2003: Starting with Foreign Trade

Chapter 806 Adds Fuel to Sales
7: 1.

Late on the night of July 8, the German and Brazilian teams put on a spectacular show for the fans, giving the host country a harsh lesson.

Hey, this is also one of the bugs of reborn characters.

After all, no one really believed that anyone could beat Brazil by seven points before this match.

The World Cup isn't the only thing going crazy; the ride-hailing market is too. By the end of June, the two companies, Kuaiche and Didi, had burned through a combined 24 billion yuan.

In less than six months, they burned through more than 20 billion yuan. And these are just the two companies. Bumblebee, which has a large market share, has also burned through a lot of money. Other companies with smaller market shares have also burned through some money.

Behind the BAT's crazy cash burning is the fact that, to date, the ride-hailing market share is held by three companies: Express, Didi, and Dahuangfeng, accounting for 98% of the market.

Bumblebee, which is on the verge of collapse, is already planning to sell the company.

The founder of Bumblebee has already contacted Chen Weixin and Chen Wei respectively. Chen Wei has a strong desire to acquire Bumblebee. If Didi can capture Bumblebee's market share, it will be able to surpass Express to become the number one ride-hailing app in the market.

The express car company also intends to acquire Bumblebee. Regardless of who is the number one or two, acquiring the number three will basically create a monopoly.

Since the subsidy war began, quick-thinking taxi drivers have truly ushered in a golden age. The first generation of subsidies was only for passengers, but after entering the subsidy 2.0 war, subsidies have also covered drivers.

Honest drivers and those who work part-time as ride-hailing drivers can supplement their household income by taking a lot of orders. The more orders they take, the more subsidies they receive, and naturally, they earn a considerable amount.

In addition, some people who collude with passengers to take advantage of loopholes earn even more. It's not that express car services, Didi, or even Tencent's Ali are unaware of this, but they all turn a blind eye for the sake of the market.

For anything that isn't too outrageous, they'll at most just ban the account.

Luzhou.

"Mr. Tan, it's been a long time."

Chen Weixin arrived swiftly, and after joining Tencent, the express train had money and resources, and its market share rose rapidly. This time, the express train was like Didi in its previous life. Tencent's approach to investment and operation was indeed much better than Ali's.

When they provide full support, the speed of expansion is unimaginable, with traffic steadily increasing, unlike the bloodsucking support of Ali.

Currently, the market share of express car services is approaching 50%, while Didi's market share has been compressed to around 35%. There is a significant gap between the two in terms of market share, which is mainly due to the escalation of the subsidy war.

"Mr. Chen looks great lately."

"Haha, Mr. Tan, please don't tease me. I don't look as radiant as you do."

Although Mr. Tan's stake in Kuaidi has decreased to 8%, Chen Weixin dares not get arrogant in front of him. Tencent has contributed the most to the success of Kuaidi APP, but it was ultimately created based on Mr. Tan's ideas.

From the concept of the app to the strategic cooperation with Gaode Maps, to the provision of 1000 Aion S vehicles and the introductions from Tencent and Xiaomi, Tan Jincheng's figure can be seen in the battle of the express train, but his shadow is everywhere.

Even the current market size seems to be as he predicted. Didi, which was initially supported by Alipay, will be very strong, but once Tencent officially makes its move, it will definitely block Didi's entry into Tencent's products.

Mr. Tan had foreseen all of this when Tencent was first introduced.

"How did the talks with Bumblebee go?"

The 1000 customized vehicles for Express were ready for delivery, and Chen Weixin wanted to hold a handover ceremony. He also wanted to take advantage of Wei Lai's current popularity to promote Express, so he invited him to attend.

Tan Jincheng thought about it and agreed, which was a win-win situation for both companies.

The Luzhou factory is delivering ES6s. The rows of ES6s look quite impressive, a total of 500 vehicles. ES6 sales are going to explode this month, and these 500 vehicles can all be counted in July's sales figures.

July isn't over yet, but the new energy vehicle market, which has been suppressed for half a year, is already showing signs of explosive growth. Not only are companies like Wynn, BYD, and Chery experiencing rapid growth in new energy vehicle sales.

This information was obtained through offline channels and internal company channels.

Any legitimate electric vehicle has been very popular in the market since the beginning of July, with the most well-known being the Aion S, ES6, Qin, and Tesla Model S.

More and more people are going to the store for consultations and placing orders.

"There's not much of a chance for now. Bumblebee wants to keep trying and also wants to raise the price. It will probably take some time."

The Bumblebee, which still has about 10% market share, is indeed considering a sale. The so-called struggle is nothing more than waiting for a higher price, which everyone knows. Baidu is still Baidu.

Internet acquisitions are always very fast. The time Chen Weixin mentioned is probably only a few months. If nothing unexpected happens, it should be completed within this year, otherwise they won't be able to sell it.

That's the amazing thing about the internet: it develops incredibly fast, but it can also become worthless just as quickly.

Both Kuaiche and Didi were founded in 2012. In less than two years, their valuations have exceeded the overall valuation of Weilai Auto. At its peak, their valuations reached 3000 billion US dollars.

Is it reasonable?
The designation is unreasonable, but if there's capital to foot the bill, then it's not a big deal.

"You need to be careful of Chen Wei. He will definitely try every means to acquire Bumblebee, so that they will have the capital to compete."

With the two sides switching positions, it is imperative for Didi, which has a natural disadvantage in the social networking field, to acquire Dahuangfeng. Otherwise, they would not be able to maintain their market share of less than 40%.

In the previous version of the battle between Kuaiche and Didi, although Chen Wei tried every means, Kuaiche still ended up acquiring Dahuangfeng. The fundamental reason is that one party wanted to add icing on the cake, while the other party wanted to survive. Their needs were completely different.

In the subsidy war of the 1.0 era, the Liu family had not yet entered the game, or rather, had not yet entered on a large scale. At this time, the battlefield was still between Ali and Tencent, with each bringing capital from various beneficiary groups to compete.

However, in the 2.0 era, with the entry of Uber, it became unclear how the Liu family took the lead. After the merger, Didi clearly held an absolute advantage, while Uber, like all companies that entered China, struggled to adapt to the local environment.

Even in Uber's home turf, Didi acquired their competitor, essentially launching a surprise attack on their stronghold. Didi has also been doing quite well in the global market.

However, no one knows what happened behind the scenes. Chen Wei became a founder who was almost powerless. The merger with Uber allowed Uber to reap various benefits and even blocked Didi's path to go global.

This merger is truly bizarre in every way; the winner is being 'taken over' by the loser.

Aside from retaining a certain number of shares and the position of CEO, Chen Wei doesn't seem to have gained any significant benefits. Similarly, Ali and Tencent don't seem to have gained much outside of the payment sector.

In short, everything about it is strange. In fact, during the merger of Didi and Kuaidi, Kuaidi did not gain much benefit, but that was because Chen Weixin did not want to play with them anymore and took the initiative to back down.

I wonder what ride-hailing services will look like this time.

Kuaiche currently holds a significant advantage, and Chen Weixin has not shown any intention of giving up. Furthermore, Kuaiche's CEO, Lü Chuanwei, is also highly motivated, and in terms of operational capabilities, Lü Chuanwei is actually stronger than Chen Weixin.

"If you take over Bumblebee directly, you'll have nearly 70% market share. Then, whether to continue fighting or maintain harmony will be up to you, won't it?"

If the two sides are evenly matched, then a merger is possible. But if the gap is too big, then there seems to be no need to merge. Just like Meituan and Ele.me, keeping them together can actually have a positive effect.

Tan Jincheng was eager to see what would happen if the ride-hailing market didn't merge, but instead became a two-way competition like the food delivery market.
"If we talk to Chen Wei again about the 70/30 market, we won't have to fight a subsidy war anymore. When new competitors enter the market, we can also divide the market into three parts and check and balance each other."

The background of Uber's entry into China is that after the battle between Kuaidi and Didi, they were severely weakened. In addition, after the merger, there was a brief power vacuum, which gave the Liu family an opportunity to take advantage of the situation. Now, if they do not merge, with each party harboring its own schemes and guarding against each other, it is unlikely that the Liu family will be able to find a loophole so easily.

Even if Uber still plans to enter China, once the three major players are in a three-way standoff, they can gang up on Uber.

Moreover, in any market, the harm of a monopoly is greater than that of competition from multiple companies. The subsidy war in ride-hailing services successfully cultivated the market, but it will eventually affect the later customers and is not conducive to future development.

As long as market competition continues, the ride-hailing market can remain vibrant. A vibrant market, coupled with a downward economic trend, will enable electric vehicles to sell a sufficient number of units.

"You can do your best to acquire Bumblebee, and then negotiate with Didi with the market share you have. Let's put a stop to the subsidy war, properly digest the market we've cultivated, and nurture users' consumption habits."

"As for Ali and Tencent, even if they are very rich, they don't want to keep burning money like this indefinitely."

Chen Weixin pondered for a moment, then nodded, accepting Tan Jincheng's explanation.

Kuaidi and Didi may seem successful on the surface, but they are now too deeply bound by capital. If the subsidy war continues, they will have to increase financing, and then their shareholding will only decrease, eventually leading to a loss of control over the company.

Stopping would go against the original intention of Ali and Tencent in promoting payment, but they are still independent companies after all, and cannot continue to rely on capital indefinitely.

Each party has its own interests and needs.

"Okay, let's talk about this later. Let's cut the ribbon first. It's not convenient for Wei Lai to do a large-scale publicity, but we can promote the express train more later."

Chen Weixin greatly admired Tan Jincheng's foresight. He naturally understood the warning in Tan Jincheng's words, but since it wasn't the right time for a long conversation, he decided to deal with the immediate matter first.

"Haha, thank you very much."

The waiting time has been agonizing, but thankfully it's almost been three months and the pre-announcement period is almost over. Once the most difficult first step is over, the listing plan will accelerate considerably.

The vehicle delivery ceremony in Luzhou was quite spectacular. Not only did Chen Weixin and Tan Jincheng appear, but also senior executives from the Luzhou factory and leaders from Luzhou City attended, and a great deal of media resources were also invested in Luzhou.

As the leading city for new energy, Luzhou has adopted a unique approach to businesses, starting with its heavy investment in attracting BOE Technology Group. In contrast, local governments typically attract investment by offering land, preferential policies, and preferential loans.

Luzhou, on the other hand, has long relied on its urban investment sector to bind itself with major companies through capital operations, forming a community of shared interests. Coupled with its proximity to universities, this has brought a large number of high-tech enterprises to Luzhou. The changes in Luzhou over the years have been nothing short of dramatic, transforming it from a small county town into a high-tech city and a new energy city.

Jianghuai is the darling of Anhui Province, or rather, Luzhou, but it also attaches great importance to Weilai. Weilai's current position as a major player in the new energy vehicle market and core component market cannot be ignored by Luzhou.

However, Weilai's success in the field of new energy is also inseparable from the strong support of Luzhou. All the necessary policies have been provided, and Luzhou City Investment will also invest funds to acquire shares. In addition, Weilai has received a lot of care in normal times.

The IPO of Weilai is a victory for Tan Jincheng and the entire Weilai team, and it is also a settlement for Luzhou's years of investment.

For companies like Kuaidi, the more B-end customers the better. Seeing the continuous stream of electric vehicles being shipped out of Luzhou, Luzhou residents experienced the joy of reaping the rewards.

Friday, September 8st.

After a three-month pre-disclosure period, the largest IPO in 2014 for the Shanghai and Shenzhen stock exchanges, and the first unicorn company since the establishment of the ChiNext board, officially passed the pre-disclosure period and entered the queuing stage for listing. This means that Weilai Group has taken another step closer to its final listing.

It has been exactly three months since Weilai Group submitted its listing application, which is almost right on time for the pre-disclosure period. Weilai Group's listing plan can be said to have taken a special route.

This high-tech enterprise, with its rapid revenue growth and ample cash flow, only distributed a token amount of dividends before its IPO, and even distributed most of its dividends to its grassroots employees in the form of red envelopes.

This situation alone justifies giving Weilai the green light for listing.

Incidentally, another A-share listed company under Tan Jincheng also routinely distributes dividends every year. In the era when high stock dividends were played wildly, Shanchi Technology has never carried out a high stock dividend since Tan Jincheng took over.

As of August 8, FlashTech's stock price was 32.16 yuan, with a market value of 164 billion yuan. Since its listing in 2008, FlashTech, which went public through a reverse merger with an issue price of 11.01 yuan, has seen a 292.09% increase, which is not particularly exaggerated.

However, it is one of the few A-share stocks that has been able to stably weather bull and bear markets since the 2008 stock market crash.

If we add the annual cash dividend, FlashTech's stock price has increased more than threefold. A threefold increase in six years is enough to prove that FlashTech is an excellent stock.

On the same day, the China Passenger Car Association (CPCA) released July's car sales figures, showing a slight decline in commercial vehicle sales, stable performance in the sedan market, and continued high-speed growth in the SUV segment.

However, the most eye-catching sector was the new energy vehicle sector, which delivered an astonishing performance in July.

The power of exempting vehicles from purchase tax is simply too great.

Sales of the three major new energy vehicle models in the domestic market—Aion S, BYD Qin, and Weilai ES6—have increased nearly tenfold compared to the same period last year!
The Aion S sold 2817 units in a single month, exceeding the total sales for the entire year of 2012, and accounting for 65% of the total sales for 2013!

In addition, the sales of the Weilai ES6 in July were also very impressive. Thanks to the delivery of the 500 vehicles in the express delivery, the ES6 achieved a monthly sales volume of 1517 units, breaking its monthly sales record since its launch.

Including the delivered electric buses, Weilai Automobile's new energy vehicle deliveries reached 4500 units in a single month, setting a new monthly sales record for new energy vehicles in China.

In the automotive industry, where everything is measured by sales figures, no matter how much hype is made about new energy vehicles, it can't compare to the explosive growth of tenfold in a single month.

The sales figures of the three most popular mainstream new energy vehicle models in July proved the unlimited potential of this sector, and the two automakers that strongly promoted new energy vehicles became the first beneficiaries.

"Sales this month are really good. With this kind of growth, we really have a good chance of achieving good deliveries for the whole year."

It's not just BYD and other microcars that are selling well; other microcars are also selling well, and even the sales of the Model S have skyrocketed. It's no exaggeration to say that the sales figures for all models have been inflated to some extent.

Especially for some large buses, the sales growth has been simply outrageous.

"At this rate, our Aion S might have to find its break-even point by next year."

The gross profit margins of the Aion S and ES6 are actually acceptable, but the investment in R&D, production lines, etc. is huge. Li Xiang's so-called break-even point is still too early. Unlike the mature industrial chain of fuel vehicles, the industrial chain of new energy vehicles requires a lot of support from the government.

Otherwise, with such a small number of orders and such high requirements, who would be willing to produce for you? In other words, it's not just about your own investment; investment in the supply chain is also necessary.

It will take at least several more years to find the break-even point.

However, there's no need to worry. Even without resorting to fraudulent subsidy schemes, the subsidies from Weilai are substantial. The subsidies for complete vehicles and power batteries account for half of the new energy vehicle sector, and the combined subsidies for these two areas amount to an astronomical figure.

"It's too early to talk about profitability. It would be excellent if a new brand could be profitable within three to five years. The infrastructure for new energy is still a bit lacking. It would be good if it could be profitable around 2018."

"Oh, by the way, Tesla is about to open up their patented technologies, including battery safety and motors. We'll try to open up some of those technologies as well."

Weilai also has a lot of patented technologies, which are currently being used interchangeably with Tesla. In terms of fees, everyone just makes a token gesture. The same goes for BYD; they all use each other interchangeably.

Dizi has a good vision in this regard. In his previous life, he had read some news reports that during the chip shortage, Dizi had the ability to manufacture chips himself and provided a lot of chips to his competitors. However, he didn't know whether the news was true or not.

But according to Tan Jincheng's understanding, this is possible.

While our competitors may engage in underhanded tactics, their actions are generally sound in terms of overall strategy.

"Huh? Tesla is going to open up its patents?"

Li Xiang was somewhat surprised. He naturally understood what opening up patents meant. Tesla wanted to open up its patents, and his boss actually seemed to want to follow suit.

"Well, foreigners have such a broad vision, we can't let them outdo us. Besides, opening up some patents would benefit the entire industry. We don't make money from patents, and even if we asked them for them, they might not give them to us."

Tan Jincheng's words made Li Xiang laugh. In fact, it was true. Most manufacturers didn't really have a concept of patented technology. It was only in the last two years that people started to have some awareness of patents. A few years ago, let alone patents, there were even cases of direct copying without any changes.

Generally speaking, large manufacturers won't bother with this kind of thing; it's quite rare for something like Chery to sue a Korean company.

Take the Porsche-style car for example. If Porsche were to sue it, it wouldn't be impossible, since that thing is just too damn similar. Whether it could win is another matter entirely.

If domestic competitors in the new energy sector secretly use Wei Lai's patents, Tan Jincheng wouldn't actually sue them; he wouldn't have the time or energy for it.

"Oh, right, sales grew very quickly in July. Let's add fuel to the fire. Here's what you do: arrange for a full refund of the purchase tax for customers who purchased our Aion S, ES6, and commercial electric vehicles between January 1, 2014, and July."

The exemption of vehicle purchase tax is naturally a good thing for later buyers, but it is relatively unfair to those who purchased before July, especially those who purchased in June. Due to information asymmetry, they did not receive this information and ended up spending a lot more money.

While businesses may try to bluff their way out of this, there's no need for them to do so, since most people knew about the purchase tax exemption policy from January to June this year.

Only a very small number of people are unaware of this information, or they have purchased it in advance due to their own needs.

According to sales statistics for the first half of the year, a total of 4026 Aion S and ES6 vehicles were sold. The purchase tax amount is certainly not small, but it is something that Weilai can afford.

In either case, it would just be an extra marketing expense for Wei.

A strange light flashed in Li Xiang's eyes, and he nodded to make a note of it.

Since joining Wei Lai, he has taken over some of Zeng Jixiang's work this year, traveling with his boss and getting to know some of his business philosophies.

Well, it did conflict somewhat with his business philosophy, but I did get to experience some different things and learn a lot.

Especially during the IPO process of Weilai, the senior management of the group company was restricted by the quiet period and could not accept any interviews or make any speeches, but the boss kept the company in the spotlight through various operations.

The competition for trending topics on the internet is quite fierce, but the boss always manages to keep Wei's popularity at a certain level, while also staying within the rules.

2014年8月9日凌晨，尉来汽车在各大官方渠道宣布对2014年1月1日至6月30日购买埃安S，尉来ES6两款车型的用户实行补贴购置税政策。

At the same time, text messages will be sent to this group of users, offering various subsidy options such as cash subsidies and a series of service packages provided by Weilai.

With the weekend approaching, many netizens were staying up late, and the subsidy policy released by Wei Lai caused quite a stir.

Sales figures for both models in the first half of the year are available. Based on the subsidy standards of 8000 yuan for the Aion S and 20,000 yuan for the ES6, Weilai has subsidized at least 54 million yuan to this group of users!

Furthermore, you can also choose to receive a direct cash refund!
"Holy crap, Boss Tan is so generous! I was complaining about the subsidy policy on the forum just a few days ago, and now Boss Tan is giving us subsidies!"

"I'm impressed. Boss Tan is really going all out for this IPO plan. He used his own money to give bonuses to his employees before, and now he's using company money to subsidize customers."

"Awesome! Wei Lai has always emphasized service spirit. I used to think he was just bragging, but this time I'm really impressed. These 4000+ users will definitely be loyal to him."

"Wow, what does the boatman think? What does Musk think?"

In the sweltering summer, car enthusiasts, restless in the early hours of the morning, began posting their purchases online. Interestingly, some of the users who had previously criticized Tan Jincheng on his personal social media account are now apologizing.

Along with netizens who love a good show, thousands of comments were posted on Boss Tan's latest post overnight.

With just a word from the boss, the employees are exhausted. During the day, the subsidies that Boss Tan requires are made, and the staff from Wei have to work overtime overnight to develop specific policy plans. These include direct cash subsidies, as well as various routine maintenance checks, battery optimization, and so on.

There are even services such as car wash packages. The wide variety of service packages is quite detailed, and the level of care put into them truly makes them a conscientious car company.

Of course, the most attractive offer is the full cash rebate of the purchase tax.

(End of this chapter)