2003: Starting with Foreign Trade

Chapter 886 Pearl City, Acquisition!
On the hotel balcony under the cover of night, Shen Nanpeng and Tan Jincheng sat across from each other.

There were some fruits on the table in the middle. Tan Jincheng had a Coke, and Shen Nanpeng had a beer. They were quite relaxed.

"The new energy vehicle market has performed very strongly this year, and the competition should be even fiercer next year. It seems like your models are not enough."

Although he didn't go to the auto show in person, Shen Nanpeng kept a close eye on the situation and looked for investment opportunities.

"That's for sure. The competition will only get fiercer year by year. This is just the beginning, but we will still proceed according to plan."

Of course, not all of the more than 100 new energy vehicles on display were new cars or concept cars, but each company brought out its best features, with many highlight models, including the hybrid series from joint venture brands and BYD's Qin EV and Song EV.

After so many years of development in new energy vehicles, it seems that hybrid vehicles can solve range anxiety better than pure electric vehicles. However, in reality, pure electric models are the best-selling ones, with pure electric models and hybrid models roughly split 60/40.

After working on hybrid vehicles for several years, Dizi found that things were not as they had imagined. Although they had a significant advantage in hybrid technology, pure electric vehicles seemed to be more popular, so it was inevitable that their flagship model would be launched as a pure electric version.

Tan Jincheng also visited Dizi's showroom during the day and experienced the Qin EV. His biggest impression was that the interior and dashboard had undergone significant changes compared to the hybrid model. In addition, the overall workmanship and materials had been greatly improved.

Under the pressure from the Aion series, Dizi clearly realized that if it wanted to maintain a competitive relationship with Weilai in the pure electric vehicle field and compete for market share, it had to invest some resources.

"BAIC has invested heavily in technology this year, putting in a lot of money. Their cars this year have quite a few highlights. This should be another heavyweight competitor, right?"

Tan Jincheng smiled and said, "That's true."

Tan Jincheng has little to say about BAIC New Energy. Weilai has many collaborations with Foton and BAIC, and the engine development technology ultimately benefited from BAIC (Foton). Many of Weilai's middle and senior management came from BAIC.

The cooperation between the two parties was very pleasant, but he really didn't know how to evaluate BAIC.

With the cooperation qualifications of two major joint venture brands, Mercedes-Benz and Hyundai, and with companies like Foton that have made certain achievements in the commercial vehicle field, its investment in new energy is no less than that of any of its competitors.

Coupled with its natural geographical advantages, it has unparalleled advantages in terms of policy support and university resources, but the result is that it is doing as badly as Wang Xiaoer during the New Year, getting worse year by year.

He has no worries about investing in new energy projects from companies like BAIC and Dongfeng. However, he needs to be wary of independent brands like BYD, Geely, Chery, and Great Wall starting to make moves.

Especially Dizi, they have clearly started to exert their efforts.

“In the next few years, Weilai’s market share should decline. In addition to everyone’s efforts, Tesla should also accelerate its entry into the domestic market. In terms of experience, you are not as good as these companies.”

"Moreover, they all have models that sell in large quantities, while your Weilai brand doesn't have any models that sell in large quantities yet, and those that do mainly target B-end customers. That's your disadvantage."

The Aion series is already the undisputed king of ride-hailing services, with a considerable market share in Guangdong, Zhejiang, Jiangsu and Luzhou areas of Anhui. Its ability to suppress the sales of BYD Qin in Guangdong is entirely due to the strong support of its B-end clients.

"We will also launch high-volume models in the second half of next year. We don't care much about market share. Anyway, the new energy vehicle market is still a blue ocean market, and we have plenty of time to adjust."

"At present, our main focus is still on building a brand image."

Brand image is very important for any company, and what Weilai needs to do is to build its brand image like Tesla.

Unlike independent brands like BYD, when they were first established, they were lucky if they could even put together a car, let alone make anything high-end. With such a weak foundation, they could only make low-end cars.

Once consumers have become accustomed to low-end brands, it will take many years of accumulation to gradually gain their acceptance of high-priced products and improve their image.

"The subsidy policy hasn't changed much yet. It would be a huge loss not to take advantage of such a good opportunity to build our brand image."

Take the BYD Qin series as an example. Their official guide price is around 25 yuan, but after deducting national subsidies, local subsidies and the car company's own subsidies, it doesn't cost much.

According to Wei Lai's business model, by using subsidies to raise car prices and then improving quality, the only difference is that he won't make a profit from the subsidized price. Once the brand image is established, things will be much easier.

Judging from the sales figures of the ES8, Weilai's high-end image has been quite successful.

Swirling his wine glass, Shen Nanpeng nodded and said, "That's indeed a good idea. We should also have some of our own high-end brands; we can't just rely on low-profit products."

"However, if that's the case, then Weilai's sales of new energy vehicles won't change much next year; by the way, can you achieve 10 vehicles this year?"

"It's a bit off, but it's pretty close. There shouldn't be much change next year. The expected number is around 12 vehicles."

With November already halfway through, the annual sales figures are basically in. In particular, the relatively stable new energy vehicle market suggests that Weilai's overall sales of new energy vehicles this year should be between 94,000 and 96,000 units.

There is some gap between the sales target of 10 vehicles and the actual sales target, but it is not a large gap and is basically in line with the current market trend.

However, it is not impossible to reach sales of 10 vehicles. Starting next month, new energy vehicles will begin to pilot green license plates in five cities. Some car owners who do not want green plates or want to take advantage of policy loopholes to get blue plates may take advantage of the last wave of benefits to make a purchase.

After all, you don't need to enter a lottery to buy a new energy vehicle, so let's get the license plate first.

A common misconception is that blue license plates do not equal new energy vehicles. In fact, new energy vehicles purchased before December 1, 2016, all had blue license plates. Green license plates were officially implemented after December 1, and were piloted.

New energy vehicles that were previously registered with blue license plates can later be changed to green license plates, but this is not mandatory; you don't have to change them.

Blue-plate new energy vehicles still hold some commemorative significance. Tan Jincheng personally owns several blue-plate new energy vehicles, and he has no intention of replacing them, especially the first Tesla sports car he brought back from abroad.

Of the several cars he acquired, he gave one away and another to a lieutenant for dismantling. He kept one for himself, but it wasn't sold for long and there weren't many. It's extremely rare in China, so it still has some collectible value.

Zhang Yong and his colleagues were quite shocked when they entrusted their car to the company for dismantling; the boss was being incredibly generous.

According to the traditional practices of car manufacturers, many companies actually cooperate with car rental companies when conducting tests, renting a similar competing product to run tests or disassemble.

Renting cars for testing is no secret in the industry; it's all about cost considerations.

Some car companies even rent the models they compare at their press conferences in order to save money. According to them, as long as they don't cause trouble, they should save as much as possible.

However, Wei Lai is rather peculiar. The models he uses for comparison tests are all ones he bought himself, and they are all new cars on the market. Boss Tan's wealth and power are not only reflected in his outward appearance, but also in certain details.

In his own words, if you can save hundreds of thousands of dollars, why bother with research and development? Just copy it directly.

Furthermore, the condition of rented cars varies, making it impossible to obtain the same test data as a new car.

"It seems that Weilai's sales will decline significantly next year. Those who bought the stock are going to have a headache again."

In 2016, the sales of the Yuechi series reached an unprecedented peak. In October, the Yuechi A1 sold more than 10 units, which is quite exaggerated, right?

That's not even the most outrageous part; the Yuechi A1 is even more outrageous this month!
The Yuechi A1 has already sold over 60,000 units. If this trend continues, its sales this month are very likely to exceed 70,000 units, which is practically unbeatable.

With its phenomenal sales performance, the Yuechi A1 continues its incredible trend and is likely to become the top-selling model this month.

In the SUV segment, the market generally predicts that the Yuechi A1 alone may reach sales of 50 units by the end of this month.

"Haha, that's true, but it's not something we can decide."

Every peak must eventually come to an end. The peak sales year for the Yuechi A1 was undoubtedly 2016, since the SUV market can no longer experience the same kind of sustained, frenzied growth as it has in the last two years.

Needless to say, the total sales in 17 were naturally lower than in 16. After all, sales in each year thereafter will be lower than the previous year; the only difference is how much they will decline.

The life cycle of every car is like this. Tan Jincheng does not expect to survive on this one series indefinitely. He must develop a new high-volume model while the Yuechi series is still at the peak of its life cycle.

"That's true. It's not something I can decide on my own. We might not see much change in sales next year. This is just our prediction."

"It's too early to worry about next year's sales. Let's focus on the present first."

“No problem. You’re going to Zhushi tomorrow. Have you thought it through? Huang Zhang will definitely be prepared after we meet. He’ll definitely put in a good word with the partner companies.”

According to Shen Nanpeng, if they were to use an IPO as bait to lure Huang Zhang into selling his shares, then they should go all the way.

Before meeting, they should try to acquire as many shares as possible that are not held by Huang Zhang. Currently, apart from Ali, Haitong Kaiyuan, and Haitong Information, which they have already negotiated with, they have not yet negotiated with any other Meizu partners.

Three companies, including Ali, hold 30.17% of the shares. Shen Nanpeng's point is that it would be good even if they bought 40%.

The interests of the partner manufacturers are definitely closer to Huang Zhang's, but when it comes to interests, even Ali couldn't resist exchanging them with Tan Jincheng, let alone these Meizu partner manufacturers.

As long as the exchanged benefits are sufficient, acquiring a 40% stake should not be a problem.

Tan Jincheng shook his head: "Forget it, let's meet him first. President Huang has been in this business for so many years, we can't underestimate his personal charm."

Huang Zhang, who didn't even finish high school, worked in an electronics factory. Without any formal education, he rose to become the general manager of a foreign company through his own abilities, and later, through his own efforts, made the MP3 industry a leader.

From MP3 players to domestically produced smartphones, Huang Zhang was once called the Chinese Steve Jobs. Although this title may have been somewhat exaggerated, it was enough to prove his abilities.

It's important to understand that Meizu, which has always maintained a family-style management system, has a core team without any shares. Key executives like Li Nan and Bai Yongxiang have worked for him for over a decade without owning any shares, demonstrating his exceptional ability and personal charisma. Regardless of what happens at Meizu, Huang Zhang's technical genius and business success cannot be questioned, and he should not be underestimated.

Without informing Huang Zhang, it's easy to suspect that some loyal partners might betray the company to other Meizu partners who hold shares in Meizu.

If that's the case, then the path to acquiring Meizu is completely blocked.

"Since we've agreed to proceed with courtesy before resorting to force, let's make sure we go through with the proper courtesy first, and avoid any unforeseen trouble beforehand."

Shen Nanpeng smiled and said, "Okay, you can decide for yourself."

Tan Jincheng rejected his suggestion, but Shen Nanpeng was not unhappy. Being cautious was indeed the right thing to do, and besides, the benefit of doing so was that he would not offend Huang Zhang.

Tan Jincheng has quite a few businesses that cooperate with Meizu. He supplies Meizu with batteries, and apps like Orange Products and Honor of Kings also have some cooperation with Meizu.

Although Huang Zhang insists on having no ads in the system and refuses to share revenue with pre-installed software, it doesn't mean he won't cooperate with software companies.

"Currently, we have 30.17% of the shares that we are certain about, and we only need to acquire 20.83%. If possible, it would be better to acquire them directly from Mr. Huang."

In this way, Huang Zhang's shareholding can still remain above 29%, making him the absolute largest shareholder of Meizu. If Meizu can successfully go public, it may not be a bad thing for Huang Zhang.

Of course, it depends on how Huang Zhang interprets this.

"Then I wish you great success!"

Shen Nanpeng raised his glass to Tan Jincheng, who smiled and clinked it against his Coke bottle.

Zhushi, Xiangzhou District.

Meizu, having secured several large investments, also has its own technology park, which is adjacent to Kingsoft's software park and other technology companies such as Actions Technology.

"Speaking of which, the last time I came here, Mr. Huang didn't even bother to talk to me."

In the early 2000s, Tan Jincheng considered investing in Meizu, but Huang, the boss, never met with him and simply sent someone to send him away.

What a joke! He didn't even agree to invest in him when Mr. Lei next door wanted to. He only wanted Mr. Lei to work with him. Who knows which upstart popped up and said he wanted to invest in him? He'd actually listen to him?
"Back then, Meizu was just a small factory. The factory buildings were nothing like the ones we have now. They were similar to our original factory in the export processing zone, and they were rented."

"Boss, are you going to say 'Thirty years east of the river, thirty years west of the river' again?"

"No, I'm just feeling a bit sentimental. In business, sometimes a single mistake can easily wipe out all your hard work. If it weren't for a few tactical errors, we wouldn't have had the chance to talk about acquisitions."

Having survived through the late feature phone and early smartphone eras, this mobile phone brand is more valuable than Xiaomi, which is now valued at over $400 billion. The fact that investment institutions now consider its $300 billion valuation too high is somewhat ironic.

"Everyone says the car market is brutal; if you sell well this year, you might go bankrupt next year. But the mobile phone market is even more brutal; a small mistake can ruin a brand."

Samsung is amazing. Giants like Nokia and Motorola exited the market faster than the tide receded. In just a few years, Nokia and Motorola have been almost forgotten in China.

"Of course. Mobile phones are actually fast-moving consumer goods. People will replace their phones every two or three years, or even every year or two. If your product cannot satisfy most consumers, it will disappear very quickly."

"Cars are such expensive products that even if you buy one that you're not satisfied with, you can only put up with it if you sell it and buy a used one. So we need to give you more time."

The boss wanted to buy a mobile phone brand, so as his dedicated assistant, she naturally needed to know something about it. After learning about the detailed operating model of the mobile phone industry, Zhao Xinyi was quite worried.

Fortunately, the reason her boss bought the phone brand wasn't because he actually wanted to make phones, but rather because he wanted to shift towards the smart car ecosystem, which reassured her somewhat.

Based on the information Zhao Xinyi collected, competitors in the automotive industry are incredibly "friendly," while those in the mobile phone industry are truly ruthless.

In addition, their marketing strategies are diverse and worth learning from.

Tan Jincheng and Huang Zhang's first meeting was not at Meizu Technology Park, but at Huang Zhang's villa in Zhushi. Tan Jincheng was too popular, and Huang Zhang did not want to attract too much attention, which was exactly what Tan Jincheng thought.

"Mr. Huang, it's an honor to meet you."

With a buzz cut, Huang Zhang smiled and extended his hand: "Not at all, President Tan is the one I've long admired. Come to think of it, this is our long-awaited meeting, ten years overdue."

"Has it been ten years? Probably not, but that's not important. Good things come to those who wait."

Huang Zhang can be considered a contradiction. You can tell from this villa that although it is a villa, the interior decoration is very simple and does not look like a villa should.

He also wore a set of work clothes, lived a very simple life, and was active on the Meizu forum like a homebody for many years. He had an extreme pursuit of technology, but was extremely resistant to full-screen displays.

Another issue was Meizu's stubbornness regarding Qualcomm's patent licensing, which led them to use MediaTek chips across their entire product line, causing them to miss out on the high-end market.

In summary, this guy is a contradictory combination of idealism and pragmatic business acumen.

"Speaking of that incident back then, I still have to apologize to President Tan. I said we should have met."

Tan Jincheng was speechless for a moment. This guy was known as a socially avoidant founder. He did not give any interviews throughout 2014, did not speak at the company's annual meeting, and only expressed his views through videos or letters.

It now seems that he wasn't deliberately trying to keep a low profile, but rather that he clearly lacked the ability to express himself effectively on the spot.

Why keep bringing up this old story? We're all respectable people; let bygones be bygones. Everyone has a past.

"Apologizing is enough; it was my presumption at the time."

After saying that, Tan Jincheng gestured for Zhao Xinyi to put down the documents and gifts and leave. "If you keep talking about this, I'll have to resort to Lei Jun to punish you."

After Zhao Xinyi left, Huang Zhang visibly breathed a sigh of relief, clearly indicating that he disliked such small talk.

"Mr. Tan, who is looking for me this time?"

"I'd like to discuss some collaborations with Mr. Huang and with Meizu."

After speaking, Tan Jincheng described to Huang Zhang some of Weilai's ideas on the intelligent car ecosystem, which was to combine Meizu's existing Flyme system with the existing NIO Pilot system to improve the entire Weilai car ecosystem.

Huang Zhang's understanding of technology truly deserves the title of "genius." Of course, Tan Jincheng would not tell him the core secrets, but he could understand it after just a rough description.

With curiosity in his eyes, Huang Zhang looked at Tan Jincheng and said, "President Tan's idea is a bit ahead of its time, but it is indeed quite interesting. So, does President Tan mean to invest in Meizu this time?"

Based on Tan Jincheng's general description, Huang Zhang is not opposed to such cooperation, which could be a new attempt for Meizu and an opportunity to open up new businesses.

"Yes and no. We will invest in Meizu with ByteDance as the main entity, but we want to gain control of Meizu."

Who the hell would dare to invest in you? Last year, you forced Ali to sign a "non-interference in operations" agreement, making Ali, who is usually domineering and likes to control his invested companies, lose face.

Would I dare hand over such an important project to you without securing control?

Huang Zhang was stunned. He clearly hadn't expected Tan Jincheng to make such a request. He stared at Tan Jincheng for several seconds before slowly saying, "Mr. Tan, do you mean you want to acquire Meizu?"

"Yes and no. I only need 51% control. We want absolute autonomy in the automotive ecosystem. I can also hand over the mobile phone business to Meizu for independent operation. In terms of profits, we can even give up a portion of the profits to Meizu."

"Of course, if Mr. Huang is willing to sell, I will not refuse. I can give a good valuation."

Without refusing to meet Huang Zhang's gaze, Tan Jincheng spoke calmly.

The question of whether it was yes or no left Huang Zhang speechless for a moment, while Tan Jincheng's indifferent tone also somewhat provoked him.

Several years ago, when this young man proposed to invest in Meizu, he dismissed the naive young man without even meeting him.

In just a few years, this young man came knocking again. This time, he didn't invest; he acquired the company directly.

The atmosphere was somewhat tense. After about a minute or two, Huang Zhang said in a similarly indifferent tone, "Does President Tan think Meizu is bound to lose? Or does he think I, Huang, am no good?"

"Please don't be angry, Mr. Huang. If that were my thinking, I wouldn't have come to you. On the contrary, I have great respect for Meizu. I recommended the M8 to people around me more than once back then."

"Let's be honest from the start. The cooperation I'm talking about is based on the premise that I gain control of Meizu. Mr. Huang, you can listen to my cooperation proposal before making a decision."

"Alright, let's hear Mr. Tan's opinion."

Huang Zhang, born in 1976, is only 40 years old this year and is in the prime of his life. However, when faced with the calm expression of 31-year-old Tan Jincheng, he wondered for a moment if he was really getting old.

(End of this chapter)