2003: Starting with Foreign Trade

Chapter 912 "Let's Go and Make a Scene in the Automotive Industry"

PS: 8K long chapter.

"Wow, that's amazing! They hired so many celebrities. How much money did that cost?"

"Haha, the spokespeople from several companies are here, and we've also invited a lot of popular celebrities. This lineup would be amazing for any company's annual meeting."

"That's right. Jay Chou will be singing next year. I doubt many companies would have such a big budget."

"How much money will this cost?"

The lights at night were dazzling, and the stage effects were spectacular.

The Beicang district, which is usually quiet early in the morning, was unusually lively tonight. The entire event lasted until 10:30 p.m., and the stadium, which can accommodate 7000 spectators, was packed to capacity.

The most shocked were Lei Chi and the 1000 employees from the other four companies present. A visual feast showed them what true wealth and power meant, and they were still somewhat reluctant to leave even after the event.

Ordinary wage earners who are used to being "oxen and horses" experienced watching their leaders make fools of themselves today. It was a bit of a pity that the big boss didn't go on stage.

On stage, Zhang Yong, CEO of Weilai Group, sang and danced with his off-key singing voice, while Zhang Xupeng, Executive President of Shanchi Group, was even more hilarious, performing a martial arts routine that looked comical and funny, making everyone laugh.

However, when it comes to having fun, Orange Group is the place to be. When internet programmers get excited, they really can outdo everyone else. Even Lu Qi, who has just been with the company for a year and is usually very low-key and rarely seen, went on stage and danced a breakdance popular in the 80s and 70s.

For Lu Qi, who was thriving in Silicon Valley, this kind of scene was child's play.

"Hey, let alone comparing with Orange and his group, we can't even compete with these internet people. We can't even compare with Flash and Wei Lai. They really know how to have fun."

After the event, due to the simultaneous live broadcast, the most discussed topics online were Boss Tan's wealth and the performances of the celebrities, while the employees on site mostly discussed the performance of their own show.

Several Leichi employees, unwilling to go back to sleep after the show, decided to find a barbecue restaurant for a late-night snack. Besides watching the show, what they were most looking forward to tonight was the lucky draw.

What's an annual meeting without a lucky draw? This year's prizes are plentiful, with everyone receiving a Meizu headset as a participation prize.

There are tons of small prizes, including cell phones, clothing, and electric vehicles, and the grand prize is, unsurprisingly, the most high-end ES8 model currently available in Weilai. If you don't want it, you can get cash instead.

Leichi also offers prizes, though not the old man's car, as that can't be driven in the city. However, besides its main product, Leichi also offers other products, such as electric tricycles, ATVs, golf carts, and more.

"It's normal that we don't know how to play since this is our first time participating. I didn't even know that we were part of Boss Tan's business."

"That's true. I only thought the name was somewhat related to Flash, maybe it was opened by one of Flash's leaders, or maybe it was opened by a relative of Boss Tan. Who would have thought it was opened by Boss Tan himself?"

"Boss Tan is really something. He wants to manufacture high-end cars, and he doesn't even let go of our low-end old people's cars. He does it very well."

"I've never seen Boss Tan come to the company before, what a pity."

Leichi employees are well-paid, but they have always been outside the system, their overall education level is not high, and they don't have much business dealings with other companies.

In previous years, they didn't hold any annual party during the Spring Festival. They would just have a New Year's Eve dinner, distribute some New Year's supplies, and so on. It was no different from an ordinary factory.

Many newly joined junior employees are not really aware that Leichi belongs to Tan Jincheng. For them, they don't care who the boss is, as long as they are paid on time.

"It's just Mr. Tan's business, which explains why our treatment is much better than other factories. Mr. Tan probably wouldn't care about the money our company makes."

"Then, so it seems that what was rumored in the company before, that one-third of the profits would be distributed to the employees, must be true. I don't believe it if it were any other boss, but I believe it if it were Boss Tan."

"Our company's annual profit is not enough to host an annual meeting like this a few times a year."

It's no secret in the company that Leichi allocates one-third of its profits to employee bonuses and profit sharing, although people have always been somewhat skeptical about whether there really is that much money to be distributed.

However, the annual bonus received separately from the salary system is a real benefit, so how much of the company's profit sharing is not so important.

For example, in 2017, a period of rapid development in the industry, Leichi Group sold more than 300,000 old man's cars worldwide, and once had a record of monthly sales exceeding 30,000 vehicles. They also had businesses with high profit margins, such as golf carts.

Leichi, which achieved record highs in both revenue and net profit this year, will naturally receive a substantial dividend as a separate payment.

As for the rumored one-third profit split within the company, that figure is naturally inaccurate. It takes into account the salary budget for the second year and R&D investment, etc. Even if you're making electric vehicles for the elderly, you still need to invest in R&D. You still have to support R&D investment of about 5% of revenue every year.

The current market for electric vehicles for the elderly is somewhat similar to the early days of the rapid development of two-wheeled electric vehicles. In a market teeming with small workshops and varying quality, it was incredibly easy for companies like Leichi, with their large-scale factories and supply chain advantages, to make money.

However, the good days are coming to an end. The development of electric vehicles for the elderly has been too fast, and they cannot obtain production qualifications for new energy vehicles. They are all on the road in China without a license, and corresponding policies will be introduced soon.

"Oh, you mean Leichi products? These are more common in France and Italy, but less so in Germany."

In France, this is called Voiture Sans Permis (VSP) or "Sans permis," which means unlicensed vehicle. It is restricted to speeds up to 45 km/h and can be driven without a license. Common brands include Aixam and Ligier.

In Italy, this is called a light four-wheeled vehicle. It is commonly seen in cities and used on narrow streets. Some models do not require a driver's license, while others do.

The LeaRide models exported to these two countries are all driverless and meet EU standards. They sell quite well because they are cheap and practical.

While new energy vehicles from Weilai have not yet found a market in these two countries, Lexus has taken the lead in opening up the market. Tan Jincheng summarized that there may be several reasons why Lexus is popular in France and Italy.

One reason is the low price, which is definitely the main factor. The second reason is the transportation environment in France and Italy. Of course, the fact that people in these two countries seem more abstract might also be a factor.

Compared to the meticulous Germans, France and Italy seem far too abstract.

The audience members of the party went out for a late-night snack, and Tan Jincheng was also dragged over by the enthusiastic Kruger to have a late-night snack as well. Not all foreigners like Chinese food, but most foreigners can accept barbecue.

Tan Jincheng found a private barbecue restaurant, and Mr. Li from Jili was with them. The three of them ate barbecue with beer.

Wang Fengying from the Great Wall went back to her home in Ningbo with her husband.

"I know you have many businesses, but to be honest, I never expected you to produce these low-speed electric vehicles. They look so bumpy."

Li Shufu was also impressed. Everyone knew that Tan Jincheng's business system was huge, but it was impossible for them to pay attention to every business. Moreover, Lei Chi had always focused on rural areas and had never used Tan Jincheng's name.

Aside from Tan Jincheng's appearance once during the initial promotion, he hadn't been involved in the company since. The real credit for its development came from the time when Zhao Xinyi was in charge.

"Haha, Mr. Li said we're imitating the look of his own car? Hehe, I'd like to imitate the look of other cars, but I'm afraid they'll sue me."

Li Shufu smiled knowingly and said, "I think it's more than that, isn't it?"

With the rapid development and explosive growth of Geely's production capacity, if Geely wants to achieve a real breakthrough in new energy vehicles, it must focus on improving its batteries.

Geely currently lacks technology in the battery field. This trip to Ningbo is to discuss with Tan Jincheng the possibility of jointly building a battery factory.

Li Shufu had discussed this matter with Tan Jincheng a long time ago, but at that time there were still too many concerns. Geely was not willing to make such a big decision to entrust the core battery supply to a competitor.

However, it seems that there is no better option than to cooperate with Tan Jincheng, as Weilai is too powerful in the field of new energy vehicles.

Besides holding a large market share themselves, ByteDance also holds shares in other companies such as Guoxuan and Ningde, which rank among the top ten in terms of shipments.

In the entire power battery field, Tan Jincheng has involved himself in the industry and made investments in a wide range of well-known companies across the country.

They also have investments overseas, covering everything from upstream to downstream, with a layout similar to Tencent's in the gaming industry—low-key but extremely powerful.

If they can't cooperate with Tan Jincheng, then they can only cooperate with BYD. Compared to BYD, Li Shufu obviously trusts Tan Jincheng more.

This isn't just a feeling; it's based on years of observation that Tan Jincheng's cooperation model is more open compared to BYD.

Tesla, also in the new energy field, can confidently entrust its battery supply to Jinshidai, and the two parties have even renewed the contract. This alone is enough to show that Jinshidai will not tamper with the core supply.

Taking all factors into consideration, Li Shufu decided that cooperating with Weilai was the best choice before his own battery industry was fully established.

"How do you say this?"

The one who asked the question was Krull, who was also somewhat curious about Li Shufu's statement.

"I think it's from a brand promotion perspective, Mr. Tan, isn't it?"

"Haha, that's definitely something we've considered."

Most electric vehicles for senior citizens imitate luxury car brands, with very few imitating domestic brands. Only Leichi insists on imitating models from Weilai.

Thanks to its solid build quality, long battery life, reasonable price, and channel advantages, it was able to quickly seize the market after its reputation exploded.

If the car is of good quality, consumers won't care whether it's imitating BBA (BMW, Mercedes-Benz, Audi) or Yuechi A1 or Weilai ES8, since they're not on the same track. This kind of imitation can further enhance Weilai's brand value.

Being imitated alongside luxury brands like BMW, Mercedes-Benz, and Audi, and still selling well, can create a misconception among consumers over time.

"Haha, that's a great move. President Tan truly lives up to his reputation as the best at marketing."

"I see."

Kruger laughed too. This wasn't a particularly difficult marketing tactic to understand; it was simply about subtly influencing some consumers to believe that the brand was on par with BBA (BMW, Mercedes-Benz, Audi).

However, the prerequisite is that the imitated product must sell well, have a sufficient market share, and be of high quality.

Just like the Porsche that Zhongtai imitated, due to quality issues, its life cycle was less than a year, which invisibly damaged the brand image.

"Your method is quite good. You must have done a lot of work to quickly establish the Weilai brand image."

Those of them who are in the automotive industry know that it is no easy feat for Weilai to establish its own mid-to-high-end brand image in less than ten years and to seize a large market share from joint venture brands in the SUV market.

It's important to understand that making a mid-to-high-end product isn't simply a matter of setting a higher price, nor does it guarantee that a good product will be accepted by consumers. There are many examples in the market of good cars that go unsold.

This move by Leichi shows that Tan Jincheng has been laying the groundwork behind the scenes, using various methods to make the brand image deeply rooted in people's hearts. Over time, the company has gradually built its own brand influence.

Among emerging brands, the ones that have launched new products most often to compete with are Tesla's Model S and Weilai's ES6 and ES8 models. It can be said that Tan Jincheng has spent ten years making Weilai one of the benchmarks for new energy vehicles.

The question of whether the Eastern Hemisphere will become the strongest in recent years has been a hot topic. It remains to be seen how this situation will change after Tesla is produced in China.

February 13th, the 2th day of the twelfth lunar month.

News came from across the Pacific that F/B/I executives warned against using Huawei phones, and that Best Buy was considering canceling its partnership with Huawei, meaning Huawei was likely to lose Best Buy's support.

The blow to chrysanthemum factories is intensifying, making this year destined to be extremely difficult for businesses.

Today, Weilai Group launched its largest dealer/supply chain conference since its inception, once again at the Beicang Sports and Arts Center, with nearly 1200 dealers and supply chain representatives attending the meeting.

"This is quite a big event. Are they about to unleash their big move?" The company representatives entering the venue clearly realized something. This didn't seem like a supplier conference. Judging from the setup on the stage, it looked more like a new car launch.

"Haha, it looks like a new car launch event. As expected of Boss Tan, who always likes to stir things up at the beginning of the year. However, today's date seems to be a bit unlucky."

The whole nation is currently discussing the targeting of Chrysanthemum Factory, and public opinion is indignant. Choosing to hold a press conference on this day seems to be diverting a lot of the attention away from the factory.

"There's nothing we can do about it. This date wasn't set just today; we just happened to be there."

In addition to 1200 company representatives, there were also many reporters present. While reporting on the event, they were also discussing the Huawei phone manufacturer, demonstrating the high level of public interest in the matter. The Huawei phone concept stock sector on the A-share market experienced significant fluctuations.

"Mobile phones will always be more popular than cars, so it will probably be a bit difficult to grab the spotlight. However, our boss Tan doesn't seem to lack the spotlight."

The massive annual meeting a few days ago brought huge attention to the ByteDance group, even surpassing the popularity of the Spring Festival Gala at one point. However, some people criticized the group for its extravagance and waste, inviting so many celebrities and giving away a huge number of prizes.

The criticisms and envious comments brought huge traffic to the event, and even the previously low-profile company, Leichi, attracted considerable attention, with the attitudes of Leichi employees also being exposed.

The media, which had previously been somewhat critical of Tan Jincheng for running such a low-end company that produced "industrial waste," dared not criticize it further. With nearly 5000 employees, an average monthly income of over 7000 yuan, social security for all employees, and salary expenditures exceeding 5000 million yuan, no one could criticize the low-profile company any further.

Moreover, they also export many products, not just low-end electric vehicles for the elderly that disrupt traffic. In addition to these, they also generate a lot of tax revenue and foreign exchange for the local area. Such a company cannot be condemned from a moral standpoint.

It was still a live broadcast. Unlike the annual meeting a few days ago, this live broadcast was not promoted at all. However, the Orange Live platform still received more than 100,000 online viewers.

Wei Lai and Tan Jincheng's popularity remains high. Compared to the annual party with millions of viewers a few days ago, He Jia is much calmer.

"I really don't understand why the boss won't allow advertising. Come to think of it, there was a new car launch today."

The two large-scale live streams before and after the Lunar New Year brought Orange Live a traffic comparable to several months of their marketing. He loved it when his boss came to do live streams, but he also knew it was impossible.

Like today's live stream, which the boss asked us not to promote.

"The timing isn't quite right. Also, although there's a new car launch, this time it's aimed at the entire industry chain, not a true new car launch event."

Tan Jincheng was somewhat helpless about the US announcing the second round of targeting of Huawei today; it was just a coincidence that he couldn't change.

He stockpiled chips not because he was afraid that Weilai would receive the same treatment as Huawei. To put it bluntly, Weilai wasn't qualified. At most, Horizon Robotics might be a contender in Weilai's supply chain, but the others wouldn't be.

There is no possibility that the US will be threatened. The reason for stockpiling chips is simply due to cost considerations. Even if they are not targeted, the price of corresponding chip products will eventually increase for those who are not targeted.

Stockpiling some goods in advance to cope with rising costs will at least improve a company's competitiveness for the next year.

"In the past year, Weilai's overall sales exceeded 100 million units. This is a small step for domestic independent brands, but a giant leap for Weilai. Weilai's achievement is inseparable from the help of our suppliers and distributors. Thank you all."

It was still 7 p.m. when Tan Jincheng, dressed in a casual suit with a light blue base, stood in the center of the main stage.

Before going on stage, he first summarized last year's achievements and thanked the suppliers.

Behind him were four models from Tiyilai: the ES6, ES8, L1, and the Tiyilai ES3, which made its debut. The ES3 is a mid-size SUV that competes with the Maodou Y. This is Tiyilai's flagship pure electric vehicle this year and a model designed to counter Tesla's localization in China.

“We achieved very good results in 2017, but we also encountered many problems, such as the decline in sales of the Yuechi series, especially the Yuechi A1, the increase in investment, and the rapid increase in the proportion of new energy vehicles leading to changes in the market share of fuel vehicles.”

"As a manufacturer that has always claimed to be a new energy vehicle manufacturer, it is a pity that our current sales still rely on the support of our gasoline vehicle series. In 2018, when the competition in gasoline vehicles is becoming increasingly fierce, we are facing great challenges."

"Our sales target for 2018 remains at 100 million vehicles!"

The meeting had just begun when Tan Jincheng made a startling statement: despite achieving sales of over one million units in 2017, he still set the overall sales target for 2018 at one million units, which sparked a great deal of discussion among the attendees.

"What do you mean? Is Boss Tan pessimistic about this year's car market?"

In January, the overall car market sold 241.98 million vehicles. In the SUV segment, the Yuechi A1 remained the champion, with monthly sales of 5.913 ​​units, far ahead of other brands.

New energy vehicles are growing rapidly. Of the 3.2 deliveries in a single month, the Weilai brand alone delivered 10465 of its five existing models, firmly holding the leading position in the new energy vehicle market with a 32.7% market share.

With such good data, why did Mr. Tan still set this year's sales target at 100 million vehicles?

Don't forget, in addition to these, Weilai also signed a cooperation agreement with Didi to jointly develop a Didi-owned model, the D1, suitable for ride-hailing vehicles, which will also bring considerable benefits to Weilai.

"Do you all think my goals are a bit conservative? No problem, let me explain."

The reactions below did not escape Tan Jincheng's notice. Wei Lai was no longer the same Wei Lai of a few years ago; he had considerable influence in the industry. Wei Lai's pessimistic outlook on overall car sales this year and his conservative expectations were definitely an explosive topic.

Not only the suppliers, but also Kluge and Wang Fengying, who were still in Ningbo, were somewhat taken aback by Tan Jincheng's remarks. Given Weilai's strong performance in January, the annual target should be at least 120 million vehicles.

Some even say that Weilai could challenge for the title of the number one domestic brand. Wang Fengying, in particular, finds it hard to understand. This year, Weilai's overall sales were only less than 80,000 units less than Great Wall's. Considering their bet, perhaps this young man really can do it.

Weilai's growth rate is not as explosive as Geely's, but it is steadily increasing year by year. Its main models are also very competitive, and it dominates the high-end new energy vehicle market. Weilai simply cannot compete with them.

Of the four cars on stage, one was clearly a mid-size SUV making its debut, obviously intended by Wei Lai to drive sales volume. This car had only been seen in the Ministry of Industry and Information Technology's application list before, and the outside world knew little about it except for its general outline during road tests.

"One million vehicles is an affirmation of our past performance in the gasoline vehicle market. It is the market's recognition of us. However, in the new era of new energy vehicles, the sales of gasoline vehicles can only represent our past performance."

"This is a new beginning. With the arrival of the new energy era, we will still maintain the same attitude as when we first entered the market in 2008. Admittedly, we have already accumulated a certain amount of experience in the new energy vehicle industry."

"Tesla's Shanghai Gigafactory project, like Apple's entry into China, will bring a greater 'catfish effect' and greater competition to the market. In 2018, we are not pursuing sales volume, but rather technological upgrades."

"Tesla is an excellent company with many things we can learn from. Its entry into China will bring great changes to the market. We welcome such an excellent competitor to join us. At the same time, we are also well prepared to face the upcoming market environment."

"At the same time, we also hope that our partners can realize this change, which is a great opportunity for us."

Tesla currently has over 95% of its parts sourced domestically, which is a very positive goal for the parts industry, and major parts companies have likely received this information.

"To grow and achieve mutual benefit with our supplier partners has always been our goal at Weilai. In 2017, the proportion of domestically produced parts in Weilai Auto was 55%, which is much higher than the industry average. In the coming years, Weilai will continue to increase the proportion of domestically produced parts until it reaches Tesla's standards."

Changxin's central control screen module, Xushen's aluminum alloy support components, Huaxiang and Jifeng's interior trim, Top's NVH shock absorbers, Sanhua's air conditioning and thermal management system, etc., are all signs of Weilai's localization.

Chairman Wei Lai's proposal to further increase the proportion of domestically produced goods undoubtedly excited the representatives of these listed companies on stage. The stock market has fallen too sharply recently, and they urgently need a boost.

Wei Lai expressed his willingness to follow up on Tesla's localization progress, which made them very happy.

"We don't need to worry about orders this year and next year."

Representatives from several companies in the audience laughed and said that the requirements for cooperating with Wei Lai were very high, but they were very supportive of suppliers' technological upgrades, and many equipment manufacturers were even willing to share the costs to improve the suppliers' technology.

Of course, the most important thing is that Wei Lai pays very quickly, without any complicated intermediaries. If the product is qualified and the payment is due, the money will be transferred immediately.

“In the past year, we have shortened the payment cycle for our supply chain partners, which now takes only about 90 days. The achievements of Weilai in China and even globally are inseparable from these partners.”

"We adhere to the attitude of cooperation and win-win, and improve efficiency and reduce costs through technological innovation. Only in this way can enterprises go further, the industry prosper, and consumers continue to receive the best products."

"Save where you should save and spend where you should spend. Getting suppliers to pay quickly is also one of our responsibilities. Everyone can be more motivated to make progress when they make money, right?"

Li Shufu and Wang Fengying, sitting in the audience, exchanged a glance, their eyes filled with helplessness: "This kid is mocking us."

The payment terms of these traditional car companies are generally around 120 days, some even as long as 180 days, and some are even more outrageous. This can basically be considered an industry unspoken rule, but Wei Lai broke this rule as soon as he entered the market.

In its early days, Weilai was just a small factory. No matter how much they caused trouble, it wouldn't have much impact. Besides, Weilai didn't have a production capacity advantage at that time, and its requirements were high. Paying money quickly was a must.

However, the fact that companies like Weilai, with their million-level production capacity and sales volume, insist on shortening payment terms is making things very difficult for traditional industries.

Tan Jincheng continued, “We will adjust prices to a certain extent this year, but we will not pressure suppliers to lower prices. In our view, cost control equals technological innovation to improve efficiency plus reducing all unnecessary expenses.”

"For example, regarding the luxury reception center, as you may have noticed, Weilai does not currently have a headquarters in the strict sense. In addition, we will control expenses such as advertising and executive offices."

"While protecting the interests of our suppliers, we continue to invest in research and development and production in order to provide consumers with better prices and products."

Li Shufu, Wang Fengying, and even Kruger were all twitching with excitement. It seemed that Wei Lai was planning to use price reductions to cope with the upcoming competitive environment that Tesla would face in its domestic production.

The boatman watching the live stream on the screen also had his eyelids twitching, while his good friends Yadi and the boss of Xinri, who were watching from the sidelines in the two-wheeled electric vehicle circle, couldn't help but laugh.

"This kid has finally set his sights on the automotive industry. That troublemaker is back."

Back then, they also suffered a lot when facing the price war from Flash. This guy is very good at using investment and integration to win over the entire supply chain system. To put it bluntly, he uses money to pave the way.

Once he establishes an industrial advantage, he will launch a price war. Tesla hasn't even entered the market yet, and he has already prepared a countermeasure. Musk, who is far away in North America, must not be happy to hear this news.
The tricks are still the same, but they are particularly effective. Coupled with his marketing methods, they make it very difficult for his competitors. Back when this guy was in the electric scooter industry, everyone was on edge, just waiting for him to cause trouble from time to time.

Now he's gone into the automotive industry, and FlashTech has been taken over by Zhang Xupeng. Compared to Tan Jincheng's manipulative style, Zhang Xupeng, who is more "conservative," is much easier to get along with, allowing them to enjoy a few years of peace.

That said, when they look back on those events now and compare them to the current state of the automotive and even mobile phone industries, it seems like they're not such a big deal after all.

A payment period of over 90 days is an absolute temptation for supply chain companies that have made huge investments. No matter how high the requirements are, they will try to squeeze in.

Furthermore, by improving their own technology, they will be able to gain more influence in the future.

"Looking at it this way, their mid-size SUV won't be expensive. Wow, this is really pushing the limits."

That's too ruthless. Not only did they lower the price, but they also made it clear that they wouldn't pressure suppliers to lower their prices. This has cut off everyone's escape route. Fortunately, there are still subsidies available.

Subsidies for new energy vehicles will not gradually cool down until 2020, but in any case, this is forcing other manufacturers to upgrade their technology. When a leading company with a 30% market share in the new energy vehicle market makes such a statement, the effect is very serious.

This has put pressure not only on car manufacturers but also on the supply chain; those who don't improve will be kicked out of the supply chain system.

This press conference was packed with information.

"I told you, don't be fooled by his smiling face and respect for us seniors, he can be ruthless when it comes to taking action."

"Haha, that's just like President Tan's style."

Wang Fengying knew all too well that this young man was very respectful to President Wei, and she could tell that it was definitely not an act, but that did not affect his persistent desire to find out more about her.

In terms of personal morality, this young entrepreneur at the height of his career is impeccable. In terms of social influence and contributions, he is second to none. However, it would be naive to think that he is harmless simply because of this.

The impact of today's press conference goes far beyond that, because Tan Jincheng is about to focus on introducing several of his models.

The real sense of oppression is coming.

(End of this chapter)