2003: Starting with Foreign Trade

Chapter 759 The Strong Are Overpowered

In 2011, the total sales volume of automobiles in China was 1850.5 million vehicles, only 50 more than in 2010.

Overall market sales remain very impressive, at over 1800 million vehicles.

But the most frightening thing is the lack of growth rate. With sales of some models rising, the lack of growth rate means that some car companies will not be able to survive.

"Hey, I'm about to starve. You're still living the good life, bro."

Hangcheng.

Ying Jianren, who was attending the Zhejiang Provincial Entrepreneurs' Gala, sat next to Tan Jincheng, and the two were talking quietly.

"How many vehicles did your company sell in 11?"

Looking at Ying Jianren, whose eyes were full of worry, Tan Jincheng couldn't help but ask curiously.

At this year's Shanghai Auto Show, Zhongtai went on a rampage, launching seven or eight new models in one go. Combined with its existing older models, the small Zhongtai now has no fewer than 15 models.

Perhaps Mr. Ying also noticed that with so many car models and such a mess of names, he renamed all of his models this year.

They are named with prefixes M, Z, T, E, and ZR respectively. M is for MPV, Z is for sedan, T is for SUV, E is for new energy series, and ZR is for sports car. The suffixes range from 100 to 800 to represent the corresponding vehicle platform.

If you add HB, then it's a hatchback model. This systematic and comprehensive naming method shows that Mr. Ying's ambition is really big; he wants to make the whole series.

However, it must be said that for the Zhongtai brand, which has been established for six years, Boss Ying was really good to him during this period, and he was also genuinely involved in car manufacturing.

Compared to Chery and Dizi, which directly copy other brands, Boss Ying, although he also has his shameless behaviors, at least in the past six years, all the models he has built have been legitimately purchased and have not involved any infringement.

The automotive industry jokingly calls him the "King of Acquisitions," which is somewhat mocking, because he bought a bunch of messy assets, but almost all of them were outdated technologies that were of no use to the company's development.

He got ripped off by Fiat for his MPV. He bought an Alto, a car that nobody would want even if given away, and he also scavenged up other discontinued models from Fiat.

Lao Ying knew that everyone was laughing at him, but because of Saab this year, many domestic car companies were ridiculed, which comforted Lao Ying a lot.

In 2011, Saab practically played the domestic car companies like a dog walker, managing to outmaneuver five or six car companies, including BAIC.

Ying Jianren was somewhat envious of Tan Jincheng. Why were his acquisitions always so smooth? He wondered how the kid negotiated.

Tan Jincheng's negotiation strategy was simple: foreigners didn't have any special preferences with him. He was willing to pay more for advanced technology and even try to please them, but he would rather not accept outdated technology.

As for manipulative negotiations, they simply won't talk to you anymore. As long as you don't have a biased view of foreigners, you won't be fooled.

"We're preparing to report 12.5 vehicles. What about you?"

Well, now that you put it that way, Tan Jincheng understands. Actually, these figures are quite good. A car company with annual sales of 100,000 vehicles is already quite impressive. However, when spread across more than a dozen models, it becomes rather dismal.

On average, the annual sales of each model are indeed dismal, especially considering that traditional dealership models require inventory.

"Overall, we sold about 21.8 vehicles, but the new energy vehicles have not yet been delivered, so they are not included in this year's sales."

The Yuechi A1 will be replaced next year, so there are still relatively large discounts, especially in the last few months of the year. With 16.92 Yuechi A1s sold throughout the year, that's an average of 1.41 units sold per month.

Compared to last year, the Yuechi A1 saw an overall increase of 16.21%, but this figure is still far lower than that of the SUV market, which sold exceptionally well this year, with 159.37 million units sold throughout the year, representing an overall increase of 20.19%.

The top five best-selling models accounted for 42% of the SUV market share, with the Yuechi A1 and Honda CR-V alone accounting for more than 20% of the market share.

Although it did not keep up with the average growth rate of SUVs, the Yuechi A1, with a market share of 10.62%, continues to rank first in the SUV market this year, surpassing the Honda CR-V by a total of 9600 units, following last year's lead.

Tan Jincheng is quite satisfied with this. Although it did not keep up with the overall growth rate of the SUV market, a single model achieving a market share of over 10% is a very, very successful achievement.

If they can maintain this market share year after year, Weilai can focus on the SUV market.

In addition, pickup truck sales have also performed well this year, with the new model and the Yangzi pickup truck, which was originally named Qilin, selling a total of 39.43 units, representing an overall increase of 4.3%.

Great Wall remains the undisputed king, with a market share of 30.9% and sales exceeding 12 units, making it the absolute leader in the pickup truck market.

With its new design and new driving experience, the new pickup truck named after the Qilin (a mythical creature) has attracted the attention of pickup truck enthusiasts since its launch in April.

Including its existing models, Yangzi Pickup sold 4.2 units this year, ranking fourth in pickup truck sales, and its market share also rose to 10.65%. Relying solely on these two models, Weilai is doing very well in the 'niche' market.

"Damn, the Yuechi A1 alone sells more than us. We really should have stuck to our SUV strategy back then."

Ying Jianren was filled with envy. Compared to Zhongtai, which was mired in the sedan and MPV markets, Weilai was making a name for itself in the SUV market with its limited resources.

"Haha, who told you to be so greedy, wanting to eat everything? But it's not too late now, since you've already poached Xia Bing."

Speaking of which, Zhongtai was actually one of the earliest car companies to develop SUV models. The Zhongtai 2008 was incredibly successful back then. It's a pity they didn't stick with this path. If they had continued to develop mid-to-high-end models and focused on SUVs, perhaps they could have truly carved out a different path.

There are various strategies for doing business, but the worst thing is to do things haphazardly. After 2008 sold well, Zhongtai developed a larger version, 5008, and then stopped developing that version.

The market has clearly taken off, I don't know what they were thinking.

"Hehe, I hope Mr. Xia can bring us something different. Let me make it clear first, our first mid-size SUV is already under development, and we'll be competing with you guys when it comes out."

The news of Xia Bing, a heavyweight figure who left Dizi, joining Zhongtai has not been officially announced, but it is already known within the automotive industry. For the automotive industry, Xia Bing's joining is definitely an earthquake.

Boss Ying is trying to make one last effort to create some buzz; the lukewarm reception of Zhongtai is clearly not what he wants.

Starting with Xia Bing, the once relatively normal Zhongtai became increasingly abstract. After Xia Bing joined, Zhongtai's design department was dubbed the "measuring tape department."

Xia Bing, who has already joined the company, brought the first design to Zhongtai, which is also Zhongtai's first mid-size SUV, internally named T600.

How to describe this car? From the front, it looks like a Volkswagen Touareg; from the side, it looks like an Audi Q5; and the interior has a bit of a Mercedes-Benz feel to it. In short, it's just taking advantage of the increasingly popular German brands.

In terms of pricing, Ying Jianren referenced the Yuechi A1 and the BYD S6, which had a booming sales volume in the second half of this year, and planned to price it in the range of 8.68 yuan to 14.68 yuan.

Cheap SUVs are no longer in demand, but domestically produced SUVs in the 10 to 20 yuan price range are selling very well.

"Haha, welcome to the competition, but even if you're fast, you still won't be able to launch until 2013. By then, you'll be facing our second-generation upgraded product."

What's most impressive about Zhongtai is how quickly it has been able to launch new car models; its speed is almost on par with the development of new energy vehicles in later generations.

A whole bunch of new car models came up in a flash. Damn, even clothing styles weren't updated this fast a few years ago. But no matter how fast they are, this is the first time they've developed a mid-size SUV, so even if they're just copying, it will still take some time.

"It should be around 2013 when it goes public. We still need to take some time to settle things in 2012. Sigh, let's hope we can pull through."

If there is a blockbuster model, like the Zhongtai 2008 when it was first established, even if only 20,000 or 30,000 units are sold in a year, Zhongtai can still ensure revenue balance.

However, among the many models currently available, none can be considered a blockbuster. With the numbers being too evenly distributed, the production line cannot be easily shut down in order to maintain sales volume, which has led to Zhongtai's continuous losses.

If it weren't for having a listed financing platform and a decent auto parts business, Zhongtai probably wouldn't have survived.

The reason Xia Bing was recruited was because Zhongtai urgently needed a blockbuster model. Just look at Wei Lai to see how important a blockbuster model is to a company.

Zhongtai, which was established earlier than Weilai, didn't have the money to set up an automotive research institute.

"But speaking of official announcements, could your design director please wait a bit? Let's not rush into it together, give our brother some buzz."

Chris Thomas also joined the company this year, but he is still in Germany. Wei has already arranged a grand welcome ceremony for him here.

"Are you planning to make an official announcement before the New Year? If so, then let's wait until after the New Year. Chris is planning to come over after the Spring Festival."

There aren't many secrets in this circle. Wei Lai's contact with Chris has been going on for quite some time, so it's not news anymore. It's just that at first, no one thought Wei Lai could succeed.

The same applies to Xia Bing; Ying Jianren's contact with him couldn't be hidden from others either.

In retrospect, Ying Jianren was lucky. If Dizi hadn't run into trouble and needed someone to take the blame, he might not have been able to poach Xia Bing, especially since the two of them had been in contact for a long time.

Just like Lei Jun poaching Lu Xun, he had no chance at all before Gionee ran into problems, but he spent four or five years trying to poach Lu Xun.

"Okay, then I'll make an official announcement before the new year; by the way, how many Aion S have you ordered? When can they be delivered next year?"

When it comes to developing new energy vehicles, Zhongtai is indeed a veteran among domestic car companies. It was among the first batch to obtain a new energy vehicle license and was included in the catalog at the same time as Dizi. The 2008EV was even launched in a small batch in Hangzhou this year.

Speaking of the sales of new energy vehicles these days, it's a long story. According to data from the China Passenger Car Association, only 8159 new energy vehicles were purchased by individual users, of which 5579 were pure electric vehicles.

Wei Lai, the distributor of Tesla sports cars, sold fewer than 300 units in total. In China, the Tesla was priced at 129.9 million yuan, approximately 200,000 US dollars. It was very expensive, but selling an average of over 20 cars a month far exceeded Wei Lai's and Tesla's expectations. Tesla's global sales in 2011 exceeded 1000 vehicles, with nearly 30% coming from China.

Moreover, this price is really not cheap, 130 million yuan. Even after deducting subsidies and various preferential policies, it actually costs more than 100 million yuan.

Musk really didn't expect his sports car to be so popular in China, selling two or three hundred units at such an expensive price.

Spending over a million yuan to buy an electric toy—the world of the wealthy is beyond the comprehension of ordinary people.

"We have orders of various sizes, totaling several thousand vehicles. They will be delivered in batches next year, with the earliest batch expected to be delivered around May."

Historically, new car launches have always preferred to take place in April, after the first quarter ends, or around the time of the Guangzhou Auto Show, all to capitalize on the popularity of the auto show. Weilai's new car is no exception.

Weilai has secured orders in several regions, including Ningbo, Zhoushan, Yicheng, Luzhou, and parts of Tianjin Xiangcheng. In addition, they have also secured orders for 300 vehicles in Zhang Yong's hometown, for a total of 5200 vehicles.

The 2000 vehicles in Ningbo and the 1200 vehicles in Luzhou account for the majority of the Aion S orders.

In addition, more than 200 ES6 buses have been ordered. As for Huanghai buses, the data is also very good. Including their own commuter buses, Huanghai has a total of 535 orders for pure electric buses.

Interestingly, more Aion S hybrids were purchased, while more ES6 orders were for pure electric models.

New Year's Day has passed, but the Spring Festival has not yet arrived, so Tan Jincheng still habitually considers it to be 2011.

Starting at the end of April, the Aion S and ES6 will officially enter the delivery period. Unlike the Aion S, the ES6 is more often purchased by individual consumers.

New energy vehicles are a niche market, but they still have many enthusiasts, especially those who have experienced Tesla sports cars.

In addition, the ES6 has a very stylish design and good performance. If you were to ask which cars were the most popular among new energy vehicle enthusiasts in 2012, that would be a good starting point.

That must be the ES6, BYD Qin, and Maodou S. The Maodou S is expected to be launched in the second half of 2012. Based on the popularity of sports cars in China, Mr. Ma is considering building his own exclusive dealerships in China.

The all-new BYD Qin has already begun its pre-launch campaign and will be a highlight of this year's Beijing Auto Show. This hybrid vehicle, designed entirely in-house by BYD, has garnered significant market attention.

"Exactly several thousand vehicles?"

Tan Jincheng's ambiguous mention of several thousand vehicles made Ying Jianren somewhat unhappy. However, the Zhongtai M300 pure electric model has already been officially put into operation in Hangzhou this year, becoming the first batch of electric taxis in Hangzhou.

Zhejiang Province currently has three private car companies with independent brands. In terms of establishment time, Weilai is the shortest, and in terms of scale, Weilai is also the smallest.

However, if we really talk about overall strength, his Zhongtai should be the worst. In the small province of Zhejiang, the competition for resources among the three major independent brands is fierce.

In terms of market competition, the province doesn't interfere, but in terms of resources, it's a three-way competition. Whoever gets better resources will have better development opportunities. However, everyone has generally agreed on a regional division.

Of the 11 cities in Zhejiang Province, Weilai takes Ningbo, Zhoushan, and Jiaxing as its development bases. As for Zotye, it is more focused on the central and western regions, while Mr. Li's base is currently in southeastern Zhejiang.

In Hangzhou, it depends on everyone's ability; whoever sells the most cars will receive more resources.

For Zhejiang Province, this can be considered a happy problem.

Despite Zhongtai only selling a little over 10 vehicles a year and its automotive business still operating at a loss, this car company would be a major player if it moved to a province with a less developed automotive industry.

In terms of gasoline-powered vehicles, Zhongtai lags behind in the province's competition, but in terms of new energy vehicles, they are currently pioneers.

After a moment's thought, Tan Jincheng told the truth: "More than 5000 vehicles, mainly because the Ningbo City Government and the Luzhou City Government gave us face."

Anyway, deliveries will begin in a few months, and Weilai will announce the specific quantities then. The contracts will all be signed, so there's no need to worry about losing orders.

Wow! Quite a few. You've talked about quite a few cities, haven't you?

Good job, lad! Your business skills are really impressive. You managed to sell over 5000 vehicles. And your network is amazing. So far, Zhongtai has only sold to Hangzhou and the ham market.

If we continue like this, we won't have any of the province's resources left in the future.

"It's alright. It's still in the promotion stage. A few thousand vehicles isn't very significant. You guys also got the taxi operation rights in Hangzhou, didn't you?"

Throughout 2011, Zhongtai invested a considerable amount in new energy vehicles. Lao Ying was a visionary with a broad perspective. In addition to operating a taxi business, they also opened a new energy vehicle rental company in Xiamen.

This is the first pure electric vehicle leasing company in China. In addition, the 5008EV was also showcased at the Zhejiang Investment and Trade Fair, with the aim of exporting.

During that year, Ying Jianren participated in a large number of government activities. He even brought the chairman of JAC Motors to visit Zhongtai. In addition, he also had a good relationship with the China Passenger Car Association. He was doing very well in his dealings with higher-ups.

Having known him for a long time, Tan Jincheng always felt that Boss Ying was a contradiction. He seemed to be willing to invest in the company and seemed to want to make good cars, but when he didn't want to play anymore, he was also very decisive.

Before 2012, Zhongtai acquired numerous car models through acquisitions. You could say he was picking up scraps, but you couldn't call it plagiarism.

After Xia Bing joined the company in 2012, she didn't stay for long. Factions were rampant within Zhongtai, and Xia Bing was quickly squeezed out. However, it was during this period that Zhongtai seemed to have completely absorbed Xia Bing's "borrowing" approach.

From then on, Zhongtai embarked on a path of endless replication, and its models in the early years were just like those of Dizi in its early days, pieced together from various sources.

Until the arrival of the Porsche Tai, this car was almost a pixel-perfect replica, which created a famous scene at the Shanghai Auto Show that year.

It seems that after Baoshitai went public, Zhongtai began to go public by using its own parent company's shell. That was in 2017. It all seemed like a scheme that had been in the works for four or five years.

Tan Jincheng glanced at Ying Jianren beside him.

Perhaps, Mr. Ying has already started making plans from this moment on?

If things don't work out, then they'll just make a quick buck and run away. It's a shame that Zhongtai has invested so much in new energy. Or maybe it's just that Boss Ying was born at the wrong time. If he had been a few years later, he might have been able to catch the wave of the new energy vehicle boom.

"We could set up our own car rental company and rent cars to drivers who can't afford to buy one right now, so they can drive for ride-hailing services. What do you think?"

After the meeting ended, Tan Jincheng immediately found Chen Weixin, who had also attended the party, but he and Tan Jincheng did not sit together.

The two were at the hotel provided by the conference organizers, discussing financing and the future of Kuaidi Dache (a ride-hailing service).

This was an idea that Tan Jincheng had just gotten from Ying Jianren. In addition to increasing the number of part-time drivers, it would also benefit his own new energy vehicles.

Promoting new energy vehicles through leasing, coupled with the increasing number of electric taxis in some cities, can accelerate the popularization of new energy vehicles.

For Kuaidi, this is also an advantage, as renting is definitely cheaper than buying, and it can increase the number of drivers in a short period of time.

"That's a good idea, but which city should we start in?"

Chen Weixin has reached an agreement with Tan Jincheng, in which Tan Jincheng will invest US$300 million to acquire a 20% stake in Kuaidi Venture Capital. In addition, Tan Jincheng will have priority investment rights in the Series A investment stage.

The app was developed by a team assembled by Chen Weixin. Tan Jincheng, who developed the passenger version, provided some suggestions on software development. As for how to develop the driver version, that would be up to their team.

"Hangzhou is fine, but I think it's best to start with Shanghai. Big cities are more accepting of taxis. Ningbo is definitely not an option, as many people still take the bus."

The capital city is also an option, but Shanghai is relatively more suitable for initial promotion.

"In addition, there must be a strict screening process for drivers. Only those who pass the system screening can officially accept orders. In the early stages, it is best to choose professional taxi drivers."

Tan Jincheng was fully aware of all the things Didi had done. In many cases, this was due to the platform's indulgence. In order to increase the number of orders, a dominant platform would resort to any means necessary, which undoubtedly challenged the bottom line of society.

Tan Jincheng is certainly not a good person, but he certainly wouldn't allow such blatantly permissive behavior to occur in the companies he invests in.

"Of course, I had a bad experience with taking a taxi, which gave me the idea to make my own software."

Chen Weixin agreed with this point: "However, there are still a few things that require Mr. Tan's help."

"Tell me, in which areas, as a shareholder, I will definitely help."

"Firstly, regarding the map, I think Mr. Tan should be able to handle that, right? Also, it would be even more convenient if we could cooperate with those travel websites, as we could quickly go online using their systems."

"The map is fine, I can help you contact Gaode. As for the travel websites you mentioned, that's fine too. I know people at Qunar and Ctrip, I can help you get in touch with them."

Negotiations with Gaode are underway. After reducing his shareholding, Cheng Wu's attitude has softened considerably. According to Huang Ming, we can acquire up to 28% of the shares, increasing our shareholding to 38%.

"But none of that is the main point, is it?"

Chen Weixin laughed and said, "Of course, payment is a key factor in solving the taxi problem."

The ride-hailing war, on the surface, is a battle for the ride-hailing market, but behind it is actually a contest in the payment field. Today, Chen Weixin invited Tan Jincheng to discuss payment-related issues.

(End of this chapter)