2003: Starting with Foreign Trade

Chapter 1008: After three years of silence, he made a stunning debut.

If we say that Yulai's competitor is BYD, then before 2020, Yuechi's biggest competitor was the Haval series.

However, by 2021, Yuechi's competitors were no longer limited to the Haval series. There were also the Changan CS75, Geely Boyue, and the Maodou Y, BYD Song DM, and Weilai's own ES3. All of these models squeezed the sales space of Yuechi A1.

Yuechi Auto has indeed lagged behind in the electrification process, but fortunately, its main competitors are also not far behind, and everyone is still at roughly the same level.

"From the perspective of competitors, the Yuechi series still has certain advantages, but the current trend is making our advantages smaller and smaller. The new car launch in September will be a key battle to test our transformation."

Chairman and CEO Wei Lai, who is jokingly referred to as the male protagonist of a wish-fulfillment novel on the internet, was also born in a third- or fourth-tier city. His family conditions were neither bad nor particularly good.

Tan Jincheng's life story is a testament to his transformation from an ordinary high school student to a global billionaire and industry leader.

As one of the male protagonists in the "cool" novel, Li Xiang's life experience is not much different from Tan Jincheng's. He earned enough money during his high school years to buy several houses in the local area, and his several entrepreneurial experiences were all successful.

At the age of 24, he was already worth over 100 million yuan. His life is unrepeatable, and his aura will not change because of Wang Fengying's status as an industry senior or her influence in the company.

Tan Jincheng had the right to be arrogant, and so did Li Xiang.

"They are still reaping the benefits of gasoline-powered vehicles, but they lag behind in certain technologies and consume a lot of the parent company's credits. In the current environment, the cost advantage of the Yuechi Group is getting lower and lower."

"Therefore, the parent company requires Yuechi Group to achieve a 20% sales ratio for new energy vehicles by 2022."

Under the dual-credit policy, Yuechi Auto, which mainly sells gasoline-powered vehicles, faces an annual credit shortfall of up to 20. The replenishment of these credits makes the cost advantage of the Yuechi series less obvious.

Without the credit replenishment from Yuechi Auto, Yu could make a lot of money by selling the credits accumulated from selling so many new energy vehicles to companies like Chery, Changan, Great Wall, and Geely, whose electrification trends are also slower.

Selling credits is much easier than selling a car.

Since the project was launched in Q4 2018, Yuechi Auto has gradually cut some peripheral models. Currently, the models on sale are several with a certain market influence and sales volume, with the flagship model being the Yuechi A1.

Yuechi Auto has focused most of its resources on the Yuechi A1, but it must be admitted that after reaching its sales peak, the sales of the Yuechi A1 have begun to decline year by year, and it is a fact that each year is worse than the last.

The reason why the Yuechi A1, an SUV model that focuses on cost-effectiveness, can still sell well is that its powertrain has been iterated more quickly compared with its competitors. Compared with its main competitor, the Haval H6, the Yuechi A1's self-developed 1.5T engine has achieved a thermal efficiency of 40%, while the Haval series still maintains a thermal efficiency of 38%.

In terms of fuel consumption, the Yuechi A1 is also lower than the Haval H6, and the transmission tuning is also much smoother.

Besides these features, the biggest highlight of the Yuechi A1 is that the new model is equipped with L2-level intelligent assisted driving, which is something that many gasoline-powered models, including the Haval series, do not currently possess.

"The competitors of the Yuechi A1 will no longer be traditional fuel vehicles such as the Haval H6, but rather BYD Song, Maodou Y, ES3, and more and more new energy vehicles in the future. This is a clear consensus."

Wang Fengying listened quietly with a smile. She was well aware of the problems Yuechi Auto was currently facing. The electrification process had been underway for several years, and even with a strong partner like its parent company, it hadn't yet gained a significant advantage. As the person in charge, she did indeed bear some responsibility.

However, Wang Fengying also had her own difficulties. As an independent sub-brand company with separate sales statistics, Yuechi also needed to ensure its own profits, and also had to consider the resistance from dealers and other stakeholders.

Dealers and 4S stores, accustomed to selling gasoline-powered cars, are aware of the trend towards electrification, but still do not want OEMs to make too radical a transformation, even though sales are still booming.

Robin can take a radical approach with Lotus because Lotus only has a small annual sales volume. Even if they were to abandon it entirely, with a successful IPO and a large cash reserve, Lotus would be able to sustain itself for a long time.

Yuechi Auto's annual sales volume has remained between 70 and 80 vehicles. Such a large sales volume, along with various other factors, has made Wang Fengying hesitant to be too aggressive.

But no matter what, slow is slow, and she could only listen to Li Xiang's criticisms of Yuechi Motors.

"Of course, we must also acknowledge the achievements of Yuechi Auto in recent years. As the group's first brand, it has supported the group's development and made great sacrifices for the group. In terms of electrification, it is almost a fresh start, and we must also acknowledge the various reasons."

"The successful development of the Galaxy platform is Yuechi Auto's greatest achievement, and we should also believe that the Yuechi A1 PHEV model developed based on the Galaxy platform will continue to receive market support."

Following the criticism, Li Xiang also affirmed Yuechi Auto's ability to execute its electrification strategy over the past few years.

The group that currently supports electrification in the market is attacking Yuechi Auto the most because, to date, Yuechi Auto has not released any electrified models.

Great Wall Motors, which has faced much criticism on its electrification strategy, has already launched hybrid models in its Haval series, while Yuechi Auto doesn't even have a basic converted electric vehicle. This has led the market and some consumers to believe that Yuechi Auto has become complacent and unambitious.

However, this is not the case. Since the project was launched in Q4 of 2018, Yuechi Auto has been slow to act, but its decision to transform has been very firm. As the saying goes, slow as it may be, it does not mean that nothing has been done.

The reason we didn't develop a gasoline-to-electric model was because it was at Tan Jincheng's request.

What era are we living in? Still using the old "converting oil to electric" trick to fool consumers is ruining their own reputation. Even if they are criticized for being unambitious, a national SUV brand should not do such a thing.

Even if electric power fails and is not accepted by the market, Tan Jincheng would rather shut down the Yuechi brand than allow this brand, which is of great significance to him and the company, to be ruined in its later years.

"I would like to say that Yuechi Auto has a period of technological reserve. The efforts of General Manager Wang and all colleagues at Yuechi Auto are commendable. I believe that Yuechi will also have a period of technological breakthrough, just like Weilai."

In terms of electrification, the Yuechi series follows the PHEV route, similar to Volkswagen's PHEV solution. It is based on the existing fuel vehicle platform and equipped with Jinshidai's P2 hybrid architecture, focusing on low fuel consumption and green license plates.

In terms of motor and electronic control systems, the Yuechi series directly transplanted the system from the currently popular Exeed S01 to reduce development costs. This is a long-term strategy, and for Weilai, which is not good at hybrid technology, it does require some time.

In fact, starting in July of this year, Yuechi's factory in Beicang has completed the transformation of some production lines, and PHEV models have their own dedicated production line. While retaining the production capacity of fuel vehicles, production schedules have been reduced.

The reason for continuing to produce gasoline-powered vehicles is twofold: firstly, market demand, and secondly, to give dealers a transition period and avoid triggering their resistance.

The Galaxy platform mentioned by Li Xiang is a platform exclusively for Yuechi. In terms of energy routes, the Galaxy platform covers all three: fuel, hybrid and pure electric, unlike BYD's DM system.

In terms of intelligence, the Galaxy platform aligns with its parent company, Weilai, equipping all models with L2-level assisted driving and reserving space for L4. In terms of cost control, it adopts lightweighting to reduce costs and focuses on hybrid models to achieve high sales volume.

The technology is positioned to optimize gasoline vehicles, extending their life cycle through lightweighting and high-efficiency powertrains, transitioning to hybrid technology, balancing the dual-credit policy with market demand, and also having pure electric vehicle reserves to prepare for future market changes.

In addition, the Galaxy platform also takes into account efficient performance management and global compatibility, such as meeting the EU R155 network security, North American SULEV emission standards, etc., and has targeted chassis optimizations for high temperature dust protection in the Middle East and high cold protection in Europe.

The Yuechi series' mainstream models range from 10 to 25 yuan. In addition to serving domestic users, the series also develops localized versions for markets such as Southeast Asia, the Middle East, and Europe.

To avoid competition, the two major brands, Weilai and Exeed, will focus their exports on the European domestic market, while the two major car companies, Yuechi and Zhidou, will focus their exports on South America, the Middle East, Africa, and peripheral markets in Europe such as Turkey.

The most important thing for Yuechi right now is naturally the launch of its first PHEV model, the Yuechi Galaxy P1. This is a hybrid vehicle that took two and a half years to develop and embodies the hard work of everyone at Yuechi.

In terms of appearance, the Galaxy P1 has undergone many changes compared to the original Yuechi A1. In addition to continuing the front face design that Yuechi has always had, some elements belonging to Weilai have also been added.

Compared to the more rugged design style of the past, the Galaxy P1 is more rounded. This is to distinguish it from the gasoline models of the Yuechi series. The naming system of the Yuechi series has also adopted a unified identification method this year.

The A series are gasoline-powered vehicles, the P series are hybrid vehicles, and the E series is preparing for future pure electric vehicles. The P series and E series are named after Galaxy.

In addition, Li Xiang's adjustments to the Yuechi series did not stop there. Besides having Wang Fengying highlight the marketing plan for the Xinghe P1, he also made significant changes to the optimization of the models.

The Yuechi series will continue to operate on a three-pronged approach, offering gasoline, hybrid, and pure electric vehicles, with only three models in each segment, priced between 10 and 25 yuan. This means the Yuechi series will have a price ceiling of 25 yuan, positioning it as a high-end model, somewhat similar to the BYD Han series.

In addition, the Tank series also follows this route. The Tank 300, Tank 500 and Tank 700 are priced higher than the Yuechi series as hardcore off-road vehicles.

坦克300作为越野车的入门级，售价为20万元至25万元区间，而500的定位则是中大型豪华越野SUV，售价在30万元至40万元区间。

As for the more upscale 700 series, it tests the market in the 50 yuan range. The three off-road vehicles enrich the Yuechi series' market positioning in the off-road vehicle field and compete with Great Wall, Jeep, Prado, Land Cruiser and other models.

The Tank 300, a budget-friendly off-road vehicle, saw explosive growth this year, with a total of 3.3 units delivered in the first half of the year. As a popular product, the Tank 300, with its affordable price and internet marketing strategy, has driven a 120% increase in the domestic hardcore off-road vehicle market.

The Tank 300 has single-handedly brought the little-known off-road vehicle sector into the mainstream, with countless female internet celebrities driving Tank 300s along the popular National Highway 318 and gaining fame online by shooting short videos.

Since the beginning of last year, the tourism industry has been hit hard, with most people stuck in one city and unable to find travel opportunities. On short video platforms, the videos made by video bloggers, whether it's cycling, off-roading, RV travel, etc., have become a source of psychological support for most people.

On Bilibili, cycling blogger Xu Yun became a sensation, with his well-produced videos gaining popularity among Bilibili users. Meanwhile, on Douyin, motorcycle blogger Pi You became a hit, attracting countless fans with his hot figure and urban cycling vlogs.

Meanwhile, hardcore bloggers in the automotive category, such as Han Lu's Travelogue, Ten Years Around China, Dad's Travel, and Chen Zhen's Self-Driving Tour, are highly recognizable and have great commercial value. It is worth mentioning that the blogger of Dad's Travel drives a Weilai L1.

As a former off-road travel guide host, Chen Zhen has professional endorsement. After transitioning to short video reviews of off-road vehicles, he has also collaborated with Tank many times, making him one of the key opinion consumers (KOCs) of the Tank series.

These video bloggers, despite their high reputation and controversy on the internet, do have considerable commercial value. For console manufacturers, collaborating with them carries certain risks, but the exposure of their products will definitely be enormous.

Take that hot female motorcycle blogger as an example. She has as many as 2000 million followers on Douyin. Her precise persona, cross-border marketing, and collaboration with Zoo Talk about Cars have brought her a lot of popularity.

Tank series has also tried to collaborate with this top motorcycle blogger, and the advertising effect was quite good. However, the Zoo Talking Cars series, which is a brand under Tan Jincheng, has not collaborated with them.

The main problem is that these opinion leaders are too greedy. Of course, they are not short of business deals. New brands are coming one after another, and they are generous with their spending. Even if one car company is lost, they can still make a fortune.

Yangzi Motors and Zhidou Motors also optimize their products along three lines, with each brand offering only three major series, divided into low, medium, and high-end segments within their respective price ranges.

"In terms of the selection of models, there may be fewer, but we are very good at cost control. Through our comparison of a series of data, we believe that instead of using a large number of models, we should focus on blockbuster models."

A phenomenal blockbuster model can be as effective as dozens of newly launched models; this is a conclusion reached by car manufacturers in their actual operations.

In addition to optimizing the product lines of its subsidiary brands, Weilai's main brand, Lixiang, has also undergone bold reforms.

The Exeed series targets the market below 20 yuan, which is the low-end model of Weilai. This year, the Weilai brand will only have the E series and L series in China. The E series focuses on pure electric vehicles, while the L series focuses on range-extended electric vehicles.

The Exeed series operates on a parallel model of pure electric and range-extended electric vehicles, but with pure electric as the main focus. The success of the Weilai L1 has proven the market potential of range-extended electric vehicles. Exeed already had plans for range-extended electric vehicles, so it is only natural to launch range-extended electric models priced below 20 yuan in the future.

The L series also plans to have three models: L1, L6, and L9. The L1 is positioned as a mid-to-large-sized six-seater SUV, while the L6 is also positioned as a mid-to-large-sized six-seater SUV, but its body size is slightly larger than that of the L1.

As for the L9's positioning, it is a flagship full-size SUV. In any case, all three models have a body length of over five meters, and their main selling point is a large interior space.

Compared to its subsidiaries, a parent company with two brands has more vehicle models planned. For example, the ES series focuses on SUVs, while the ET series focuses on executive sedans. The ES series already has the ES3, ES6, and ES8 in its product lineup, and no more models will be added in the future.

The ET series will continue to develop new models. In addition, the main brand of Weilai also has development plans for MPVs and station wagons. The planned Weilai overseas factory will mainly produce the modified Exeed S01, ET5 and station wagons.

Although station wagons don't sell very well in China, they are very popular in Europe.

Welai will shift the R&D of some of its models to Germany to increase sales in Europe through localization, which will enhance Welai's overseas position, essentially making it a subsidiary of Welai.

As for Proton and Lotus, the two peripheral brands, they have little to do with Wei Lai due to their shareholding structure. Today, they are mainly attending the meeting as observers, and Li Xiang has not made any demands on the operation of these two brands.

In gaming terms, Proton and Lotus are just there to support the US. Proton will definitely focus on the Southeast Asian market in the future. They're too lazy to design new models. They'll just introduce some of the best-selling models from the US, change the Proton logo, and test the waters in Southeast Asia.

This also includes the three major brands: Yuechi, Yangzi, and Zhidou. To use Li Chunrong's usual joke with Tan Jincheng, Proton is just a shell for Weilai in Southeast Asia. Any brand under Weilai can be called Proton just by changing its logo.

The Malaysian government has some reservations about this model. Proton is a national brand in Malaysia, and they are definitely not comfortable with it becoming a shell for Malaysia overseas.

However, they also know that with their R&D capabilities, there is no possibility of originality. Rather than having a disagreement with the controlling shareholder on this matter, they might as well make money together happily.

Even though the genes have been changed, it's still the Proton brand, isn't it?

Compared to developing other markets, the Southeast Asian market was much easier, as it was all handed over to Proton. However, Tan Jincheng wasn't particularly concerned about the Southeast Asian market. This market was somewhat of a double-edged sword, not as vacant as the African market, nor as wealthy as the Middle Eastern market.

Handing it over to Proton not only gave Proton a sense of presence but also freed up Wei Lai's energy.

Today's meeting is significant for the Weilai Group, and it is also an important meeting for Li Xiang to establish his authority internally. The entire meeting was chaired by Li Xiang, and Tan Jincheng chose to sit in and listened, which made him feel very relaxed.

The meeting lasted all morning. After the lunch break, Tan Jincheng kept Li Xiang and Wang Fengying behind in the afternoon. With less than two months until the launch of Xinghe P1, it was time to launch a large-scale marketing campaign for Xinghe P1.

"Marketing must first change the user's perception. The image of the Yuechi series is too deeply ingrained in the minds of consumers. How to make consumers accept the status of the king of gasoline cars as a rising star in new energy vehicles is a very important point."

"Our first task is to focus on pricing. This time, we'll use the slogan of equal pricing for gasoline and electric vehicles to get consumers to accept our transformation."

Tan Jincheng is an independent entity within the entire Weilai system, while Wang Fengying's position within Weilai is similar to that of the number two. CEO Li Xiang controls the overall operations, and Wang Fengying is under Li Xiang's jurisdiction but not under Li Xiang's direct control.

Within the Yuechi system, Wang Fengying is the absolute number one figure. Li Xiang has the authority to guide Yuechi Auto, but whether or not he listens to him is up to Wang Fengying. Today, Wang Fengying's acceptance of Li Xiang's criticism and the optimization of Yuechi Auto are based on the results of previous discussions between the two parties.

The relationship between Wang Fengying and Li Xiang was deliberately orchestrated by Tan Jincheng as a form of checks and balances; Tan Jincheng was not afraid of a conflict erupting between them.

"Priced at 15.48 yuan? Isn't that the starting price of the BYD Song DM?"

Wang Fengying smiled and said, "Yes, we originally planned to price it at 15.98 yuan. That way, with local subsidies and interest subsidies, we could make it the same price as gasoline cars. But now it's actually cheaper than gasoline cars. We also need to make some adjustments to the price of gasoline cars."

Tan Jincheng smiled and asked Li Xiang, "Was this your idea?"

Li Xiang chuckled and said, "Yes, it was my idea. Since we want to make a splash in the hybrid vehicle market, targeting the BYD Song is the best way. Of course, we should also target the price. That way, it will generate more buzz."

"Setting the price lower also has its advantages. This year, SUVs no longer have such a high growth rate, and since this is our first hybrid model, a lower price will be more conducive to promotion."

Compared to Wang Fengying's low profile, Li Xiang is clearly much more high-profile. This pricing strategy shows that he is ready to engage in a war of words with BYD.

Because apart from having the same starting price, the Galaxy P1 is comparable to the BYD Song DM in terms of pure electric range, combined fuel consumption, powertrain, 0-100 km/h acceleration, and fast charging power.

On paper, the specifications of the later-released Galaxy P1 are even superior to those of the BYD Song DM. As for market feedback, that remains to be seen.

"Alright, let me see what you're planning to do."

(End of this chapter)