The smart car market is expanding at an all-time high.

Among them, new car-making forces led by Tesla, NIO, Ideal and Xiaopeng have assumed the role of industry leaders. Subsequently, more and more traditional car companies have cooperated with Internet technology companies in the smart car market. Internet companies such as Alibaba, Tencent, Meituan and Didi have joined hands with traditional car companies such as SAIC, BAIC and Changan to invest in car manufacturing.

The most eye-catching is the cooperation between Baidu, the earliest company to research autonomous driving technology, and Geely Group, which has been the No. 1 Chinese passenger car salesman for four consecutive years. The two jointly invested in the establishment of Jidu Auto. In terms of resources, the two are the most luxurious pair in cross-border marriages. However, Jidu Auto, which was "born with a silver spoon in its mouth", may not have a smooth road ahead.

A model marriage of mutual exchange

As the undisputed number one in the field of Chinese Internet search, the cooperation with the sales champion of China's passenger cars is, no matter from which aspect, a "model-level" level of cooperation between Internet + car companies. The Jidu Auto jointly established by the two can fully complement each other's strengths and weaknesses. Compared with other smart car manufacturers, it is undoubtedly the company with the greatest potential for success.

First, at the software level, Baidu started developing autonomous driving technology in 2013, slightly later than Google. However, compared with the latter’s style of suspending projects at any time, Baidu’s investment in this field is obviously more persistent. In addition to investing in the research and development of autonomous driving functions, Baidu has also made in-depth layouts in areas that can further improve the upper limit of autonomous driving technology.

For example, Baidu currently has the ability to make high-precision maps. Combined with Baidu's AI capabilities developed through years of technological accumulation, it can interact with road information in real time, thereby leading its peers in achieving more advanced autonomous driving functions. This is why Jidu Auto will be able to launch models with L4 autonomous driving functions next year. Tesla, currently the leader in the smart car industry, also admitted to the media that its fully autonomous driving function is still at the L2 level.

As the hardware manufacturer of Jidu Auto, Geely Group is also very professional. As Geely Group has been in the automotive industry for more than 20 years, it has sufficient experience in physical manufacturing, which Internet companies have always lacked. The total sales of 1.32 million vehicles in 2020 shows that Geely's automobile production capacity is very strong, so Geely's production work in Jidu Auto naturally does not allow people to worry about production capacity issues.

In addition, Geely Group's self-developed SEA vast automotive architecture is built based on the idea of ​​software-defined cars. Whether it is the hardware layer, system layer or ecological layer, it has achieved unprecedented compatibility in the industry, so it performs extremely well in terms of component applicability, greatly shortening the car's R&D cycle. It is for this reason that Jidu Auto, as a new brand in the industry, dares to shout out the slogan of achieving mass production within three years.

Since Baidu and Geely are both leading companies in their respective industries, Jidu Auto has a great advantage in terms of funding compared to Weilai, Ideal and Xiaopeng in their early stages of entrepreneurship. Even compared to Xiaomi, one of the giants in the mobile phone industry, Jidu Auto's announcement of a 50 billion yuan investment commitment in 5 years also has a significant advantage, because the latter only announced that it would invest 10 billion US dollars in car manufacturing in 10 years. Such strong financial support allowed Jidu Auto to concentrate on building cars that fully represent the top technologies of Baidu and Geely in the early stages of entrepreneurship, and was not easily affected by external investors in the market.

Obviously, as the "fruit of love" between Baidu and Geely, Jidu Auto has sufficient support in software, hardware and funds. It seems that for them, it is only a matter of time to make the first excellent car.

Three challenges hidden in the bright prospects

However, just like a coin has both positive and negative sides, the cooperation between Baidu and Geely can be regarded as a perfect cross-border marriage, but under this beautiful prospect of cooperation, there are also many undercurrents of crisis, which will be the challenges that Jidu Auto must face and overcome on its development path.

For a commercial product for mass consumers, one of the issues that the company must seriously consider before launching is the product's position in the market, that is, the product's market positioning and the main consumer group it is targeting. Jidu Auto is no exception. According to the speech made by Jidu Auto CEO Xia Yiping at a media communication meeting held some time ago, Jidu Auto is positioned as a light luxury car, with the first car priced at around 200,000 yuan, mainly targeting young people.

As a newly established car company, its courage to directly impact the 200,000 yuan light luxury segment is certainly admirable. However, from the perspective of the smart car market, the market position chosen by Jidu will cause it to directly face the most intense competition in the entire smart car market in the future.

Jidu's choice of the 200,000 yuan price range as the market entry point is indeed the most in line with the current development law of the automobile market. According to relevant data, since 2016, the sales of low-end cars below 90,000 yuan have been in a state of decline. In 2019, compared with 2016, it has fallen by 50%, and the annual sales volume has slipped to about 2 million units; while the sales volume of cars within 150,000 to 250,000 yuan has gradually increased, and has now become the highest-selling price segment in the automobile market. Judging from market feedback, there is no problem with Jidu choosing the 200,000 yuan price range as the core price segment. In the future, the sales volume of cars in this price segment will continue to squeeze the living space of other price segments, and will also attract more car companies to enter this price segment.

And due to the global aging population, the size of the young customer group, which accounts for more than 65% of the car buyers, will gradually shrink, which will further trigger a chain reaction - the size of the auto market will shrink and the overall market environment will deteriorate. Therefore, it is foreseeable that the market position chosen by Jidu will lead it to face the most intense competition in the gradually declining auto market and a lower growth ceiling.

Another major challenge that Jidu Auto will face is that the general consensus in the industry is that smart cars will be deeply integrated with users' lives in the future, that is, they will form a "non-perceptual" IoT ecosystem with other users' devices. However, at present, neither Baidu nor Geely has the ability to empower the ecosystem.

Although Baidu has firmly held the top position in Chinese search in the PC Internet era, it has unexpectedly fallen behind in the mobile Internet era. Not only does the breadth and depth of its software coverage on the mobile side lag far behind Alibaba and Tencent, but it also lacks devices such as mobile phones that can establish strong connections with users. Baidu has also not yet established its own IoT ecosystem. Although Geely Group is a leader in the domestic automobile industry, as a traditional car company it is not good at software development, so it has naturally never been involved in the IoT field, which requires a very high degree of hardware and software coupling.

However, even so, Jidu Auto's choice to integrate into other manufacturers' IoT ecosystem is not a good decision, because it means that Jidu Auto's future product construction will have to revolve around the acceptance and launch of other manufacturers' IoT ecosystems, which will greatly hinder Jidu Auto's technological research and development. Therefore, Jidu can only choose to build its own IoT ecosystem from scratch, which takes a long time.

In addition, although the current cooperation between Baidu and Geely seems seamless, in fact, there are still variables in the essence of this relationship. Xia Yiping, CEO of Jidu Auto, once revealed that although Jidu was jointly established by Baidu and Geely, the company's development and product planning are dominated by Baidu. This can also be verified from Jidu's equity structure, where Baidu holds 55% of the shares.

Because of this, Jidu cannot be considered a direct brand of the Geely Group. Since Geely already owns as many as 9 direct automobile brands, it remains unknown how much resources will be allocated to Jidu in hardware research and development and production in the future. But what is certain is that Geely will most likely prefer its "9 direct sons".

At the same time, Baidu and Geely do not regard each other as their only partners in the era of "technology companies marrying traditional car companies". Baidu has publicly announced that its Apollo autonomous driving technology will always be open to other car manufacturers, and the latter has also reached cooperation with Tencent, Foxconn and other companies in the field of smart cars. Therefore, for Baidu and Geely, how to maintain a good cooperative relationship and allow Jidu to develop healthily and sustainably will actually be a big test.

As the product of the marriage between Baidu and Geely, Jidu Auto is indeed much better in technology and production than the new smart car forces that started independently. However, behind the bright development prospects, there are also hidden problems such as great pressure from competition in product niches, lack of IoT ecosystem, and uncertainties in partnerships. For Jidu Auto, how to cope with these challenges has become one of its most important issues at present.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.