"Has HiPhi failed in self-rescue? Is it really so difficult for independent brands to pursue premiumization?

After nearly six months of shutdown and self-rescue efforts, Huaren Auto (Jiangsu) Technology Co., Ltd., the parent company of HiPhi, has entered the pre-restructuring stage of bankruptcy. On August 8, the People's Court of Yancheng Economic and Technological Development Zone issued a decision to accept Huaren Auto's pre-restructuring application, with a pre-restructuring period of six months, which can be extended by three months upon application by the pre-restructuring administrator with just cause.

According to the court's decision, as of April 30, 2024, Huaren Auto's known overdue debts that have not been repaid have exceeded the company's total assets, and its assets are insufficient to repay all debts, meeting the conditions for bankruptcy. Nevertheless, the court believes that Huaren Auto's business involves new energy vehicle research and development, production, autonomous driving, cloud computing, etc., and the new energy vehicle industry has broad prospects. Pre-restructuring can help improve the efficiency of corporate restructuring, reduce restructuring costs, and better protect the legitimate rights and interests of creditors.

Since its establishment in 2017, HiPhi has focused on the high-end luxury market priced between 600,000 and 800,000 yuan. Among its three currently available models, both HiPhi Z and HiPhi X fall within this price range. However, in terms of market performance, HiPhi's sales did not exceed 5,000 units in either 2021 or 2022, with 4,237 and 4,349 units sold respectively. Small Channel believes that even if annual sales reach 5,000 units, HiPhi's annual revenue can reach 2.5 to 3.5 billion yuan, but compared to new forces in automobile manufacturing such as NIO and Xpeng, its revenue is still far behind, and it is currently still suffering from continuous losses.

On March 8, HiPhi attempted self-rescue through live streaming sales, with Engineering Project Director Yang Yueqing appearing as a live streamer. However, third-party data shows that HiPhi's last live streaming sales session was on April 23.

In May, it was reported that Huaren Auto had signed a comprehensive strategic cooperation agreement with automotive investment consulting platform iAuto in Hong Kong. The industry generally believed that iAuto's investment would become an important "lifeline" for HiPhi's self-rescue, but HiPhi has not provided a clear response to the authenticity of this cooperation.

Although independent brands pursuing premiumization are in a blue ocean, they also face the risk of niche markets, especially those positioning their million-yuan pure electric products. Such a market strategy inevitably brings significant uncertainty and risk. This applies not only to HiPhi but to all independent brands and even all brands, as this approach inevitably leads to significant market uncertainty and risk and is insufficient to support a healthy financial position for automakers. Even brands like Lixiang, which enjoy both high traffic and sales, are no exception.

In the current market environment, brand tone and image are not the most important factors; instead, having a stable source of income is crucial. For automakers, the key to survival and development lies in launching products suitable for the mass market that meet the diverse needs of consumers. Only by surviving can they have the opportunity to pursue a more premium development path in the future.

Source: Lei Technology