Author | Chai Xuchen

Three months ago, the explosion of the new M7 in Qinjie stirred up the entire 250,000 yuan market. So far, the order volume has exceeded 100,000 units. It marks the complete encirclement of Huawei's smart car selection and has become a phenomenal event. However, as a result, Cyrus, which has always been “inside”, was pushed into the spotlight by public opinion, and its stock price doubled.

Next, how to handle this rapid influx of orders and deliver them has become a key challenge.

Recently, during a visit to the Celis factory, the factory manager told Wall Street News that when the new M7 was released in early September, the factory had produced about 5,000 units in the same month after receiving the order, and the October data had already doubled to over 10,000. According to the latest commitment of Yu Chengdong, chairman of Huawei Automobile BU, the delivery volume of the new M7 will reach 23,000 units in December, and the monthly delivery capacity will rise to 30,000 units starting next year.

Delivery volume has doubled from “ten thousand to ten thousand”. This kind of increase in production capacity is called “vertical increase” within Cyrus. The key point is the rapid flow of the supply chain system.

The head of the Celis plant said that the overall production capacity of the factory is a system capability, and the capacity of the production line cannot be viewed alone. “From the top end of the supply chain, everyone has to get involved”.

The person in charge confessed that initially it was not anticipated that the volume of M7 would be this large. However, in order to solve the production capacity problem, “two or three months ago, Celis cooperated with suppliers to lay out ahead of schedule. In order to prevent problems in the supply chain, we and our suppliers also laid out core components.”

According to information, after the launch of the new M7, Cyrus and Huawei worked in shifts in the front-end supply chain and back-end production line in order to ensure delivery. At the same time, some core suppliers have already built factories near the Celis factory, and Celis's supply chain, product, and quality teams have directly entered the supply chain enterprise.

In addition to preliminary preparations, during the live broadcast of the Cyrus factory in October, Yu Chengdong revealed that he has invested another 1 billion yuan in the entire supply chain. The person in charge of the factory said that this part of the investment mainly includes improving the pace, process, and results of production.

Under such upstream and downstream systems, the delivery volume of the new M7 exceeded 10,000 in the second month, exceeding the 2-3 months normally required by traditional enterprises. The person in charge of the plant said, “The order growth at this stage is manageable, and in the future, it can also be adjusted dynamically according to order volume.”

With the release of production capacity, the new M7 product alone will support the monthly delivery volume of 20,000 to 30,000 units, followed by Wang Jue's flagship M9. Sales volume in the world may soon surpass Xiaopeng, NIO, etc., and directly follow ideals and Aian.

Therefore, in addition to Huawei building momentum in front of the stage, both sides under stage are also speeding up their deployment in terms of guaranteeing manufacturing power.

Currently, Celis has set up three smart automotive factories in Chongqing, namely the Liangjiang factory for M5 production, the Phoenix plant for M7, and the new Liangjiang plant for M9 production. The annual design capacity is 150,000, 150,000, and 700,000 vehicles, respectively, which makes the inquiry industry have a production capacity of about one million vehicles.

Looking back on the past, the factory manager said that as early as 2020, Celis and Huawei had already begun cooperation. In the early stages of production, Huawei brought in the entire product integration and quality management system team, and the two sides discussed the ideas, mechanisms, and methods of managing the entire process together.

Since then, it has iterated on intelligence, digital applications, and automated quality control. AI vision technology was introduced on the original basis, and automated control was also added to the hardware section. This is reflected in the efficiency of control of processes and results.

The person in charge pointed out that an average of 30-50 bolts have to be hit on the chassis of an ordinary car, but manual work inevitably makes mistakes and cannot reach the high level of automation in the welding workshop. Therefore, after using AI vision technology, the camera will take pictures and compare them based on cloud data. Errors will be immediately indicated, and assembly processes and processes will also be strictly monitored.

In addition, Huawei and Cyrus have also begun experimenting with integrating manufacturing methods and processes for some industrial products into the automotive industry.

The head of the Celis factory said that the traditional car ran two to three kilometers after going offline and was completed after some basic routine testing. However, more than 400 tests need to be carried out on the Cyrus production line, and after completion, all data will be synchronized to the cloud for investigation and judgment. Thus, at the pre-delivery stage, it is possible to identify at least 5% of the problems that may occur after many years of use by users and avoid them.

According to our understanding, under the catalytic cooperation between the two sides, this kind of intelligent and automated production capacity has already been transferred and expanded during Cyrus's other smart factory construction processes. However, it's not too expensive to overtake a car on a corner like this.

“The traditional manufacturing industry won't do it this way; the cost is too high.” The person in charge of the factory revealed, “Our long-term technology investment accounts for 10% of revenue, and the regular 2-3% is very high. Although we don't earn back that much money, we have invested all our money in the place where it should be invested.”

Perhaps in Celis' opinion, this is all digging deep into a moat. However, the verification process is also a long-term approach.

After experiencing fluctuations in sales in the first half of the year, can the subsequent M9 and future new products continue to be popular, and production soars? All of these still require answers from the market.

On November 25, Huawei independently spun off Auto BU to establish a new company with multiple shares. Cyrus also received an invitation, which is expected to further bind and cooperate with Huawei.

That night, Cyrus issued an announcement indicating that the long-term strategic partnership between the two sides has not been affected by any faltering influence, and that its parts supply relationship to Cyrus will remain the same. At the same time, Celis also said that it is actively demonstrating the investment and cooperation invitation of Huawei internally.

As the biggest beneficiary of Huawei's automotive business, Cyrus will probably be willing to tie in more closely with Huawei. After all, the fast car that got on Huawei completely turned from a small manufacturer that once made springs and vans, and leapt into the seat of a core player in smart electric vehicles in China. Its popularity and exposure have increased as never before.

Cyrus and Huawei have prepared ahead of time in order to continue to be successful in the future.