2003: Starting with Foreign Trade

Chapter 916 If we're going to play, let's play big!
P.S.: It's the last day, don't waste your monthly votes, please vote for me!
Geneva.

In early March, this "small city" with a population of about 20 welcomed its first busy season of the year, with a large number of tourists from all over the world and car company teams flocking to this international metropolis.

Inside the airport, a group of about 15 people with Asian faces were chatting in the waiting area. If you looked closely, you would notice that the core of this group of Asian faces was the young face surrounded in the middle.

However, the pedestrians coming and going at the airport don't seem to care much. This situation, like today's, has been happening frequently lately, and it's clearly the work of some car company staff who are present at the exhibition.

Participating in an auto show is a complex process for an automaker, involving a core team responsible for marketing and public relations, sales and account managers, senior executives, and brand representatives.

The technical team is led by engineers, and the logistics and operations team, as well as logistics and vehicle management teams, and there are also media, logistics, and other support teams.

The teams range from a dozen to nearly a hundred people. This time, Wei Lai was personally led by Tan Jincheng, who organized an 80-person team for the exhibition. This is considered a relatively large team among many car companies, comparable to that of a certain German luxury brand.

Other car companies, unlike Weilai, did not have the financial resources, but each of them sent a team of more than 40 people. Including Weilai, a total of five car companies sent more than 260 staff members.

Wei Lai was personally led by Tan Jincheng, and other car companies were not to be outdone. Either the CEO came forward or the founder took the stage directly. Li Shufu of Geely even came to Europe after the Chinese New Year. However, their trip was not entirely due to this auto show.

"President Li is awesome! You guys have done something big right at the start of the year. Impressive!"

After Tan Jincheng and his group chatted for more than ten minutes at the airport, Li Shufu's plane landed, and the two groups finally met.

"Haha, compared to you, I'm nothing."

Although he spoke modestly, Li Shufu's smugness was impossible to hide. Like Wei Lai, Geely also enhanced its strength through various mergers and acquisitions. The Volvo acquisition back then caused a sensation around the world for several years.

The successful acquisition of Volvo and the subsequent years of assimilation marked the beginning of Geely's move away from Emgrand and towards a period of rapid growth.

"I can only make some noise domestically; internationally, I still need to rely on you, Mr. Li."

In late February, the German Federal Financial Supervisory Authority (BaFin) officially ruled that Geely's acquisition of Daimler, the parent company of Mercedes-Benz, was a normal acquisition, which means that Geely has now officially become Daimler's largest shareholder.

Despite Daimler's explicit rejection of Geely's offer to acquire a stake, Geely, through its overseas subsidiaries, acquired 9.69% of Daimler's shares—a total of 1.036 million voting shares—for a staggering $90 billion in the primary and secondary markets.

At this point, Daimler finally resigned itself to its fate, stating through a spokesperson: "We are delighted to welcome another long-term investor."

Li Shufu waved his hand: "Haha, let's not talk about this anymore. Let's go back to the hotel."

Why did Geely have to spend so much money to acquire Daimler's shares? It's certainly not the purely investment-oriented approach that Daimler's spokesperson described. Why would they spend $90 billion to buy your stock when they could do so many other things?
The reason for this "forced sale" is simply that Daimler has something Geely needs.

The acquisition of Daimler's shares and becoming its largest shareholder was largely due to Wei Lai's presence, a fact that Tan Jincheng was well aware of. The two companies had many collaborations, but competition had always existed, especially since they were both located in Zhejiang Province, making their relationship much more delicate compared to companies like BYD and Chery.

As a global automotive company, Daimler Group also possesses leading electric vehicle battery technology, and has consistently been at the forefront of the industry in the fields of lithium-ion battery technology and fuel cell technology.

Last year, Daimler invested €5 million to build a large-scale super battery factory and planned to operate at least five battery assembly plants by 2019, three in Germany, one in China, and one in the United States. At the same time, they also invested an additional $10 billion in their 20-year-old factory in Vance, Alabama, to expand the factory in order to produce pure electric vehicles and battery packs for the EQ sub-brand.

In China, as is well known, due to a series of changes in policies, environment, and consumer market, the domestic car market has become the largest market for electric vehicles, and WooLong and BYD have made a fortune in this sector.

As a leading company in the automotive industry, Geely is naturally unwilling to lag behind and has multiple projects in the field of new energy vehicles, such as the Changan New Energy project with an investment of more than 200 billion yuan and the new energy factory built with an investment of 326 billion yuan.

They also collaborated with companies like Changan and Keliyuan to develop new energy powertrains, and reached an agreement with Jinshidai to jointly build a battery factory.

Even so, Geely, which started its efforts later than BYD, has always faced a stumbling block in battery technology.

Without your own technology, it's useless to cooperate with anyone. Jinxin Times adopts an open cooperation model, but in the process of business cooperation, Tan Jincheng is not stupid. How could he possibly give away all of his most advanced technology?

The most advanced battery technology of Weilai has never been in Jinshidai, a subsidiary of Weilai, but in the battery project department of Weilai Research Institute, in the doctoral stations of various universities that cooperate with Weilai, and in research and development institutions around the world.

If Geely wants to maintain an equal partnership with Weilai, it must offer some technology in addition to money. Without technology, even with equal shareholding, they will be at a disadvantage in terms of influence.

By the way, the location of the battery factory with Weilai has been basically decided. Geely and Weilai have both decided to place it in Jiangcheng, forming a complete industrial park with the Lotus factory.

However, besides battery technology, Geely, as the world's largest commercial vehicle manufacturer, also has something it wants. Since 2016, Geely has been laying out its plans in the commercial vehicle field. Today, it holds the position of the world's largest commercial vehicle manufacturer and the largest shareholder of the second largest commercial vehicle manufacturer (Volvo).

With 100% ownership of Dongfeng Nanchong Automobile in China, Geely is now qualified to make a push in the commercial vehicle sector.

As the saying goes, seeing his old rival BYD and rising stars from the same province making a fortune, how could Li Shufu, who is committed to globalizing Geely, not be tempted?

In 2017, which type of vehicle was the most profitable in the new energy vehicle industry chain? It wasn't passenger cars, but commercial vehicles!
Commercial vehicles, including electric buses and logistics vehicles, receive huge subsidies, especially as major cities have successively upgraded their buses to electric versions in recent years.

In 2017, the central government's subsidy standards stipulated that pure electric passenger vehicles with a range of 250 kilometers or more would receive a subsidy of approximately 4.4 yuan per vehicle, while the subsidy for an electric bus could reach as high as 18 yuan, which was 4.1 times that of pure electric passenger vehicles.

In 2017, the subsidy was even higher. BYD has its own commercial vehicle company, and Weilai also has Huanghai Bus. With Huanghai Bus and its accumulated reputation, as well as Weilai's leading position in pure electric technology, the company can leverage its advantages.

Huanghai Bus, which started developing pure electric buses very early on, has now firmly established itself among the top ten sellers in the domestic pure commercial vehicle sector, holding a significant position in the fields of buses, tourist vehicles, and logistics vehicles.

Throughout Ningbo, Zhoushan, Jiaxing, and even Luzhou, Yicheng, and Chuzhou in Anhui Province, the electric buses that can be seen everywhere are almost all supplied by Huanghai Bus.

Huanghai Bus has a very high market share in some cities in Zhejiang, Anhui and Jiangsu provinces. In addition, Huanghai Bus also cooperates with express delivery companies such as SF Express to help them develop electric vehicles suitable for the express delivery industry.

Li Shufu admires Tan Jincheng's long-term vision. This young man, while ensuring the sales of gasoline vehicles and supporting the company's formal operation, did not stop there, but instead invested all the profits he earned into the development of the new energy vehicle industry.

Even before the establishment of Weilai Automobile, he had already begun to lay out the new energy industry. The acquisition of Huanghai Bus was even more ingenious. By replacing electric buses, Huanghai Bus received a large amount of government subsidies.

These subsidies are the driving force for the advancement of the new energy industry in Weilai, while Geely is already a step behind. Now, Huanghai Bus has almost taken over the entire bus market in Zhejiang Province.

Although Geely, Weilai, and Zhongtai, three companies from Zhejiang Province, maintained a certain tacit understanding and did not encroach on each other's territory, the problem was that before 2017, neither Geely nor Zhongtai had any advantage in the bus industry.

If you don't use Huanghai buses, you can only use BYD, Yutong, and other companies. Compared to those, Huanghai buses from Weilai are more familiar to us. Besides, they have advantages in both quality and price.

In previous years, commercial vehicles were a major area of ​​subsidy fraud, and Huanghai Bus was also a key target for investigation. However, after a thorough investigation, it was found that although they had minor problems, they were not enough to constitute subsidy fraud.

This alone left a deep impression on the industry and its upper echelons.

The industry is puzzled as to how Huanghai Bus managed to do it, or rather, how Tan Jincheng controlled his desires. Meanwhile, the higher-ups in charge of subsidies believe that although the young man has many tricks up his sleeve in business, he is very honest.

The word "honest" is a compliment that, when applied to an entrepreneur, can bring considerable benefits to Tan Jincheng and his company.

Furthermore, with increasing criticism of online lending in recent years, Orange, currently the only internet company in the industry that has not engaged in online lending, has made some leaders who are not so business-savvy feel that Tan Jincheng deserves the title of "honest".

Indeed, these days the three major telecom operators are all trying to find ways to lend money online, and their unscrupulous hands have even reached into schools, causing many social incidents and having an extremely bad impact.

As the main players in the online lending industry, internet companies have become increasingly discredited, and their monopolistic practices have almost reached the point where they are universally condemned.

Ordinary people rarely see the technological investment behind internet companies, but online lending can have a real impact on their lives. In the past, people joked that the end of the internet was advertising, but now it has become online lending.

"Can you tell me the price of the ET5 now?"

On the 24th, the court ruled that their acquisition of Daimler was legal, and on the 28th, Li Shufu flew to Stuttgart—an astonishingly efficient process.

After spending about a week in Europe, Li Shufu finally saw the actual production ET5.

The design impressed him, and the performance was as good as ever. The only thing he was unsure about was the price. The Weilai brand, which has always been positioned as a high-end brand, has always had relatively high prices.

In addition, Weilai has been focusing on the SUV market and has not been involved in the sedan market. The Weilai brand only has one executive sedan, the ET7.

However, this sedan didn't sell very well, and car forums joked that Wei Lai should just stick to making his SUVs, as they couldn't succeed in the more competitive sedan market.

And now, they're actually bringing their brand-new B-segment sedan, the ET5, to an international auto show, with an exhibition team as luxurious as that of German luxury brands.

Their ambitions are enormous.

"Mr. Li, shall we take a guess?"

Inside the hotel, executives from several car companies sat around a coffee table, enjoying coffee and the view outside. Geneva is an internationally renowned city.

The scenery and climate are pleasant, and many multinational companies have their headquarters here. The watch and luxury goods industry is the mainstay of the local economy.

Tan Jincheng, who had been keeping everyone in suspense, was now thinking about what gifts would be appropriate to bring home.

The CEOs and bosses of several car companies were speechless as they looked at Tan Jincheng's absent-minded expression.

"Starting at 25?"

Li Shufu tentatively gave a figure: the B-segment sedan market can be divided into three main segments: domestic brands, joint venture brands, and luxury brands. Mainstream joint venture B-segment sedans, such as the Volkswagen Passat, Honda Accord, and Camry, are generally priced between 18 and 30 yuan, including new energy vehicles.

For example, the Ford Mondeo Hybrid has a market guidance price of 17.98 yuan to 31.98 yuan.

Luxury brands are even more expensive, ranging from 28 to 50 yuan, such as their Volvo S60L, with a guide price of 27.69 to 39.09 yuan.

The BMW 3 Series is priced between 28.8 yuan and 48.69 yuan.

定价最低的就是自主品牌的B级轿车了，博越指导价11.98万元至17.98万元，今年上市的红旗H5指导价也定在14.98万元至19.58万元。

Overall, domestic brands target the market below 20 yuan, joint venture brands target the market between 20 and 30 yuan, while luxury brands dominate the market above 30 yuan.

Li Shufu's offer of a starting price of 25 yuan is based on Weilai's consistent pricing strategy and their initial focus on capturing market share in the joint venture vehicle market when the Yuechi A1 was launched.

In addition, the price reduction strategy implemented before Lunar New Year's Eve was also taken into consideration.

This B-segment sedan boasts an exceptionally stylish design, even more imposing than the Audi A4L in terms of appearance. It's a pure electric model, backed by WIL's consistent quality and service guarantees, and features an intelligent driving system that surpasses other companies.

Now priced at around 25 yuan, it can compete with joint venture brands and even the Audi A4L.

"Haha, what's the rush? You'll find out soon enough. But we'll sell them for a bit more in Europe and a bit less in China."

"Of course, isn't that just stating the obvious?"

It's like he said nothing at all. Li Shufu couldn't help but complain, "With tariffs, it's hard not to sell at a high price, just like imported car models entering the Chinese market."

Unless, of course, Wei Lai also has his own car factories overseas.

"The body design features dimensions of 4790 x 1960 x 1499 mm and a wheelbase of 2888 mm."

"The standard version uses a single-motor rear-wheel drive design with a maximum power of 235 horsepower, while the all-wheel drive long-range version uses a dual-motor four-wheel drive design with a maximum power of 346 horsepower."

At the Geneva Motor Show, in the Weilai booth, which was decorated with a strong sense of technology, Tan Jincheng was personally introducing the world premiere of the mid-size sedan ET5.

Within Weilai, the previous ET7 was just an experimental product, while the ET5 is their true entry into the pure electric car market.

In terms of power, the ET5 is almost a direct competitor to the Model 3, and its target market is very clear.

在续航能力方面，ET5是要强于毛豆3一些的，标准版354公里与毛豆3一样，而长续航版本的560公里则是要优于特斯拉498公里的。

In terms of intelligent technology, the ETF is equipped with the latest intelligent driving and interaction systems from the US, such as active braking, lane keeping, adaptive cruise control, and so on.

In terms of safety features, the Weilai ET5 boasts a high-strength body structure, an NHTSA five-star safety rating, standard ABS/EBD/TCS across the entire range, multiple airbags, and a commendable vehicle stability system.

The latest fast charging technology released by Weilai before the Lunar New Year is also applied to the ET5 series.

These are comparable to the Model 3, but compared to Tesla's usual bare interior, the style of the WooLan is obviously much more "luxurious". Its unique design aesthetics and excellent performance attracted media and visitors from all over the world as Tan Jincheng introduced them one by one.

"This kid's English is getting better and better."

"That's right. There are some things I don't understand, and I don't know how he memorized them. When it comes to hard work, we are really not as good as him."

Li Shufu and his generation stayed in China and worked diligently in their businesses. After going abroad, they paid great attention to their image and never lacked a sense of collective honor. Although they were not in the spotlight, they were still very happy to see the confidence shown by Tan Jincheng and Wei Lai.

“That’s right. When I came back late last night, I could still hear noises coming from his room. I guess he was memorizing his script.”

"What are you doing out in the middle of the night? You couldn't resist, could you?"

"Keep your voice down and mind your image."

On stage, Tan Jincheng was still giving a fluent introduction to the ET5. These "old guys" were right. Over the years, he had worked harder than many people, studying car knowledge, cramming for improvement, and actively improving his spoken English.

Geely has a heart set on going global, and so does Weilai. There will certainly be many occasions like today in the future. When in Rome, do as the Romans do. If you speak Chinese, people won't understand. Even with simultaneous interpretation, it just doesn't feel the same.

Now that he can speak in English, he can make most of the media and exhibitors present feel familiar with him, which is more conducive to the promotion of his business.

Few people would enjoy wearing headphones or having a translator with them during everyday conversations.

"I couldn't understand anything he said, he just wouldn't tell me the price, it was so frustrating!"

"Haha, we should be there soon."

Not only Chinese representatives, but also media and exhibitors are paying close attention to the price of the ET5. This car is comparable to the Model 3 in terms of both size and performance.

With the Maodou 3 still unable to be delivered, the Weilai ET5 might not be a bad alternative. After all, it takes a year to wait for a Maodou 3, and you should at least drive the whole car during that year, right?
"What's the starting price of the Edamame 3 in Europe? Is it 5 euros or something?"

The DIY 3 is priced at $3.5 in North America, which is about RMB 24. In Europe, it is also subject to tariffs and other restrictions, with a starting price of €5, which is about RMB 40.

This is an average starting price; the actual price may vary depending on the taxes and fees in different countries.

Li Shufu squinted and said, "It's probably much cheaper than Maodou 3. This kid has big ambitions."

"Here it comes, here it comes, I understand this sentence, they're about to announce the price."

The ET5 starts at €3.98 in Europe! That's more than €1 cheaper than Tesla, which translates to a starting price of around 30 RMB!

"This is bad. This kid has set the price so low, it should be even lower in China. Joint venture brands must be having trouble sleeping. It might even affect the sales of your Boyue."

When Tan Jincheng announced the starting price for the European region, there were gasps of surprise from the audience; the price was clearly unexpected.

Tan Jincheng was also very satisfied with the commotion on site; this was exactly the effect he wanted.

When competing with luxury brands for market share or engaging in price wars, the biggest taboo is to gradually lower prices. Luxury brands have enough experience and can play along with you slowly, but if an emerging brand lowers prices little by little, consumers will directly lose confidence in the brand.

The Edamame 3 has received so many orders, but delivery has been delayed. The ET5, which is positioned to compete with the Edamame 3, can only compete on price if it wants to take over the Edamame 3's market share, in addition to matching its performance.

As for the price, it must be right from the start to make consumers feel the sincerity. Giving them a big slap right away is more memorable than a gentle slap.

After the starting price for the European region was announced, Li Shufu's eyes, which had just been smiling, became more serious.

He expected the starting price of the Weilai ET5 to be lower than that of the Maodou 3, but he didn't expect it to be so much lower. Needless to say, he will also use the price as a weapon in the domestic market, giving everyone an unimaginable price.

The highest guide price for the Geely Boyue is only 17.98 yuan. Logically speaking, no matter how cheap the Weilai ET5 is, it shouldn't have such a starting price. But the problem is that new energy vehicles are eligible for subsidies.

This thing is a pure electric vehicle with a long driving range, so both users and car manufacturers can almost certainly get the highest level of subsidies, not to mention that the battery is their own.

In the new energy vehicle sector, this guy really knows how to play the price war game.

Of course, he's not worried about the Boyue, since they're in different segments and target different user groups, but what about the Lynk & Co 01 if things are done this way?

Damn it, I was still a step too late.

Unbeknownst to Li Shufu and others, the ET5, which made its global debut at the Geneva Motor Show, had already begun large-scale promotion in China, and pre-order information for the ET5 was also available on the Weilai APP.

Starting price: 21.98 yuan!

According to the latest subsidy policy, users who choose ET5 can receive a national subsidy of 4.5 yuan. If they trade in their old car, they can get another 1 yuan, plus some local subsidies, corporate subsidies, and other miscellaneous benefits.

If we take the highest standards into account, the starting price of the Weilai ET5 could be as low as 16 to 17 yuan.

Once the domestic price of the Weilai ET5 was announced, a host of joint venture models were in a state of utter disbelief, and the impact went far beyond that.

Tesla's back-end data suddenly revealed that their orders in Europe appear to be experiencing a peak in cancellations.

The day after the Geneva Motor Show, Tesla's stock price fell by nearly 1%. From then until March 20, when the show ended, Tesla's stock price fell on seven out of nine trading days, with a total drop of 6.55%.

The pricing of the ET5 surprised everyone, and Tan Jincheng, who was on his way back to China, also earned a new nickname: "Price Butcher".

However, what the public is curious about is, can they make a profit with such a low price?
(End of this chapter)