2003: Starting with Foreign Trade

Chapter 1052 "Returning Home in Glory"

From the 15th to the 18th, the order growth rate of Weilai was like a wild horse that had broken free of its reins, growing rapidly. Some stores that previously averaged about 20 vehicles per day saw their daily orders exceed 100, and the delivery period was extended from one week to one month.

The surge in orders led to a change in sales tactics, with a focus on the electric vehicle experience and the price of gasoline vehicles. Billboards advertised how much money could be saved on fuel costs over three years compared to gasoline vehicles. The vast majority of these surge in orders came from customers who had previously preferred gasoline vehicles.

The bustling scene wasn't just limited to the retail stores. At Weilai's headquarters on Meishan Island in Ningbo, rows of large trucks were lined up, with dealers queuing up to pick up their vehicles, completely oblivious to the Chinese New Year celebrations.

Some small and medium-sized dealers with limited financial resources need to take out short-term loans to pick up more cars. For Xinghe and Xingtu, the price for dealers to pick up cars ranges from 9 to 9.2 yuan. Although the price has been reduced, the profit is still quite considerable for this type of high-volume model that is not difficult to sell.

The gross profit per vehicle can still be close to 8000 yuan, and the surge in orders can fully cover the current short-term borrowing costs.

The overwhelming demand has left gasoline car manufacturers somewhat bewildered, which is understandable. The key issue is that this is during the Chinese New Year holiday, and the sudden and proactive price cuts by Weilai have also affected the group's internal decision-making.

Tan Jincheng, on the other hand, was too lazy to care about them. In China, it would be impossible to file a complaint against Wei for dumping. What he was worried about was the joint venture complaining about them in the European market.

The EU initially used environmental protection as a pretext to vigorously develop the new energy vehicle industry, which seemed like a well-intentioned scheme. However, after more than a decade, the development of the new energy vehicle market is far from what they imagined.

They could accept Tesla's rise, since it was the only company that had achieved significant success in North America. However, the development of Chinese companies, especially in the last three years, was far beyond their expectations.

It's not just traditional companies like Wynn, BYD, and Geely that are growing rapidly; new brands of all sizes are flourishing, and Wynn's influence in Europe is also growing.

If they can't win the game, they have to think of other ways. During his trip to Europe, Li Xiang heard rumors about the EU's price cap on the consumer-facing new energy vehicle market. Simply put, the price of new energy vehicles cannot be lower than a certain price, which has not yet been determined.

The EU is attempting to limit our cost advantage by setting price controls, so as not to have a greater impact on traditional European automakers.

“We don’t plan to engage in a price war with them. You just need to keep an eye on the movements of these joint venture brands. Also, starting this year, we will also be developing markets outside of Europe.”

Going global is a strategy for Weilai, but Weilai has never thought of attacking the market by "dumping" at low prices. There is no need to use the advantages of its industrial chain to subsidize overseas users. Since we are now a major automobile country, we must change our mindset.

The intelligence of new energy vehicles is the biggest advantage of domestic car companies. He believes that users who are interested in electric vehicles will not ignore these advantages. Moreover, no matter how much price is restricted, our cost advantage will allow us to make a profit at a lower price than European car companies.

Real consumers choose products based solely on the product itself, and this applies worldwide.

“We are prepared for this. There has been a lot of debate in the EU recently, mainly because they are not on the same page. It seems that it will take some time to really push things through. What you said could indeed be the trigger.”

Yu Liguo, who has been stationed overseas for a long time, is probably the most sensitive to political matters in the Weilai Group. The main reason for placing him overseas is this need. In the current environment, frankly speaking, the products themselves are no longer the most important determining factor in trade between countries.

"The public doesn't agree, right?"

According to an analysis of the EU market in 2022, the average selling price of new energy vehicles exported from China to Europe was between 2.8 euros and 3.2 euros, less than half that of European domestic companies.

纯电型汽车，平均售价是在3.2万欧元左右，拿尉来在欧洲市场的两款主流车型ET5与ES3来说，2022年在欧洲市场的平均售价分别为3.8万欧元以及4.7万欧元。

Converted to RMB, the annual price is approximately 27 yuan and the average price is 33 yuan, which is much higher than the domestic price. However, this price is still very competitive compared to the average price of 5.6 euros for pure electric vehicles in Europe.

Even Tesla, with its two models priced at an average of 4.5 euros and 5.2 euros respectively, is more competitive than European automakers. Even when tariffs and shipping costs are taken into account, the gross profit margin in Europe is higher than in China.

This deal was very comfortable to make, but it also made European automakers and governments around the world very uncomfortable.

"Yes, German companies like Volkswagen and BMW don't quite agree with this plan, and consumers in Europe also have a lot of opinions."

Price control policies, to put it bluntly, are a game between countries, including consumers in Europe. For example, the Volkswagen ID.3 has an average price of around 15 yuan in China, while in its home country, the price range is around 30 yuan.

This has greatly displeased consumers in Germany, as the same model is more expensive in its home country. Who can stand that?
"I understand. French and Italian car companies are almost out of the market here, and they are less dependent on the supply chain. They are bound to make a fuss, just like we criticized Tesla before."

The companies that made the most noise, such as Renault, are almost forgotten in China. So, offending them is no big deal. But companies like Volkswagen and BMW, whose sales in China account for 30% of their global sales, and who also rely on our battery supply chain, certainly don't want to offend us easily.

"It will definitely be approved eventually. We don't know the specific starting price yet, but it's not a big problem. By then, we will have a localized factory in Europe, and we will receive the subsidies we are entitled to. However, let's actively explore other markets."

Due to its outstanding overseas performance, Weilai's overseas business division has been upgraded to an overseas branch, responsible for global automobile export business. According to the plan, Weilai's main markets to be developed this year are the Middle East market and the Australian market.

The biggest advantage of these two regions is that, because they do not have their own automotive industry, they are much more lenient in terms of policies. Since 2022, they have also vigorously promoted new energy vehicles, and brands such as MG and Chery have already achieved a good penetration rate in the Middle East.

Middle Eastern countries have introduced a combination of policies for new energy vehicles, including free registration, charging fee reductions, and tariff adjustments. These aggressive policies have led to a surge in the penetration rate of new energy vehicles in the Middle East.

Australia is also vigorously promoting new energy vehicles. In terms of market size, these two regions are quite large, with an annual market size of over one million vehicles. Securing even a certain share of these markets would be a significant breakthrough.

Most importantly, the vehicle preferences in these two regions are somewhat similar to those in China, with SUVs and pickup trucks being the mainstay. Consumers in the Middle East especially love mid-to-large SUVs and pickup trucks, and WIL has certain advantages in these two business segments.

In 2023, Weilai plans to increase its exports to 40 vehicles, with Australia and the Middle East being the key markets. The export model will also shift from being driven by a single pure electric market in Europe to a collaborative model involving multiple regions, multiple power types, and multiple production bases.

In the European market, localized production has helped mitigate policy risks. In South America and Southeast Asia, Proton has leveraged its existing distribution channels with local automakers to achieve growth through vehicle innovation and production capacity transfer.

In regions such as the Middle East and Africa, the focus is on leveraging the transition to new energy sources to expand into emerging markets. Future technological iterations and in-depth regional development will be key to continued expansion.

According to the company's future expansion plan, the German factory will have a production capacity of 15 vehicles by 2025, with local production accounting for more than 50% and hybrid vehicles accounting for 30%.

In Southeast Asia, factories that collaborate with local businesses will expand their production capacity to 25 vehicles by 2025, with right-hand drive models being exported to Australia and New Zealand, covering the entire Australian region.

By 2025, Wynn aims to increase its overseas sales to 100 million vehicles, becoming a truly global automaker.

"The overseas strategy can be accelerated. If necessary, subsidiaries can also be spun off for financing. You can evaluate the specifics, and I will approve it based on the circumstances."

After chatting with Yu Liguo for a few more minutes, Tan Jincheng hung up the phone.

The Weilai ES8 drove at a steady speed on the highway, and after a few hours we entered the Yicheng area, where the Yangtze River Bridge came into view.

"Once we're in the main urban area, shall I take over driving?"

Having not returned for many years, Tan Jincheng could still immediately sense the changes in Yicheng, even though the city hadn't changed much. Petrochemicals had made significant contributions to Yicheng during its less developed economic period, but under the current economic circumstances, it had become a major problem.

A large petrochemical plant is located in the main urban area, which is quite rare nationwide, and thus restricts the development of Yicheng City.

Lai Yiu-fai shook his head, focusing on driving: "No need, I'll drive. There's no need to go back to my hometown for the Lunar New Year. I went back a few years ago."

After years of following him, Lai Yiu-fai understood what his boss meant: he wanted him to go back to his hometown for a visit.

According to industry practice, travel by someone like Tan Jincheng involves strict security procedures. For example, this ES8 looks no different from the ES8s on the market, but it has been modified and is actually of a very high level.

In addition to two to four accompanying personnel, Tan Jincheng is also accompanied by a security layer and technical support on the perimeter when he travels. Sometimes, Tan Jincheng travels with more than 20 people.

While the security measures may appear similar during daily travel, there are many intricacies involved. To a certain extent, the high level of security comes at the cost of some freedom and privacy.

This is also why Tan Jincheng dislikes going abroad. Whenever he goes abroad, his security level has to be raised several levels. In addition to personal safety, he also has to guard against various schemes overseas, such as legal traps.

"Fine, since your family is all in Ningbo anyway, there's no point in going back."

Seeing Lai Yiu-fai's serious expression, Tan Kam-ching did not continue to persuade him. As Tan Kam-ching's longest-serving "driver," the increasingly elderly Lai Yiu-fai no longer needed to personally carry out security duties.

Now, besides being the head of the security team and coordinating travel missions behind the scenes, he's mostly been a driver, and he'll be retiring in a few years.

As for a successor, they have already been grooming one.

"Right? It's been a long time since I've been to your hometown, boss. I'm taking this opportunity to see what changes have occurred."

“Okay, then let’s spend the New Year at my house.” Li Yaohui was also a little emotional. After nearly 20 years of working together, he had watched Tan Jincheng grow up little by little. No one knew his boss’s growth process better than him.

Lai Yiu-fai also understood that all good things must come to an end. As his close associate, the time he could serve Tan Kam-ching was running out, just like an athlete who would eventually have to retire.

In the early years, Tan Jincheng frequently returned to his hometown due to business needs. Whenever he went to the county town to discuss business, he would take the opportunity to visit his hometown. However, this has become less frequent in recent years. According to the business structure, Weilai Group does not have much specific business in the Yicheng area, and there is no need for Tan Jincheng to appear in person.

As for the business of Flash Group, they had long since stopped taking care of it.

Perhaps this trip back to my boss's hometown for the Chinese New Year will be the last.

"I don't know what changes will happen in my hometown, but I'm still looking forward to it."

"I do know that; things have changed quite a bit."

The drive from the city to his hometown takes about an hour, and Tan Jincheng, now relaxed, chatted with Li Yaohui along the way.

The changes in Tanjiacun are generally handled with the assistance of Tan Lihua and his wife, as well as staff from the family foundation.

Lai Yiu-fai would occasionally help with some matters, but he would not report them to Tan Kam-ching most of the time. The changes in Tan Family Village were considered "minor matters" by Tan Kam-ching.

Chatting and laughing all the way, the convoy entered Tanjiacun Village. The changes were so great compared to the city.

"If we didn't know some people, we would have suspected that we made a mistake."

Along the way, Li Yaohui also gave a systematic report. In fact, it would be a stretch to say that there had been no changes in Yicheng. Tan Jincheng, who controls three core groups and is the co-founder of Shanchi Group, is also from Yicheng. It would be unreasonable for him not to provide any support to his hometown.

His family back home hasn't wronged him. If they don't offer some help when they have the means, they'll be criticized behind their backs.

Take Orange Group as an example. Under Tan Jincheng's guidance, they also learned from Dongzi and placed some of their servers and call centers in Yicheng to promote the development of the digital economy and boost employment and GDP.

The county town, relying on the two major groups, Shanchi Group and Shenzhou Group, has developed well in the textile and apparel and electric vehicle industry chains. According to Li Yaohui, the establishment of other enterprises driven by the industry chains has indirectly created more than 3.7 jobs and generated more than 20 billion yuan in annual tax revenue.

The once impoverished county has been transformed. Tan Jincheng felt this along the way. The road to his hometown was well-maintained and wide, and the shops on both sides of the road no longer had the chaotic feel of his previous life.

Relying on the Orange Group, the scale of e-commerce in Yicheng is completely different. In Tan Jincheng's hometown, the beautiful houses, wide cement roads, and complete public facilities are refreshing.

"Mr. Tan, welcome home."

Upon entering the territory of Tanjiacun, Li Yaohui slowed down. The village leaders, having received the news, came out to greet him. In the age of media, Tan Jincheng's convoy was photographed on the highway.

From the 15th to the 18th, Wei Lai was in the limelight. Footage of Tan Jincheng during his live broadcast on the 15th was also circulated in various clips. His car was recognized by a driver who was also going home for the Spring Festival on the highway and the footage was posted on social media.

Boss Tan's return home for the Chinese New Year has also become a hot topic on Douyin (TikTok).

"Where's your brother? Has he gone home?"

Tan Jincheng greeted the village chief with a smile. The village chief of Tanjia Village is now highly sought after. The old village chief has reached retirement age, and the current village chief is the younger brother of a friend of Tan Jincheng's from his hometown. He is a college graduate serving as a village official.

"Not yet, he won't be home for another two days. I'll take him to visit President Tan's house then."

His brother is a construction contractor. These days, construction work is tough, but thanks to the real estate boom of the past few years, he's doing alright. Also, there's been a lot of construction in Yicheng and Tanjiacun in recent years, and with the connections he has with the villagers, he doesn't have to worry about finding work.

"Are you collecting debts? Are debts easy to collect these days?"

The village chief is of the same generation as Comrade Lao Tan. According to rural tradition, he should be called "uncle". When they were young, their peers often joked about this.

Tan Liyan smiled and said, "I don't know the specifics either. My brother usually doesn't talk to me about these things."

These days, it's never easy to collect payments in the construction industry. His brother is a small contractor. Although he doesn't have to worry about work, he still has to deal with the usual problems. Collecting payments during the Chinese New Year has become his main task.

Tan Jincheng nodded: "Okay, come to my house for a meal after the New Year. We haven't seen each other for a long time. Let's go to the village committee now."

Tan Liyan looked pleasantly surprised. He got this position somewhat because of his brother's connections. If his brother hadn't been familiar with President Tan, he probably wouldn't have gotten it.

Ever since Mr. Tan and his family arrived home, he has been keeping an eye on information on the internet.

He scrolls through social media every day, searching for Tan Jincheng's public schedule. Ever since Tan Jincheng made a public appearance in Luzhou, he knew that the day he would return to his hometown was not far away. Sure enough, earlier today he saw a video of Boss Tan's convoy appearing on the highway.

I've been waiting all day.

Today is the 27th day of the twelfth lunar month, and there are still two days left before the Lunar New Year's Eve, which is the peak sales period. While Tan Jincheng was chatting at the Tanjiacun Village Committee, he learned that while sales at the Weilai store were booming, BYD's stores were also experiencing a surge in business.

The Qin DM series also set its starting price at 9.98 yuan, making it equally competitive. Weilai received complaints, and BYD was no exception. To a certain extent, when Weilai announced its price reduction, it was in tacit agreement with it.

The simultaneous price cuts by the two leading new energy vehicle manufacturers, bringing prices down to the 100,000 yuan range, have a far greater impact on the traditional fuel vehicle market than any single company.

With no response from the companies and sales booming for both automakers, dealers of joint venture brands are already in a state of panic.

"Never mind, let's lower the price first. Before the market reacts, we have to clear out the inventory as much as possible, otherwise we won't survive."

Nissan Sylphy dealers looked worried. The price cuts by the two new energy giants have had the biggest impact on Nissan. As the most direct victim, the only result for the Sylphy in trying to maintain its current price is that it will not be sold.

"How much should we reduce it? Where should we start?"

In the traditional dealership system, prices are relatively chaotic, and large dealerships also have a certain degree of pricing autonomy. Under the test of survival, they must respond as quickly as possible, rather than considering subsequent penalties.

"Let's go for 8.98 yuan. We need to react before Lavida does; they probably won't be able to hold out for more than a few days."

"As for where to start, need I say more? Shenzhen and Ningbo; oh, and Luzhou."

"We should also change our sales pitch and start promoting the resale value of gasoline-powered cars."

To clear inventory as quickly as possible, the only option is to sell it cheaper than Exeed, Galaxy, and Qin series. 89,800 yuan is just right, ensuring a certain profit margin while also having a competitive advantage of 10,000 yuan.

Currently, for the Sylphy, there is more room for price reduction. With an average terminal price of 10.86 yuan, the "cutting the price" is much smaller compared to the Lavida.

"Sigh, but I don't think this trend can be stopped. We need to think of other ways."

Nissan dealers in the Ningbo area also looked worried. As the main base of Weilai, other brands have been having a hard time in recent years. Even for gasoline cars, consumers are more accustomed to choosing the Yuechi and Tank series.

I finally breathed a sigh of relief after receiving the email from the general agent. The number of customers in the store has decreased significantly in the past few days, and the morale of the sales staff in the store is also very low.

"Let's contact Wei Lai and see if we can switch to Xinghe's agent. If that doesn't work, Aion is also an option."

The decline of gasoline-powered vehicles cannot be reversed, and there is no point in sticking to the status quo. Transforming into a dealership for new energy vehicles is the best way to survive. After four days of changes, the Volkswagen Lavida sales team is also having intense discussions about how to respond to the policies.

Since its launch in 2008, the Lavida has rapidly become SAIC's flagship model, maintaining annual sales of over 30 units for a long time. In 2020, its annual sales reached 44.83 units, accounting for a very high proportion of SAIC Volkswagen's sales.

This model, which netizens say is flawless and very stable, is of great significance to SAIC Volkswagen. Therefore, its sales absolutely cannot experience a precipitous drop. The sales figures for 2022 were nearly 10 fewer than the peak in 2020, which has already given them a major headache.

“Tell us how much you want to reduce it, and explain your reasons and methods.”

(End of this chapter)