Huawei Founder: Company Is Like BMW

Apr 1, 2014

Huawei Founder: Company Is Like BMW

JURO OSAWA

When people hear about China’s Huawei Technologies, German car maker BMWBMW.XE +1.38% probably never comes to mind.

But according to Ren Zhengfei, Huawei’s founder and chief executive, there are similarities between the two companies.

In Huawei’s latest annual report released this week, Ren says the Chinese telecommunications equipment maker’s challenges are similar to those of BMW as the luxury car maker takes on nimble new competitors like Tesla MotorsTSLA +3.93%.

“Can BMW match Tesla’s pace? This has been an issue of debate for some time at Huawei,” says Ren. “Most believe that Tesla vehicles represent a disruptive innovation and will surpass BMWs. I think that BMW may not lose the game if they take an open approach to improve themselves.”

He even has a piece of advice: “BMW needs success, not a narrow sense of pride that everything has to come through its own innovation.”

“Huawei is like BMW, in that we are also a big company. We live in an information society that is fast-changing with lots of disruptive innovations,” Ren says. “Can we continue to survive? Admit it or not, this is a question right in front of us.”

In a statement, BMW said it respects Ren’s achievements.

“For companies with extensive heritage, innovation and sustainable development has always been the key driving force behind their success through the change of eras,” said Karsten Engel, chief executive of BMW’s China operations, in the statement.

As Ren rarely makes public appearances, the annual report represents one of few occasions in which he shares his views on Huawei and the industry. Ren founded Huawei in 1987 as a telecom gear sales agent and the Shenzhen-based company soon started making its own products.  Over the past decade, Huawei has rapidly expanded outside China to became the world’s second-largest telecom equipment supplier only behind Sweden’s Ericsson.

While there may be similarities between the challenges facing Huawei and BMW, the Chinese company is also coping with more unique problems, especially in the U.S. In 2012, a U.S. congressional report recommended that U.S. telecom carriers avoid using Huawei’s equipment, saying that the Chinese company’s gear could be used by Beijing to spy on Americans. Although Huawei has repeatedly denied such allegations, the company has been effectively shut out of the U.S. telecom-equipment market.

Even so, Ren portrays the U.S. in a positive light in his message.

“We must be conscious of the power of the United States. They have advanced systems, flexible mechanisms, clear property rights, and respect and protection of individual rights,” Ren says, adding that those qualities have helped the U.S attract the world’s best talent. “The light that never goes out in the Silicon Valley continues to shine.”

Ren also gives Tesla a shout-out: “The U.S. is not lagging behind; it is still a model for us to learn from. Isn’t Tesla a good example?”