2003: Starting with Foreign Trade

Chapter 1051 "Revolutionizing the Dealers of Gasoline-Powered Cars"

The phrases "same price for gasoline and electric vehicles" and "9.98 yuan is such a steal, YYDS!" that flooded the screens of the three live-streaming rooms deeply stimulated the car dealers and representatives of various car companies who were watching in front of their screens.

One by one, their brows were furrowed.

They weren't watching the fireworks display; they all knew that a celebration costing over 200 million yuan was definitely not just a victory celebration.

"The industry has been revolutionized."

A Nissan Sylphy dealer sighed, "Consumers in the live stream showed no resistance to Weilai's price reduction. They were all very excited. The gifts priced at one yuan in the live stream were incredibly popular, with over 999 items available. This is due to the trust mechanism that Weilai has built up among its users over a long period of time."

With increasingly frequent price reductions for end products in the supply chain, how to manage relationships with existing customers while lowering prices has become a challenge that every car manufacturer and dealership must face. It's no longer unusual for 4S stores and even headquarters across the country to be vandalized with banners by existing car owners.

The term "backstabbing" has become one of the most common terms used between long-time users and car companies. Wei Lai has not escaped this stigma either. However, Wei Lai's generous actions have handled the relationship with long-time users very well.

In Tan Jincheng's view, a car is a long-term consumer product. During its use, any maintenance can bring benefits to the manufacturer and the 4S store. Positioning the company as a service provider and maintaining existing car owners is far less costly than acquiring new users.

Through repeated price adjustments, we have worked hard to maintain our existing customers, earning their trust, especially with the large-scale subsidies provided to them during the overall price adjustments of the ES and L series.

Based on the launch dates of the Xingtu and Xinghe series, long-time users in the live stream know that, given Wei Lai's consistent style, the subsidies for them this time will definitely be substantial.

Especially for users who placed orders between December and New Year's Day, keep in mind that they bought their orders before the subsidies were phased out. If we take into account the subsidies that Weilai is providing this time, wouldn't it be even more cost-effective than for new users?

"We'll see what kind of subsidy policy Weilai comes up with next. Hehe, anyway, we won't lose out."

Users watching the live stream on the Weilai APP chuckled. Consumers simply saw the starting price of 9.98 yuan as cheap and didn't think much of it. But for car manufacturers and automakers, the problems they face are much greater.

The pure electric model priced at 9.98 yuan features L2-level assisted driving, a youthful and dynamic design, and an advantageous appearance. It already has a significant advantage in its class, and this price reduction makes its advantage even more pronounced.

Don't forget that every time Exeed adjusts its prices, it often comes with an upgrade to the model. The 2023 Exeed S01, although not yet released, is still highly anticipated with its starting price of 9.98 yuan.

"This is an industry revolution! Mr. Tan, you have great vision."

The celebration continued, and Tan Jincheng only announced price reductions for the entire Xingtu and Xinghe series without providing much detail. He simply said that everyone should pay attention to the upcoming announcement before moving on to the next stage of the technology launch event.

At this celebration, Weilai launched a new electric motor drive platform and upgraded its intelligent driver assistance system for range-extended vehicles, but the dealers were no longer interested in listening.

Just now, they received news that there have been significant changes in the online ordering system of the Weilai APP. According to information from the staff remaining in the store in their internal work group, in just a short time, some potential customers have already called to inquire about the price reduction.

Less than half an hour has passed, and the news has spread far too fast!
What's giving them a headache is that they don't have much inventory on hand right now. There's a huge demand for new energy vehicles priced between 10 and 15 yuan in 2022, and their inventory cycle isn't long to begin with. Wei Lai has been adjusting their monthly production capacity to prevent them from having too much stock and causing a tight cash flow.

This was originally a good thing, but the sudden price cut by Wei Lai has caused some trouble.

In a rapidly growing market, as a leading brand, Weilai has always maintained a relatively healthy product inventory cycle, generally between 30 and 45 days. The inventory cycle varies for each model, but on average it is around 40 days.

Generally speaking, the inventory cycle of automobile manufacturers is divided into 30 days and 60 days. If it is less than 30 days, it means that the inventory is tight and there may be a shortage of goods at the terminal due to insufficient production capacity, thus missing the sales window.

A 30-60 day inventory cycle ensures that vehicles are readily available or delivered quickly, while avoiding inventory buildup. However, a cycle of more than 60 days should raise concerns, as it indicates high inventory levels. It is important to review the financial reports of automakers and pay attention to changes in inventory cycles.

"It really is an industry revolution, a revolution that will destroy gasoline-powered cars, but we have to keep up with it."

With a starting price of 9.98 yuan, it is clearly aimed at the market of gasoline car users. Throughout 2022, the sales of gasoline cars, especially joint venture brands, declined sharply. FAW, SAIC and GAC, which were almost invincible in the past, saw a significant drop in sales in 2022.

Among the top ten automakers in domestic sales, half are experiencing a decline in sales, and all of them are automakers that primarily produce gasoline-powered vehicles.

In short, those new energy vehicles that don't sell well in China are all struggling, while Weilai dealt a fatal blow to the already fragile gasoline vehicle market at the beginning of the year.

"Where is Mr. Li? How are you going to handle this?"

Big Mouth is someone who loves to stir up trouble. After teasing Brother Boatman, he looked at Li Bing on the other side. Both are emerging brands. Due to their different systems, Chrysanthemum can be more flexible in market competition. However, any other emerging brand must also be involved in the mass market if it wants to survive.

"Hehe, just like Mr. Yu said, the ones who should be worried about now are the gasoline car companies. We shouldn't have to worry about Mr. Tan attacking us this year."

Last year, the price reduction of the entire high-end series of Weilai affected not only the Hongtu X7, but also Li Bing's battery swapping system, which was also significantly impacted, forcing them to adjust their prices downwards.

The fragile system of emerging players means that every forced price adjustment is a survival test for these companies.

"Haha, that's true."

At the beginning of the year, Weilai adjusted the prices of its models in the 10 to 15 yuan range. Coupled with the price adjustments made in the high-end market last year, these emerging forces with differentiated competition can at least catch their breath.

"The fireworks are about to start. Let's go and see. It's rare for President Tan to be so generous."

The boatman listened attentively to Tan Jincheng's explanation of the new technologies from Weilai, including the brand-new four-motor drive platform, the new battery-body integration technology, and the optimized driver assistance technology for range-extended electric vehicles.

Most of these technologies will be applied to new models launched this year. Weilai plans to release several new models this year. In addition, in terms of driver assistance, it will also promote the de-high-precision mapping.

In addition, WYD has made many technological optimizations in the areas of perception revolution and hardware reconstruction, which are of great reference value to BYD. BYD currently has its own technological moat in the areas of electric drive technology and battery-body integration.

However, BYD's current weakness lies in its lack of experience in intelligent assisted driving. The technology roadmap provided BYD with a good reference and is a key area for them to learn from.

To be honest, Wei Lai's research and development direction, which focuses on the immediate future and specializes in L2+ level investment, was initially looked down upon by some, including himself. However, as L3 has been slow to materialize, Wei Lai's pragmatic approach has clearly benefited him.

Thinking of this, the boatman glanced thoughtfully at Yu Dazui.

"Yes, yes, let's see what 3000 drones will create on site. It's been a long time since President Tan has made such a big move."

Wei Lai is generous to distributors, suppliers and users, and treats his employees well, but he has never used such an "exaggerated" marketing model.

That said, of the 200 million yuan budget for this event, 50 million yuan is allocated to rewards for distributors and self-operated stores. The top 100 distributors and stores in terms of sales nationwide will share the 50 million yuan bonus, with a single store receiving a maximum reward of 500,000 yuan.

In addition, there is the qualification to participate in domestic luxury tours. Weilai mainly operates on a direct sales model and does not have many distributors. Distributing this 5000 million yuan equally is very generous. However, Tan Jincheng just introduced the distributor channel.

In 2023, Weilai will further promote channel penetration, adding 800 new county stores, increasing the coverage rate from the original 30% to 60%, matching the penetration strategy brought about by this price reduction.

The addition of new dealers and stores will also bring significant changes to the industry.

The celebration continued, with 3000 drones weaving together a globe pattern and the letter NB, much to the delight of the leaders from Ningbo and Beicang who were watching on site. In addition to being broadcast live, the celebration will also be promoted overseas.

"The meaning is good, but why not use your own brand name?"

The globe design is easy to understand, representing globalization, but the use of "NB" instead of "NIO" is somewhat unexpected. Tonight's celebration has truly been full of surprises.

"NB means awesome, it's easier to understand."

The wording for the drone was discussed internally for a long time. Some suggested spelling it "NO.1", while others suggested spelling it "NIO". In the end, a planner casually suggested using "NB".

That's all that matters.

Tan Jincheng thought about it and agreed, so it was settled. This awesomeness represented more than just Wei Lai.

Did you just reveal something?

The boatman looked at the spirited Tan Jincheng and asked with a smile, "Tonight's celebration, from Tan Jincheng's appearance to the start of the fireworks show, only has one hour. It's a bit tight in terms of time. Tan Jincheng's explanation of the techniques was only a general overview. For a technical person like him, it was a bit unsatisfying."

However, besides these, Tan Jincheng surprisingly did not announce Weilai's sales forecast for this year at the press conference.

It's worth noting that most companies have already announced their sales forecasts for 2023. Emerging brands are generally expected to maintain a range of 20 to 30 vehicles, while traditional joint venture brands are expected to reach a range of 100 million to 200 million vehicles.

BYD has set its sales target for this year at 250 million vehicles, representing an increase of over 80% compared to its 2022 sales. BYD is very optimistic about the market prospects.

Just after Tan Jincheng officially announced the price reduction, he had already notified the group to prepare countermeasures for the Qin DM series. The same price for oil and electric vehicles was proposed by Wei Lai and BYD at the same time. How could Wei Lai be allowed to have the first time?

The Qin DM series will also have its starting price adjusted to 9.98 yuan. BYD's purpose in doing this is simple: in addition to competing with Weilai for a share of the gasoline vehicle market, it also wants to win over consumers' minds.

Hybrid vehicles performed exceptionally well in 2022. In the 10 to 15 yuan market segment, the choice between pure electric and hybrid vehicles will represent the mainstream of future electric vehicle sales. Tan Jincheng smiled and said, "Sales figures? We will announce that through official channels later, but I can reveal it in advance: 300 million vehicles."

"Is it still primarily a new energy source? That's such a conservative approach."

Now it was the boatman's turn to be stunned. In the past, Weilai had always been cautious about sales forecasts. In his more than ten years of car manufacturing career, Weilai had only been aggressive about sales forecasts a handful of times, with the most aggressive being in 2022.

If the total sales volume is 300 million vehicles, then a 20% increase compared to the sales volume in 2022 is very conservative. It should be noted that Chery, which sold 123 million vehicles this year, has set its sales target for 2023 at 200 million vehicles.

"what do you think?"

Seeing the boatman's expression, Tan Jincheng decided to tease him a little.

"If the total is 300 million vehicles, that would be too conservative. But if it's that number, then we need to adjust our strategy."

Although Tan Jincheng has not been in the industry for long, his ability to grasp the market is quite accurate. He has always been able to grasp every market change. If BYD had listened to his advice and had not set a sales target of one million vehicles, BYD might not have experienced that crisis.

A crisis took them ten years to recover from, which forced them to take it seriously.

"It should be the sales of new energy vehicles. An overall sales growth of 20% is obviously unlikely."

After calming himself down and seeing Tan Jincheng's teasing expression, the boatman also laughed.

With price reductions across the entire Exeed and Galaxy series, Exeed, which achieved sales of 28 units in 2022, will conservatively expect sales to exceed 30 units. If no particularly outstanding pure electric models in the same class emerge this year, the Exeed S01's annual sales are expected to be between 30 and 35 units, and it may even surpass the Tesla Model Y to become the top-selling pure electric vehicle.

"Yes, the sales volume of new energy vehicles is 300 million units, and the total sales volume is 350 million units."

Given Weilai's size, its growth rate will definitely be lower than that of other companies. The kind of doubling growth that happens every time is unlikely to happen to Weilai. In Tan Jincheng's view, a stable growth rate between 10% and 30% is the healthiest.

However, 2023 is the second year of the explosive growth of new energy vehicles. With the global market boom, it is reasonable to appropriately raise sales expectations. An overall growth of 40% is quite reasonable.

Tesla has set a similar target: 180 million vehicles sold in 2023, representing a growth rate of about 38% compared to this year's deliveries.

A dazzling large-scale drone show illuminated the night sky over Meishan Bay, going viral on social media. This concludes tonight's event for Weilai. Starting tomorrow, offline collaboration between dealers and users will officially begin.

In addition to rewarding dealers, Weilai has also done a lot of work in terms of user engagement. With the joint efforts in 20 cities, more than 10 car owners will receive free car infotainment system upgrades worth more than 3000 yuan.

In addition, in the five cities of Beijing, Shanghai, Guangzhou, Shenzhen and Ningbo, we will draw winners to receive a one-year usage right of a Weilai ES8 or L9. There will also be limited-time points redemption benefits for all car owners. Of course, there will also be many lucky draw activities during tonight's live broadcast.

After the fireworks show, Boss Tan was busy entertaining the guests, while the operations team of Weilai APP was not so relaxed.

"Everyone, please work hard these next few days. We expect things to be mostly back to normal by the 18th. Keep the server stable, and the order team needs to process new orders as quickly as possible. Also, coordinate well with the production department."

Although the live stream has ended, the activity level of the Weilai APP continues to rise, with its popularity dominating major social media platforms. The starting price of 9.98 yuan has attracted a large number of potential users.

Within a short period of time, orders for the Exeed S01 surged by 80%, while orders for the Galaxy P1 also increased by 50%. In addition to these two models, other models, and even the BMW MINI EV, saw varying degrees of increase in pre-orders.

In addition, the daily active users of the Yuechi APP have also increased significantly. The traffic impact brought by the 9.98 yuan is still quite powerful. In the digital age, reservations can be made with just a few taps on the screen, which also increases the probability of impulsive orders.

"You're going to be very busy this year."

Wang Fengying, who could see the backend data, smiled and said to her husband Zhang Li that the couple had also dressed up for the celebration tonight, and after it ended, they had a late-night snack with Boatman Brother, Da Zui and others along with Tan Jincheng.

"The data is good?"

The night breeze helped Tan Jincheng, who had been drinking, to sober up considerably.

Wang Fengying nodded: "Yes, the data has been rising continuously. It seems that our previous preparations were somewhat insufficient. This time, the delivery cycle will be extended."

Proactive price reductions are never decisions made on a whim; they require a series of internal adjustments, starting with changes in production capacity.

"There's nothing we can do about it. We'll do everything we can. As for Mr. Zhang, there's nothing we can do but ask you to take care of things."

Tan Jincheng, who was also observing the backend data, smiled. It had only been a few hours since the live stream ended. Although the data showed a significant increase, it was not yet the point of fastest growth. This was only the first wave.

The first wave of data growth mostly came from users who watched the live broadcast and those who already had an intention to buy new energy vehicles.

The second wave was Wei Lai's target.

Before the price reduction plan was put on the table for discussion, Wei Lai had conducted research on user profiles. He found that when the price was brought down to below 10 yuan, more than half of the customers who originally planned to buy the Sylphy or Lavida would change their purchase intentions.

To put it bluntly, the main obstacle to the promotion of new energy vehicles is still the price. The price of hundreds of thousands of yuan is indeed not low, especially with the reduction of subsidies this year.

Take pure electric vehicles as an example. The reason why Exeed S01 is so competitive is that there are too few similar competing products. With subsidies, although manufacturers covet this market, they are also unwilling to give up profits.

Currently, the final price of the Nissan Sylphy is basically maintained at around 10.86 yuan, while the final price of the Volkswagen Lavida is more expensive, maintaining around 13 yuan. At present, when the sales of major gasoline vehicles are slow to react, the price of 9.98 yuan has a clear advantage.

Zhang Li chuckled: "It's painful but also pleasurable."

Regardless, with a surge in orders, Wei Lai's inventory cycle will definitely decrease, putting him under the most pressure, but also giving him a lot of motivation.

"There's no need to worry too much. Joint venture brands are quick to react. They're just having difficulty transforming, but that doesn't mean they lack market insight. They'll probably react quickly."

"Let's go back to sleep, it's still a bit cold."

The year before the Spring Festival in 2022 was the coldest in Ningbo in recent years, and it was really uncomfortable to stay outside in this weather.

"Too."

Tan Jincheng's judgment was correct. However, contrary to his expectations, the first to react was not a joint venture brand, but Geely, which simultaneously announced that it would adjust the starting price of the Qin DM series to 9.98 yuan.

On January 16th at noon, Geely announced via its official social media account that it would lower the price of the Emgrand L HI, reducing the starting price from 129,800 yuan to 114,800 yuan.

In the evening, the Changan Deep Blue SL03 extended-range version also launched a "same rights for gasoline and electric vehicles" promotion, offering subsidies to car owners and giving away a 10,000 yuan electricity card with the purchase of the car, which can be regarded as a disguised price reduction.

"That's a quick reaction."

As domestic brands that maintained positive growth despite having a high proportion of gasoline vehicles in their overall sales in 2022, Changan and Geely responded in less than 12 hours, which is worthy of their performance in 2022.

The Deep Blue range-extended electric vehicle is a model with a certain market influence, besides the Weilai and Seres, and it sells quite well. Geely has also established the Jike brand.

Compared to the response strategies of Changan and Geely, the joint venture brands' response appears somewhat panicked.

"Complain? Seriously? You can't take this kind of nonsense?"

On the 1th day of the twelfth lunar month, which is January 18th, Tan Jincheng, who had just finished his trip to Luzhou, received a phone call from a leader of the Ministry of Industry and Information Technology while on the highway to his hometown of Yicheng.

The Ministry of Industry and Information Technology received a joint complaint from several joint venture brands, alleging "dumping" and targeting the prices of the two major car series.

"No, how can this be called dumping? Which companies filed the complaint?"

Tan Jincheng was speechless. Throughout 2022, many car companies and models lowered their prices, including both new energy vehicles and gasoline vehicles, but this was the first time there had been a complaint.

"Don't ask who it is. Just be careful. There shouldn't be any problems domestically, but be careful overseas."

"Okay, thank you, boss."

Yes, it's not a big problem domestically; prices will still have to be reduced. But in overseas markets, especially the European market that Weilai values ​​most, it would be a bit troublesome if these joint venture brands also filed anti-dumping complaints.

"Are you alright, boss?"

"It's okay, let's keep driving. We'll talk about it after the New Year."

(End of this chapter)