Lenovo resists temptation as group of Chinese firms jump on car-making bandwagon
At a time when a large number of Chinese technology companies jumped on the car-making bandwagon, Huawei recently made it clear that it will not build cars. Now Lenovo in the face of this issue also said that the company will not do so, and it is more determined than Huawei.
Lenovo is determined not to build cars and will put limited resources and energy on the track that has been clearly defined, that is, focusing on intelligent transformation, Lenovo Chairman and CEO Yang Yuanqing said on May 27.
"Previously the company was committed to turn Motorola into profitability and successfully diversify Lenovo, and today it is gratifying that we did," Yang said, adding that although Lenovo does not build cars, many new car companies are Lenovo customers.
In fact, Lenovo has recognized the great promise contained in the automotive sector. At the Summer Summit of Yabuli China Entrepreneurs Forum held in the third quarter of last year, Yang said that smart cars will become a big trend, and they will certainly compete fiercely with traditional cars. But at that time he said Lenovo will not enter the field.
"We will not open more than one battlefield at the same time. Otherwise, we will be at the beginning phase of each field, which will lead to too much risk, " Yang said last year.
Focus is still important, Lenovo likes to develop deeply in one industry, rather than laying many industries at the same time, Yang said.
Lenovo executive vice president and president of China Liu Jun recently said in an internal letter that, the company's market share in China's PC sector has been setting new records for three consecutive years.
Lenovo announced on May 27 the results of the past fiscal year, showing it achieved revenues of $60.742 billion, up 20 percent year-on-year. Its gross profit stood at $9.768 billion, an increase of 17 percent year on year.
In the first quarter of 2021, Lenovo achieved revenues of $15.63 billion, up 48 percent year-on-year, and gross profit of $2.688 billion, up 44 percent year-on-year.
In current China, powerful technology companies all seem to want to start making cars.
On January 11, Baidu announced the formation of an electric car company with Geely Automobile to enter the auto industry as a full vehicle manufacturer.
At the end of March, Xiaomi Group announced its entry into the car-making field, with Lei Jun as its car company CEO and an initial investment of 10 billion yuan.
On April 6, LatePost cited multiple independent sources as saying that Chinese car-sharing giant Didi Chuxing has launched a car-making project headed by Didi Vice President Yang Jun, who is also the chief product officer of Didi's D1, a custom car jointly released with BYD.
On April 9, media reported that Xiaomi eco-chain company Roborock has started its car-making project, with its founder and CEO Chang Jing at the helm.
The "Warring States Era" of China's smart car industry is set to begin in 2021 with the entry of a large number of tech giants, according to a report released by China Industrial Secs on April 5.
After China's new energy vehicle industry experienced the "first year of development" in 2014 and the "first year of delivery" in 2018, and the entry of these technology companies, the Chinese industry's "era of warring states" starts, the report says.
At present, the penetration rate of China's intelligent networked vehicles is still low, and the future sales and ownership of new energy vehicles still have greater room for improvement, the report said.