by a generation in about five years, and it is just a face change in one or two years. The mobile phone was replaced in ten months. At the end of the year it was completely brand new.
In April this year, Xingji Meizu released Meizu 20.
Making a car is harder than making a phone
Late Auto: Is it more difficult to make a mobile phone or a car?
Shen Ziyu: It must be difficult to build a car. Because the car still has a lower body, steering, brakes, and three-electric system, a lot of things.
Later Auto: They have a point of view that mobile phones are now stabilized at 5 companies accounting for 80% of the market share, and the same will be true for cars. How do you judge?
Shen Ziyu: I think it is quite difficult. This situation is unlikely.
Auto later: Car companies that do not sell well may not disappear, but they will become the long tail of the 20%, and 80% of the market is still occupied by better companies?
Shen Ziyu: It’s like long-distance running. There are always times when the energy is exhausted, and there are times when the product is replaced. It is a pack of wolves attacking, and there is no end.
Later Auto: This is why electric vehicles are very popular, but many investors in the primary market do not invest in complete vehicle projects, because they feel that this war is not like the Internet, which is over in five years, and then begins to expand without marginal costs.
Shen Ziyu: Very introverted, very introverted, quite introverted.
Later Auto: What kind of style of play should be used in such an introverted competition?
Shen Ziyu: We must go global. Hedging the entire market dependence.
Later Auto: The problem with globalization is that the international environment has been unstable in recent years, and everyone will worry about what to do in case of policy restrictions and tariff increases?
Shen Ziyu: So we need a combination of globalization and localization.
To manufacture locally, Tesla is in the local market. In China, the localization rate is 98%. After arriving in the European Berlin market, the local supply chain accounts for 97%. In North America, even if the Chinese factory is so cheap, he will not sell it back to North America.
A global enterprise does not mean that your goods are sold globally, but are integrated in the global supply chain. Your employees are from different countries and regions, and your supply chains are different. You need to refine your management through your culture and philosophy. This is called a global enterprise.
Polestar 4, benchmarking Porsche Macan.
Benchmark Porsche
Later Auto: There were rumors that Xingji Meizu wanted to make a complete car, but later gave up. Now it is a joint venture with Polestar. What is the opportunity?
Shen Ziyu: I told the chairman that there should be a complete vehicle and a best practice. (As a supplier to car companies) it is difficult to empower, because it is a relationship between Party A and Party B, and you cannot decide the product. At present, I can complete my best practice on Polestar, as well as a high-end brand.
Later Auto: How will Polestar brand and products be positioned in the future?
Shen Ziyu: Our product positioning is high-end luxury, which is comparable to Porsche. Cayenne and Macan are normal cars, Panamera and 911 are special cars. Our Polestar 5 and Polestar 6 are luxury cars, just like Porsche Panamera plus 911, Polestar 3 and Polestar 4 are Cayenne and Macan. Polestar 7 is still being defined.
Later Auto: The brand is benchmarked against Porsche. In terms of products, the current price range ranges from 300,000 to more than 1 million. Do you want to be more detailed?
Shen Ziyu: No, I don’t want to, we think it’s enough to concentrate.
Later Auto: Polestar 3 and Polestar 4 are in the price range of 300,000 to 600,000 yuan, and they are in the same market as BBA, NIO, and Ideal. What are the opportunities and challenges for Polestar?
Shen Ziyu: The opportunity is that the current annual volume of about 2 million to 3 million units is still available at this price, but they are still selling petrol cars instead of trams. Convincing them to accept the tram is the core issue and the challenge. Because these people are not very sensitive to fuel economy, they may consider more convenience. He has no mileage anxiety when he buys a gasoline car. It is very casual to go to Shanghai and Hangzhou on weekends, but if you go out by tram, you have mileage anxiety.
We have inherited Volvo’s safety (safety), and we must be able to meet the highest safety test level requirements in major markets including China, Europe and the United States.
Because Polestar is a global car, it is expected that there will be hundreds of thousands of sales worldwide next year, because the three largest markets in the world will work together. Although Polestar 2 sold less in China before, there are 50,000 units in the world, and its channels are all ready-made, so I can surpass its supply chain level in the third year.
Late Auto: In terms of products, what advantages does Polestar have over competing products?
Shen Ziyu: First, many people buy luxury cars and hope to buy global brands. Our Polestar is a global brand, and the design team is in Northern Europe. Second, we are more luxurious than Tesla. We have Scandinavian minimalism, but also Scandinavian luxury. We make up for its luxury, which may be 30,000 to 50,000 yuan more expensive than it. Third, a traditional car is not high-tech, it is not a smart electric car. We have high-tech and Xingji Meizu software, so it is more luxurious than Tesla and more high-tech than traditional cars. This is our positioning.
Our Polestar 4 is the king of curves, with a strong driving experience. Because Polestar’s tuning has inherited Volvo’s very core genes, our curves are very good, and the power consumption is also well controlled. The power consumption per 100 kilometers is about 15 degrees. These are core advantages. Not to mention our intelligent plus OS, including our audio system and so on.
Later Auto: You propose to make the best car-machine system, what kind of car-machine system is the best?
Shen Ziyu: We seamlessly connect the capabilities of the mobile phone software to the car, and the chips we use at the same time are all our own chips. In terms of vertical integration, we are the most complete.
Our Android team may have about 2,000 people. It is difficult for general car companies to support an Android team of 2,000 people. They cannot afford it, but mobile phones can afford it. The volume of mobile phones is large enough, with shipments of millions, tens of millions, or hundreds of millions of units.
Second, software generates income. Our Flyme has 5 million to 6 million DAUs a day. We have an operating model for the launch of the app store, the distribution of games, and the distribution of advertisements. The car team does not have an operating model, which is the cost. Therefore, the size of our software team must be larger than yours, and we are exposed to the latest versions of Android and Qualcomm. You are two years away. Our team pulled a branch out to make cars, which is a blow to dimensionality reduction.
Later Auto: How many people do you have in the car machine branch?
Shen Ziyu: 200 people can do it, because we are based on 2000 people, including the cloud, all bandwidth is shared, and the server is also shared. The mobile phone needs to download OTA every day, how much is the car? How can your cost be lower than mine? The sales volume and gross profit of the car are placed there, and a team of thousands of people cannot be covered.
Later Auto: How are Polestar China and overseas teams cooperating now?
Shen Ziyu: The European team is responsible for the entire Polestar brand positioning, which is very important because we are a global brand, not a Chinese brand. If I am in charge, it will become a Chinese brand. I need a global vision, from Scandinavia, from Nordic sustainable development, these visions (visions) will not change. It is a Scandinavian brand and needs to please global consumers. Everything in China (market) is the responsibility of the newly established joint venture company.
Title picture: Shen Ziyu, Chairman and CEO of Xingji Meizu Group
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