The move may be NIO's preparation for the supply of key components for its mass-market-oriented sub-brand.
(Image credit: Hisense)
NIO has signed an agreement with a local home appliance giant that owns auto parts businesses, potentially paving the way for parts supply for its mass-market-oriented sub-brand it will launch.
NIO signed a strategic cooperation agreement on September 13 with Hisense Group, a major Chinese multinational home appliance and electronics manufacturer headquartered in Qingdao, Shandong province, according to a press release from the latter today.
The two will cooperate in areas related to new energy vehicles (NEVs), including automotive air conditioning, thermal management systems, intelligent transportation, vehicle-road coordination, new display and multimedia technology products.
In addition to the field of NEVs, the cooperation between the two will also involve the expansion of overseas markets and the procurement of home appliances, according to Hisense.
Hisense executives, including president Jia Shaoqian, as well as NIO co-founder and president Qin Lihong and NIO senior vice president of strategic new business Ai Tiecheng, attended the signing ceremony.
NIO will first work with Hisense's automotive air conditioner arm Sanden Corporation, according to a press release from the home appliance giant, which did not disclose further details.
Notably, on July 30 last year, local media outlet 36kr reported that Ai, the former general manager of WeWork Greater China, had joined NIO to take charge of the company's mass-market-oriented sub-brand.
Ai takes on the role of vice president of strategic new business, reporting directly to NIO CEO William Li, the report said, citing sources familiar with the matter, adding that the new business Ai is in charge of at NIO is its sub-brand.
The so-called sub-brand is a mid- to low-end brand independent of NIO and expected to be priced in the RMB 150,000 ($23,200) - RMB 250,000 market, the report said.
Ai's presence at the signing ceremony may mean that NIO is preparing for the supply of key components for the sub-brand.
Back to Hisense, on May 31 last year, the company announced that it had become the controlling shareholder of Japan-based Sanden by acquiring a 75 percent voting stake in the company for about RMB 1.3 billion, a move that allowed it to enter the automotive air conditioning sector.
Founded in 1943, Sanden is a leading global Tier 1 supplier of automotive air conditioning compressors and automotive air conditioning systems, with plants in North America, Asia and Europe.
As of 2019, Sanden's share of the global automotive air conditioning market was 21 percent, second only to Japan's Denso Corporation, which ranked first with a 35 percent share. However, Sanden's operations have suffered a crisis due to the impact of the Covid outbreak.
NIO will also expand in-depth cooperation with Hisense in the fields of smart city, smart community, smart home, display, big data, artificial intelligence and autonomous driving, the latter's press release said today.
After 53 years of development, Hisense's business now covers a wide range of fields, including multimedia, home appliances, IT intelligent information systems and modern service industries, its press release mentioned.
Hisense is transforming from a traditional home appliance company to a high-tech company with 23 R&D facilities, 29 industrial parks and production bases worldwide and products sold in more than 160 countries and regions, it said.
Hisense has three listed companies, listed in Shanghai, Shenzhen, Hong Kong and Tokyo. NIO has also completed listings in the US, Hong Kong and Singapore, and will seek an A-share listing in the future, the home appliance giant's press release mentioned.
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