2003: Starting with Foreign Trade

Chapter 1049 If you want to wear the crown, you must bear its weight.

The biggest suspense in the automotive industry at the end of the year is what kind of sales record Weilai will set this year.

"Two million vehicles is an exaggeration, there's no need for that."

Based on the trend of the first half of the year in December, the total sales of new energy vehicles worldwide have exceeded 12 million units, accounting for 14% of the global market share. Meanwhile, the total sales of new energy vehicles in China will approach 700 million units, accounting for 70% of the total sales of new energy vehicles worldwide.

In recent years, the growth rate of new energy vehicles in my country has been significantly higher than that of the global new energy vehicle market. In just a few years, it has developed from a "marginal" role into an indispensable force in the new energy vehicle market.

Driven by new energy vehicles, the status of China's automotive industry in the global market has undergone a significant change, from being relegated to the sidelines of the low-end market to being able to pose a threat to BBA (BMW, Mercedes-Benz, and Audi) in the high-end market.

From both an economic and morale perspective, the new energy vehicle strategy aligns with the national interest, and Weilai Motors plays a crucial role in this endeavor.

The phenomenal product Exeed S01, priced between 10 and 15 yuan, represents the maturity of my country's pure electric technology, while the L series has had a near-destructive impact on BBA (BMW, Mercedes-Benz, Audi) in the range-extended electric vehicle market.

Since deliveries began in September after the end of August, the L9 has performed exceptionally well, with over 10,000 units delivered in September alone, and over 9000 units delivered in both October and November. Deliveries in December are also expected to exceed 10,000 units.

A car priced around 400,000 yuan can achieve sales of nearly 40,000 units in just four months after its launch. Even BBA (BMW, Mercedes-Benz, Audi) would find it difficult to achieve such results. Moreover, the L9 embodies more than just the popularity of this model.

Most new models need to go through a production ramp-up process before they are launched, and the Exeed S01 is no exception. Before the Exeed S01 officially started delivery, Weilai made an extremely risky move, which was to prepare a large amount of inventory.

This move is very risky. If the Exeed S01 is met with a lukewarm reception upon its launch, this batch of inventory cars will become an extremely unstable factor. Given Weilai's size, although it may not have a fatal impact on the company like the Xiaopeng G9, it will still be enough to give Weilai a hard time.

Inventory and new production lines will become a burden for Weilai after the initial lukewarm reception to the market, rather than providing a steady stream of cash flow as they do now.

The reason why most emerging brands are so fragile is largely due to this: after a product is launched, whether it sells well or not is a huge test.

The reason for launching the Exeed sub-brand is also because of this. As a phenomenal product, the Exeed S01 could only maintain a monthly delivery volume of 1.5 to 1.6 units for a long time, which was simply due to the ramp-up of production capacity.

After the L9 was launched, with limited inventory, it was able to maintain a stable monthly delivery of 8000 to 10,000 vehicles, with production capacity fully utilized from the beginning. This alone is enough to make other car companies take notice.

The L9 embodies not only WIL's keen market insight, but also its strength in intelligent manufacturing.

"Well, it is indeed a bit difficult, and somewhat unrealistic."

As a leading domestic new energy vehicle manufacturer, Weilai also received considerable attention off-site. At this Luzhou Intelligent Vehicle Summit, in addition to participating in industry discussions, Weilai also received some hints about how to achieve sales of 200 million vehicles this year.

This includes inflating sales figures. By using certain promotional methods, sales can be increased while simultaneously inflating them, such as selling used cars with zero kilometers.

Every December, many car companies see a significant increase in sales, far exceeding their annual average sales. This is largely due to the fact that one of the biggest ways to boost sales is by selling zero-kilometer used cars.

The term "zero-kilometer used car" is self-explanatory: a vehicle that has completed registration procedures but has actually driven very little or no mileage. Legally speaking, zero-kilometer used cars fall under the category of used cars because they have already completed their initial registration.

Buying a used car with zero kilometers from a dealer is usually 10% to 30% cheaper than a new car, with some models seeing even larger price reductions. It may also be exempt from purchase tax, saving consumers a lot of money on the purchase.

In addition, the cars are in relatively new condition, giving consumers the experience of a nearly new car. Coupled with fast delivery, customers can pick up the car immediately, which are all advantages they have in the used car market.

Of course, since it is a used car, it also has all the disadvantages of used cars: reduced warranty, difficulty in verifying the vehicle's origin and actual condition, potential after-sales problems, and low residual value, etc.

Some unscrupulous dealers even sell these cars as new ones, and unsuspecting consumers have no idea that they are not being sold. When it comes to the extent of the unethical practices in the used car market, consumers in Ningbo are well aware of it.

Zero-kilometer used cars are not a new thing in the industry. They have existed since the 1990s. In the early days, they were mainly used by manufacturers and dealers to clear their inventory. Between 2019 and 2020, when China V was upgraded to China VI emission standards, a large number of zero-kilometer used cars entered the market.

In 2019, policies began to encourage the export of used cars. Some car dealers registered new cars in China and then sold them to overseas customers through parallel export. These vehicles are also considered zero-kilometer used cars.

It's not like Weilai hasn't done this before. Take the North American market, for example. Weilai doesn't have its own complete vehicle business, but that doesn't mean there aren't Weilai's electric vehicles in the North American market. Some of them enter the North American market as zero-kilometer used cars.

From an objective point of view, zero-kilometer used cars have a certain necessity. They are a supplement to the sales methods of manufacturers and dealers, and are also more friendly to knowledgeable users.

However, Tan Jincheng clearly understands that this is not how you boost sales. If the company relies heavily on zero-kilometer used cars, it will inevitably fall into an abyss. Any crooked trick will become addictive if used for too long.

Wei Lai's cars are selling well now, and his position is secure, so there's no need for him to care about these empty titles. Tan Jincheng just pretended not to understand some of the hints.

Throughout December, Weilai maintained its existing production and sales pace, achieving global sales of 235,200 vehicles in a single month, maintaining sales of over 230,000 vehicles for two consecutive months, and winning the global sales crown with 1,863,500 vehicles sold throughout the year.

"So, do you still remember the bet we made at the beginning of the year?"

Li Xiang nodded slightly awkwardly. Wei Lai's sales this year have far exceeded the market and the original sales expectations, but the sales of the L series have not met expectations.

"Haha, good that you admit it, bring it all over."

Li Xiang glanced at the executives of Team L present, rolled his eyes, and said, "Bring them all out."

After saying that, he took out 100 yuan in cash from his pocket. The other executives also took out 100 yuan in cash that they had prepared beforehand, not knowing whether to laugh or cry. The boss really remembered the bet they made back then.

"Hehe, it's been a long time since I've seen cash."

Looking at the several hundred yuan in cash in their hands, the brand-new red banknotes with their sharp edges, no one would complain about the feel of them.

With the change in payment methods, cash is rarely seen anymore, let alone for people like them.

Li Xiang sighed, "That's right, I even had someone specially go and get it."

Last year, the L series performed exceptionally well, maintaining its absolute position in the market. This has given Li Xiang and the L team great confidence in their sales expectations for this year, with some even predicting 20 or 25 units.

Tan Jincheng knew that the market was far from what they had imagined, but he didn't want to set the target too low and dampen the team's enthusiasm, so internally they planned to sell 20 vehicles.

However, Tan Jincheng also expressed his own expectation, which was 15 vehicles. This difference in expectations led to the bet between them.

"Indeed, we were overconfident and underestimated the influence of Seres and Chrysanthemum."

Li Xiang also took the lead in reflecting on the situation, noting that the extended-range electric vehicle market underwent rapid expansion, intensified competition, and refined product positioning in 2022, becoming one of the fastest-growing segments in the market.

Last year, with a total of 20 vehicles sold, Weilai not only dominated the market but also occupied the most profitable high-end segment. However, the changes this year were unexpected by the L-series team, or rather, they were not fully prepared for them.

From a single price point to a full price range, Seres' rise in the high-end market has broken the monopoly of Weilai.

"There's no need to reflect on anything. I'm not here to nitpick. If you want the range extender market to remain healthy and positive, it's impossible for one company to dominate. Even if Seres or Chrysanthemum doesn't exist, other manufacturers will emerge."

Seres achieved sales of 13.91 new energy vehicles in 2022, with its two range-extended electric vehicle models in the Hongtu series accounting for 7.5 of those sales, making it the most successful emerging brand in the market in 2022.

Most importantly, Seres has entered the most profitable segment of the new energy vehicle industry through the Hongtu series, and the X7 has given Seres the courage to enter the high-end market.

At the last Luzhou Summit, one of the main topics was that the Luzhou government wanted to facilitate cooperation between JAC and Volkswagen. With the reduction of contract manufacturing by Wenjie and the unclear cooperation with Volkswagen, JAC's market positioning was quite awkward.

It has to be said, a biological son is truly a biological son.

"That's true. We need to expand the market and bring in more players, otherwise it will always remain a niche market."

The L series sold 13.3 units throughout the year, which did not even meet Tan Jincheng's expectations. Of course, there are some objective factors at play, including the rise of Seres and the replacement of the L1 model.

To maintain competitiveness, the L1 series underwent a generational upgrade in the second half of the year, resulting in a sales interruption of several months. Otherwise, the sales target of 15 units would have been achievable.

"It's good that you understand this: what we want to do is not monopolize, but join forces with other companies to expand the market and maintain a healthy competitive environment. Monopolizing is never what we want to do." Monopolizing is indeed the best way to make big money, but what good is monopolizing a niche market?
"Achieving healthy competition is not that simple."

Li Xiang smiled meaningfully and said, "The L series and the Hongtu series are both vying for the most profitable high-end market for range-extended electric vehicles. The total sales of range-extended electric vehicles this year are only 50 units, so competition between the two is naturally unavoidable."

Since the Hongtu series began delivery, Weilai Auto, especially the L series, has been plagued by negative news. In addition, Weilai's across-the-board price reductions in its high-end series, while compensating existing car owners, have led to a sharp drop in used car prices, impacting the interests of used car dealers.

In the second half of this year, the public opinion environment surrounding Weilai has become far less "friendly" than before, especially in the fiercely competitive extended-range electric vehicle market, where some of the problems with the L series have been deliberately amplified.

Some media outlets have also conducted surveys to compare the advantages of the L series and Seres, focusing on user satisfaction. The L series has a user satisfaction rate of 55%, while the Hongtu series has a satisfaction rate of 70%.

There's really no way to reason with Wei Lai about this. He doesn't know where they got the 55% survey data from, but it's certain that Wei Lai's user satisfaction is lower than Seres'. He still knows the difference between a large user base and a more strategic approach to fan intentions.

"Hehe, this is just the beginning. Just wait and see, once Xiaomi enters the market, our reputation will definitely deteriorate further."

Although the appearance and configuration of Xiaomi's car have not been revealed, industry insiders can still analyze the positioning of Xiaomi's first car through some channels and road test information, which is that it is a coupe.

Based on their advertising, it can be inferred that this car will not be cheap, with a price tag of over 20 yuan, putting it in direct competition with the ET5 and the ET series launched by Weilai later.

It's not hard to tell without analysis that Xiaomi has been working hard to improve its brand image. Given the difficulty of making a breakthrough in the mobile phone market, they can't possibly price their first car below 20 yuan, as that would do no good for their brand image.

Even if the analysis is wrong, setting the price below 20 yuan will still put it in competition with Exeed. Although in recent years everyone has been comparing it to Tesla Model 3 and Model Y, to be honest, these two cars are relatively independent in the market.

The real competition is actually among domestic brands.

"After we solidify our market position, there will only be more and more negative public opinion, and I hope everyone understands this."

If you want to wear a crown, you must bear its weight.

To maintain its market position, Wei Lai must accept various attacks from competitors and adapt to this environment, instead of responding to every provocation as it has in the past.

Of course, it's also mainly because Tan Jincheng understands the mobile phone industry. Attacking competitors is commonplace in the mobile phone industry. When mobile phone manufacturers cross over into the automotive industry, they will definitely bring their most mature marketing methods with them.

The signs of the year when range-extended electric vehicles would take off were already beginning to emerge with Seres and the L series.

"What I hope is that everyone will not focus their energy on verbal battles with the competition, but on improving the product. If the competition criticizes the flaws in our cars, then we should accept it and make improvements."

No car model is without any problems, but minor issues in high-end models are often magnified several times over.

"Consumers spend hundreds of thousands of yuan to buy your product, not to listen to your sophistry or your verbal battles with competitors. After the L5 is launched, we must pay attention to this point and learn from the lessons of the L9."

For the L series, after the launch of L9 and the upgrade of L1, Weilai made internal optimizations and also readjusted the naming.

The new L1 is a six-seater mid-to-large SUV. As a replacement product, the L1 remains a sales pillar despite product upgrades and price reductions. In addition, the L1 name has been changed to L5.
The name L1 has been changed to the new model that is about to be delivered. The new L1 is positioned as a family five-seater flagship, a five-seater mid-to-large SUV, and is divided into three models with starting prices of 29.98 yuan, 32.98 yuan and 35.98 yuan respectively.

Compared to the older L1, the price has been adjusted again. This is also the first time that the L series has lowered its price to below 30 yuan. The starting price of 29.98 yuan is also a counterattack against the Hongtu X7.

However, the L1, which was renamed L5 after the redesign, also had its price adjusted. Compared to the old L1, the price of the L5 increased to 320,800 yuan, which is 20,000 yuan more expensive than the old model. This was to clear out the old model's inventory.

The name change, price increase, and some problems exposed in the L9 have to some extent caused dissatisfaction among car owners, and the L9 is facing dual pressure from competitors and consumers.

"You all heard that, right? Do as the boss says."

When sales fall short of expectations, nothing you say will sound convincing. In order to boost sales, the L series, and even Li Xiang himself, did a lot of rather abstract things in the second half of the year. It's impossible for Tan Jincheng to keep an eye on everything.

By the time it was discovered, it was too late, and it had already damaged the brand image to some extent.

Especially in handling user feedback, the pressure of after-sales service brought about by rising sales, as well as the arrogance that comes with a stable position, have gradually become apparent, which has made Tan Jincheng somewhat dissatisfied.

"Don't let our status as a leader or a representative of a high-end image lead to complacency. The reason we have brand influence in the high-end market is primarily due to our product strength and service, not the marketing that outsiders talk about. I hope everyone remembers this."

“Apart from the L9 series, the prices of the L1 and L5 will not change much in the future. I hope everyone will seriously consider how to maintain the high-end image.”

The lower-than-expected sales of the L series made Tan Jincheng realize that simply lowering prices is not very effective, especially for high-end brands. Therefore, for the upcoming ES and L series, there will be no major changes in price, at least for the next two or three years.

The only L-series model with room for price reduction is actually the L9. The price of the L9 will be adjusted according to market changes in the future, and will be reduced to around 40 yuan, further lowering the threshold for users to purchase the car.

However, the starting price of 40 yuan should be maintained as much as possible. 29.98 yuan, 32.08 yuan, and 40.98 yuan are the reference starting prices for the L series for the next three years, depending on the market performance.

"Alright, that's settled then. Go and make some adjustments to the delivery of the new L1. Also, since we've had good results this year, you'll receive the rewards you deserve."

The old adage of "give a stick and then a sweet treat" is effective; the team members' expressions improved considerably after hearing that the reward would be substantial.

However, they also knew that they probably wouldn't be among this year's outstanding teams.

The newly named L1 will officially begin deliveries on February 8, 2023. With all three models of the L series now on the market, the future product matrix of the L series has been officially confirmed, and no new models will be launched in the L series in the future.

After Tan Jincheng left, Li Xiang chuckled and said, "You all saw that, right? Our boss has big ambitions. You're all getting cocky with these achievements. You're a bit out of touch with the boss's vision."

Li Xiang was somewhat annoyed. If it weren't for the L team's questionable actions, the L9 should have been able to maintain a record of over 10,000 units delivered for four consecutive months after its launch. What an honor that would have been, and what an impact it would have had on the brand image.

The starting price of the first model exceeded 400,000 yuan, and the delivery volume exceeded 10,000 units for four consecutive months. It's hard to believe. The L team had a lot of questionable actions in the fourth quarter, including arrogance in dealing with after-sales service, talking nonsense in front of the media, and reducing stock holdings.

The L9 is the first new model that Li Xiang personally oversaw since taking over as CEO. He was involved in almost all operations and devoted a lot of energy to marketing and promotion throughout the year. It can be said that he poured everything into it.

Although it was a great success after its launch, it would be even more perfect if it could deliver more than 10,000 units for four consecutive months.

"In the end, we are just a team under the Weilai system. Although the annual sales of more than 13 vehicles are important to the group, they are not so important as to be negligible. You should think about how to improve yourselves."

With the model now finalized and no new models to be launched in the future, maintaining market competitiveness and preserving the high-end image in the range-extended electric vehicle market will be the key considerations for the L team going forward.

Ultimately, the core of WILAY is still pure electric vehicles. Range-extended electric vehicles are the main hybrid models of WILAY's main brand, but they are not irreplaceable. It should be noted that the hybrid powertrain of the Galaxy P1 has gradually been accepted by the market.

Although it is the most profitable part of the group's complete vehicle business, this advantage will only become smaller and smaller as other teams gradually catch up.

The L series is not something that cannot be abandoned.

"However, don't be discouraged. Let's continue to work hard in 2023, and at least not let the Aion series be outdone."

Besides the stable output of the ES/ET team, the three major teams under Weilai Auto—Exeed, Aion, and L—are all facing internal competition for resources.

The E series is practically the flagship product of the Weilai brand, so its status speaks for itself.

As for Exeed, as the youngest brand under Weilai, it has become a phenomenal product since its launch. It is treated almost like a "youngest son". The fact that Exeed's production was not affected by the environment in Beicang area in October and November proves this.

While both the L team and the Aion team are important to the group, their relative positions are weaker. To secure resources, they need to work hard on their own. Therefore, despite belonging to different markets, they are the most competitive in terms of internal resources.

Compared to the high-profile L team, the Aion team can be said to have taken the concept of making a fortune quietly to the extreme, which is why they made a name for themselves internally.

P.S.: A relative passed away these past few days, and I need to help out, so updates have been a bit inconsistent. Sorry.

(End of this chapter)