2003: Starting with Foreign Trade

Chapter 1069 "Who is this thing aimed at?"

"It's incredibly lively!"

During the annual National Day holiday, when tourism has become a daily topic and movie box office figures only generate limited discussion, the long queues at highway service area charging stations have captured a significant amount of attention during the holiday.

"If the first half of the year belonged to Wei Lai, then the topic of the following months should belong to chrysanthemums."

With the global celebration in the first quarter and the Star Wish event in the second quarter, Weilai occupied a huge amount of traffic in the automotive industry, and discussions about Weilai could be seen everywhere. It was not until September, after the Star Wish event entered a period of reduced traffic and production ramp-up ended, that the popularity began to decline.

"We've used up enough data for eight months of the year, that's enough for us, let's keep a low profile."

Traffic isn't always better the more it gets. Prolonged exposure can easily lead to public fatigue, also known as traffic backlash. The popularity of the new X7 came at just the right time, attracting a lot of "firepower".

It's better for a hundred flowers to bloom than for one flower to stand out.

It has to be said that although it still follows the same formula of being far ahead, the new X7 is truly far ahead this time. Tan Jincheng has experienced this X7 and compared with the previous two generations, this time the product has been greatly optimized in terms of product strength.

With orders surging, the new X7 in October will face its first test: its ability to ramp up production capacity.

For automakers, the ability to ramp up production capacity is not simply about producing faster; it is a core strategic capability that can determine an automaker's survival and ultimate market position.

If product definition and launch are the opening moves, then ramping up production capacity is the final assault that determines the scale of the victory.

A strong climbing ability is a deterrent to competitors, who know that once this automaker launches a blockbuster model, it can quickly seize the market, leaving them no time to react or adjust.

"If Seres' capabilities seem a bit lacking, but since it's backed by Chrysanthemum, their production ramp-up ability should be quite good, and their overall delivery capacity should be able to guarantee more than 10,000 vehicles per month."

"Yes, their pre-sale orders should be fairly substantial, and they should be able to sell them all within a few months."

The current automotive market is fiercely competitive, and the window of opportunity for a product is actually very short. The best sales cycle may only be six to 12 months. If a product cannot gain a foothold in the market within a year, then it is necessary to consider a model change or even discontinuation.

Therefore, in terms of pre-sale data, the data fabrication model of the Internet has become increasingly popular in recent years. In the past, everyone honestly reported that they had pre-sold 2000 or 5000 vehicles, which was considered a good result.

However, nowadays, there are plenty of models with pre-sales exceeding 10,000 units. Even the Nezha S, which sells only a few units throughout the year, and its supercar, dare to boast pre-sales exceeding 10,000 units. Subsequent models from other brands have been boasting even more outrageous claims.

The practice of "large orders" and "small orders" has been so outrageous that it's unbearable to watch. Although there was sales fraud in the era of gasoline-powered cars, it was nowhere near as exaggerated as it is now. The chaos in the industry is getting more and more outrageous every year.

A deposit of 10,000 yuan is practically a bestseller; it's truly a must-have for everyone.

A real order of 10,000 units will test the ability to ramp up production capacity. If it takes more than half a year to ramp up production, then even if it is real data, this model will face the risk of being redesigned or surpassed by competitors.

Production ramp-up is not just a matter for car factories, but for the capabilities of the entire enterprise system. For example, in terms of the supply chain, if you produce a blockbuster product but are "strangled" by a bottleneck in battery or chip supply, it may drag down the entire production.

Production line flexibility, quality management, financial strength, and logistics can all affect overall delivery capabilities.

How to transform a star product on paper into a cash cow in a parking lot is what the so-called new forces don't understand. They have no experience in the real manufacturing industry and they only know how to exaggerate the data.

The strength of StarWish lies not in its highly cost-effective pricing or so-called technology transfer, which other leading companies can also do, but not many companies can quickly ramp up production capacity.

The initial delivery volume of 20,000 vehicles reflects WIL's confidence in its own products, technology, and pricing strategy. The subsequent demonstration of its terrifying production ramp-up capability with the Xingyuan model, achieving a delivery capacity of 100,000 vehicles in just four months, is something that all car companies fear.

It took half a year for Exeed S01 to deliver more than 10 vehicles, but for Star Wish, it only took four months.

What are the current data points for the intelligent driving experience event?

The National Day holiday is a peak period for long-distance self-driving tours and an excellent opportunity for car owners to test and discuss intelligent assisted driving. As early as the end of September, WILAI had already pushed WILAI's latest imageless intelligent driving solution to a large number of car owners.

It was a month faster than Wei had anticipated at the beginning of the year.

At the same time, Weilai also launched a car owner sharing campaign on major social media platforms to conduct a large-scale popularization of real-world scenarios. This is a large-scale promotion of assisted driving by Weilai.

Level 2+ intelligent assisted driving currently has a penetration rate of approximately 15% to 20% in new energy vehicles. It is on the eve of a period of explosive growth, and major automakers are actively promoting it in an attempt to seize this new profit growth point.

Selling software often earns more money than selling hardware.

Among the various brands, the adoption rate of L2+ intelligent assisted driving varies. In the high-end E and L series, the adoption rate has exceeded 80%, and in newly released models, it has almost reached 100%.

The adoption rate of advanced intelligent driving features in Exeed, Galaxy, Aion, and other series is relatively low. The large number of deliveries and the small user base make some price-sensitive users hesitant to choose advanced intelligent driving features.

Another reason for the popularization of intelligent driving in October is that the Galaxy E8, a model developed in cooperation with Weilai, officially started delivery in October.

Geely's Galaxy is a brand new brand that focuses on electric hybrid vehicles. Vehicles named after the letter L are electric hybrid vehicles, while those named after the letter E are pure electric vehicles.

As the first pure electric vehicle in the Galaxy series, the Galaxy E8 is a product of collaboration between two traditional giants: Geely's quality and Weilai's intelligent driver assistance system, which are the main selling points of this mid-to-large-sized pure electric sedan.

The name E8 also suggests that this car is not cheap. With a price range of 17 to 23 yuan, it may not have a significant price advantage, but it still has a lot to offer.

Geely's vast platform, a body length exceeding five meters, the world's first 45-inch 8K borderless screen, a cool appearance, and a strong sense of technology.

The massive 45-inch screen inside, in particular, has generated a lot of buzz and sparked a frenzy online.

"Speaking of which, this model of yours isn't just designed to counter Lei Jun, is it?"

2023 was the inaugural year for the Galaxy brand. The L6 and L7 had already established initial brand awareness, and the E8, which started delivery a month ahead of schedule, allowed the Galaxy brand to achieve a dual-line explosion of hybrid and pure electric vehicles.

If they can get off to a good start, it will greatly enhance the overall momentum and technological image of the Galaxy brand, and could very likely propel Galaxy into the ranks of emerging first-tier players.

"What are you saying? Do I need to target them?"

Tan Jincheng didn't care about the 45-inch giant screen at all. What he cared about was both the configuration and the appearance, especially the appearance, which was quite similar to the Xiaomi SU7. The SU7, which had already started its promotion, had its appearance photos appear on the official website of the Ministry of Industry and Information Technology.

Lei Jun has also been gradually releasing images of the exterior, interior, and technical specifications of the first model, named SU7, to build anticipation for the launch event.

Shufu would never admit it.

"Haha, I don't believe you."

The sudden launch of the E8 is hard to say is not due to competition with Xiaomi. There are too many behind-the-scenes stories between these two companies. Originally, according to the E8's expectations, it was going to clash with the SU7 in terms of both publicity and delivery time.

"However, if you really want to stop them, the first thing you need to solve is the problem with this screen."

Pointing to the 45-inch 8K integrated borderless smart screen that calls for setting a Guinness World Record and is touted as the largest, this huge screen is indeed the biggest highlight and attraction of the E8's interior.

However, in Tan Jincheng's view, while creating such a gimmick was indeed a way to attract traffic, it was also the biggest mistake of the E8.

As Geely's strategic product in the pure electric vehicle field, the E8 needs to focus on stability rather than hype. Its exterior design is very beautiful, and the interior is also well done. With a body length of five meters and a wheelbase of nearly three meters, it is excellent in every aspect.

With the support of Geely's own SEA platform and the introduction of Weilai as a supplier, which has addressed their weaknesses in intelligent assisted driving, this model can be said to have no shortcomings for the time being, at least on paper.

With a price range of 17 to 23 yuan, and given the current low sales of the Dolphin EV and the newly launched and relatively expensive Tesla Model 3, the only comparable product on the market is probably the Weilai ET5.

The E8 also showed explosive growth during the pre-sale period, achieving very good results, which proves the popularity of this model.

However, all these advantages become uncertain in the face of Geely's early start. The reasons are whether Geely is ready and the production capacity of this giant screen.

With such a huge screen, whether BOE, as the supplier, can keep up with Geely's car sales speed and whether it can solve the yield rate problem will all affect the final delivery of the E8.

To put it bluntly, it's all about ramping up production capacity. If the large screen causes delays in subsequent deliveries, it will negatively impact overall reputation and future sales. Don't forget, there's another similar model, the SU7, coming soon. Although they've launched a month ahead of schedule, the E8 only has a few months left. In these few months, Geely's biggest challenge is ramping up production capacity.

"This is indeed a problem, and now that I think about it, we were a bit too hasty."

"Brother Shufu sighed. They had considered developing another E8 without the giant screen, but due to a series of marketing efforts, the giant screen had become the biggest highlight of the E8, capturing users' minds."

If an E8 without a large screen were developed, users simply wouldn't buy it.

"Other components are fine, and our intelligent driving system won't hold us back. Whether we can achieve monthly sales of over 10,000 units depends on this giant screen."

Geely is quite optimistic about the E8. An average monthly sales volume of 5000 units is considered passing, while monthly sales of 8000 to 10,000 units would be considered a blockbuster. Geely can maintain its position in the top tier by lowering prices and upgrading the model.

"The best way is for you to send a team of engineers to BOE's production line to work with them to solve the yield problem. We must improve its yield to the level of commercial mass production as quickly as possible."

According to Tan Jincheng's expectations, this thing is just a gimmick right now. The initial yield rate will not exceed 50%. If the yield rate is not improved during the production ramp-up period of these few months, this car is very likely to be a "failure".

Of course, Tan Jincheng's failure was that he couldn't meet his expectations. With Wei Lai, Geely's appeal, and the E8's product strength, monthly sales of 5000 units should have been achievable.

With a price range of 20 yuan and an average monthly sales volume of 5000 units, it can be considered a decent product.

“Your suggestion is good. I’ll arrange it right away and have the engineering team set up on BOE’s production line immediately. We’ll also discuss the procurement volume with them for the next few years.”

As the company with the best production capacity ramp-up in the domestic new energy vehicle industry, Brother Chuanfu invited Tan Jincheng to visit the Galaxy E8 production line so that he could offer more suggestions. There were some things they hadn't thought of, and Tan Jincheng could help them supplement their opinions.

In retrospect, this invitation was the right one. Tan Jincheng astutely identified the biggest problem with the E8 and provided a solution.

"We were too optimistic before, and we need to reflect on that."

Furthermore, Brother Shufu didn't expect this; he was simply blinded by profit. While acknowledging the strength of his own product, he subconsciously overlooked some weaknesses. No wonder Tan Jincheng could come up with the best solution with just a casual reminder.

In addition to sending an engineering team to the production line and setting up production capacity, Shufuge already has several plans in mind, such as introducing other top screen suppliers like Huaxing Optoelectronics and Tianma, and even penetrating upstream to lock in key raw materials.

In addition, a dedicated screen production line was set up on the E8 production line to optimize the production process, and so on.

"We still have a lot to learn about new energy vehicles."

Galaxy has performed very well this year. Geely has made its mark in the new energy product line with JIK, Lynk & Co, and Galaxy, and has now been able to seize a certain market share from BYD in the hybrid market.

The penetration rate of new energy vehicles within the group has reached 36%, but they are still much weaker in the pure electric vehicle sector. The most crucial point is that Geely has no experience in creating blockbuster models so far.

Geely's current new energy product line is similar to a smaller version of BYD, taking a volume-driven approach. Although it has the Galaxy L7 with monthly sales exceeding 10,000 units and the Jike 001 with monthly sales exceeding 10,000 units multiple times, its overall performance is not stable.

Even the Galaxy L7 only achieved monthly sales of over 10,000 units after June. Geely does not yet have a model that starts with an expected sales volume of 10,000 units; the E8 is their first.

"There is a lot of preparation to be made for a blockbuster model. Every aspect needs to be carefully considered, especially for strategic products."

Tan Jincheng was not modest at all. He believed he had a lot of experience in creating blockbuster models. He said that in China, besides him, only Boatman Brother had such experience.

Yu Dazui could barely be considered half a person. Whether he can become the third person depends on the production ramp-up of the new X7. As long as the monthly delivery of the new X7 meets the target and can quickly digest the pre-sale orders, Dazui can become the third person.

"Isn't Xiaomi's press conference at the end of the year? You still have two months."

The ET5 and ET7 are more executive-level, and they are quite different from the Galaxy E8 in terms of market differentiation. Although Brother Chuanfu doesn't admit it, he always believes that the E8, in addition to being a strategic product of Geely, is aimed at the SU7.

In his previous life, he didn't see the official launch of the Xiaomi SU7 and didn't know much about its specific sales figures, but judging from Lei Jun's continuous output over the past few months, Xiaomi has made ample preparations, at least in terms of marketing.

Since National Day, Xiaomi Auto's official account has been continuously releasing pre-research videos, ranging from motor speed to integrated die-casting machines and imageless intelligent driving solutions. The aim is to continuously strengthen the public's perception of Xiaomi Auto's strong technology and reverse the prejudice that it is just an assembly plant.

I must say, Tan Jincheng has really opened his eyes when it comes to marketing. He can talk a lot about a 9100-ton integrated die-casting machine. There are already six of these things in Weilai.

The classic rhetoric is to create a dream car comparable to Porsche and Tesla. The official team and various car bloggers also constantly release spy photos and videos of the SU7 undergoing road tests in various places, keeping fresh material and topics every week.

To be honest, it really whetted his appetite. Even he wanted to see what kind of sales this model would generate after it was launched, and whether it would become a bestseller like the new X7.

Shufu rolled his eyes at Tan Jincheng: "I already said it's not targeting them."

It's quite interesting, really. Since Wish Star quickly captured the A0-class market with a surprise attack, there has been much less interaction between Wish Star and BYD. Instead, Geely, which is also from Zhejiang Province, and Chrysanthemum, which tried to interact for the first time in September.

Meanwhile, the boatman started interacting with Xiaomi, with the two visiting each other's factories and occasionally releasing videos from a "third-party" perspective, generating a lot of buzz.

The fact that Wei Lai had intruded into their core territory and was able to use a single model to shape their production capacity plans and expectations was somewhat hard for Boatman to accept.

The new Dolphin and Seagull models were launched just in time for the peak sales season in September. Although the two models, which were relaunched as sport versions, were also heavily promoted, unfortunately, the hype has already died down.

To make matters worse, in September they ran into the new X7. Faced with the overwhelming popularity of its large grille and distinctive grille design, no car company dared to claim they had the ability to defeat it.

These two models have had a rough year, but in terms of product strength, they are still quite good after the upgrade. With their excellent cost performance, they can at least maintain annual sales of 10 to 20 units. It is definitely not a failure, but rather that they have not met expectations.

It might have been better if the re-release in September hadn't coincided with the new X7.

"There's really no need to target them. We're a traditional car company, so we can learn some of the marketing techniques from emerging internet companies, but there's no need to treat them as competitors."

“Geely and Xiaomi’s user groups do not overlap at all. Even if your E8 looks similar to theirs, it’s impossible for you to steal their users.”

Tan Jincheng completely ignored what Shufu Ge said and continued talking to himself.

Emerging automakers have their advantages and lessons to be learned, but they are still very different from traditional automakers. No matter how much they boast, given their size, they will not pose any threat to traditional automakers for at least the next five years.

Even for Seres, to pose a threat to traditional automakers, it needs to achieve annual sales of at least 100 million vehicles, a feat that took many years to accomplish.

Moreover, although Geely has made significant breakthroughs in new energy vehicles and accelerated its transformation, its sales base is still mainly based on gasoline vehicles.

Even if Geely maintains the same pace of progress as this year and has a huge sales volume of gasoline vehicles next year, its penetration rate of new energy vehicles will most likely only reach 40%, which is already very, very good.

However, it would be quite interesting if Geely could have a showdown with Xiaomi, and he's looking forward to it more and more.

“Our system is different from yours.”

As Shufu is well aware of, Geely currently has a total of six independent brand systems for new energy vehicles, including battery swapping models. This does not include hybrid models from traditional brands such as Volvo, Emgrand, and the newly acquired Smart.

Of the six systems, the battery swapping system Ruilan is not worth mentioning as it focuses on the B-end market, Geometry is barely surviving, and Polestar is basically dead. The only competitive ones are Galaxy, Geek, and Lynk & Co. The market defines Geek, which operates independently, as a new force.

Lynk & Co and X-Co have significant resource conflicts, and currently, the only product that can achieve high sales volume and has strategic significance is Galaxy.

It can be said that among so many brands, only Galaxy, Lynk & Co, and Geek have a chance of success. At present, they have no intention of creating new brands. If Galaxy performs poorly again, their new energy strategy will be meaningless.

Galaxy's hybrid technology has already been a success. If the E8 performs even better than pure electric vehicles, then Galaxy will be able to support their new energy strategy.

Of course, it can also recover some of the losses caused by the delayed launch of A0-class models due to the obstruction by the authorities.

It's true that Xiao He both brought them ruin and success.

(End of this chapter)