2003: Starting with Foreign Trade

Chapter 1072 Old Zhang got fired

An accomplished entrepreneur asked him about his company's business, something he hadn't expected before his visit. Usually, people politely ask visitors for their opinions, but these are usually just polite words.

However, judging from Mr. Ren's expression, it was clearly not just a simple matter of politeness.

But it doesn't matter, he's not as naive as he used to be.

"Looking at this issue from the perspective of a single company will yield little benefit. It needs to be analyzed from the perspective of the industry as a whole and from the user's point of view. It is difficult for a single company to make a judgment."

“Take assisted driving as an example. We have called for it countless times, but the chaos still exists and is showing a trend of getting worse.”

Old Ren smiled and pointed at Tan Jincheng, but didn't say anything, instead gesturing for him to continue.

Tan Jincheng laughed as well: "Haha, I'm not using this example to target your company or President Yu. This is true for the entire industry. Of course, I can understand that companies need to use certain methods to survive."

"But if things continue like this, something big will happen sooner or later, and then we'll all be in trouble."

While Da Zui boasts a lot about driver assistance systems, he has at least made real progress in technological upgrades, rather than just making empty promises. Most companies, on the other hand, only talk the talk but don't walk the walk, or they simply don't have the capability to deliver.

"Bad money drives out good money; ultimately, it's a lack of long-term thinking."

"That's right, spot on."

While the new energy vehicle industry appears to be booming, it still faces many deep-seated problems. In addition to rampant exaggeration in advertising, there is also serious homogenization, which is gradually showing a trend similar to that of the mobile phone industry.

Since last year, more and more car models have become similar in details and configurations, indicating a decline in innovation.

When technology fails to achieve true differentiated innovation, everyone can only start piling on features. Even without price wars, the industry will fall into a bottleneck. Compared to the decades-long enduring popularity of gasoline-powered cars, the competition in electric vehicles is much fiercer, and the industry reshuffle is happening much faster than that of gasoline-powered cars.

"Only when the entire industry is doing well can companies thrive; of course, companies also need to have their own core competitiveness. As for weaknesses, having a few weaknesses is not unacceptable when you have core competitiveness, because nobody is perfect."

Chrysanthemum has a strong technical system and a stable operational foundation. Although there are many problems, as long as the core competitiveness remains unchanged, some minor issues are not really problems.

In the office, the founders of the two companies from different eras chatted for more than half an hour. Neither of them touched on specific business matters. The atmosphere was very harmonious. At 79 years old, Ren is indeed old and no longer needs to manage specific affairs.

Will Xiao Tan work until I'm this age?

After the conversation ended, Mr. Ren escorted Tan Jincheng to the office door, and then suddenly asked a question that left Tan Jincheng completely baffled.

"I don't know? I can't answer that question, but perhaps not."

Working until 80 years old means working for another 40 years or so, which is enough to drive anyone crazy. Even with the bug period over, he can't be sure if the major companies will get better and better under his leadership.

Perhaps the best model is to entrust management to professional managers, like Midea does. Once a company matures, the founder's role becomes more of a spiritual symbol and a balancing force.

Life is short, only a few decades; we should always leave ourselves some time to enjoy it.

"It was just a casual question, don't take it too seriously. We can have a more in-depth discussion next time."

He quite admired this young man, and the past half hour had given him a general idea of ​​his personality.

Tan Jincheng smiled and nodded. These questions today were definitely not just casual remarks, but he didn't care much. Without any intention to invest, this visit was just a formality for him, and it was quite easy.

As Tan Jincheng stepped out of the Chrysanthemum headquarters, he was surrounded by reporters who had rushed to the scene. From the moment he entered the Chrysanthemum headquarters until he left, he had stayed there for more than three hours. For a business tycoon who was always racing against time, there was a lot that could be accomplished in three hours.

"Mr. Tan, is your visit to Juhua related to Juhua's spin-off of its automotive business and the opening of its equity stake? Are there any opportunities for cooperation between the two companies?"

There are rumors circulating that ByteDance's advertising platform will invest in a new company founded by ByteDance's AI division. Is this rumor true?

The excitement surrounding the Guangzhou Auto Show is still going strong. It has just ended, and some reporters haven't even had time to leave and return to their own cities yet. They rushed from Guangzhou to Shenzhen to attend the signing ceremony between Chrysanthemum and Changan Automobile yesterday.

Tan Jincheng's sudden visit caused a stir among the reporters who were waiting nearby.

"Today was just a visit to Mr. Ren; we didn't discuss any specific business matters."

Surrounded by reporters, Tan Jincheng only gave this one answer before quickly leaving, leaving the reporters bewildered.

"This is quite a lot of information."

Although Mr. Tan did not respond directly, his words contained a lot of information. The reporters at the scene were both excited and somewhat confused. Were the rumors true or false? What did Mr. Ren and Mr. Tan talk about during their meeting?
This is really captivating.

Tan Jincheng's hasty departure left the reporters with two questions. However, he also received some information on the spot: the chaos surrounding Nezha Auto had intensified, which a familiar reporter had just quietly told him.

Just now, Zhang Yong was removed from his position as CEO and replaced by the founder of Hozon Auto. This internal power shift is the strongest signal of internal turmoil.

In the past two months, Nezha Auto has experienced several internet memes. First, its official website was inaccessible and took a day to be restored, which generated considerable buzz and even trended on social media.

Then came an even more abstract and memorable scene: a car salesperson in the live stream learned from viewers that their entire sales team had been laid off. This abstract and memorable scene turned this once-glorious new energy vehicle into a laughing stock on the internet in the fourth quarter of this year.

Generally speaking, unless the CEO himself intends to leave the company voluntarily to join another company or start his own business, investors and the board of directors will only take such extreme measures when the company's strategy fails and sales plummet.

This directly negates the previous marketing and product strategies centered around Zhang Yong. This is exactly what is happening with Nezha Auto now. Starting in September, Nezha Auto's sales have plummeted.

With only one month left, Nezha Auto's annual sales are just over 100,000 units, barely reaching 40% of the initial target of 250,000 units. This is probably one of the reasons why Zhang Yong was replaced.

However, strictly speaking, Zhang Yong's actions were not entirely without merit. After joining Nezha, Zhang Yong made significant contributions to this emerging brand.

Zhang Yong has transformed an unknown second-tier emerging brand into the top-selling emerging brand last year, introduced new investors, actively pursued an IPO, and turned the brand into a "viral" product across the industry. In any case, Zhang Yong has proven his capabilities.

Of course, it's not without its flaws. From a business management perspective, Zhang Yong's strategy for Nezha was to first boost sales and then target the high-end market, while actively seeking financing and pursuing an IPO in the process.

This wouldn't normally be a problem; most companies develop this way. However, Zhang Yong overlooked Nezha's biggest problem, or rather, it was a problem that he and the entire Nezha management team deliberately ignored.

The failure to break into the high-end market marked the beginning of Nezha's downfall, but the underlying reason was actually the result of long-term accumulation: Nezha had no research and development capabilities and a serious lack of technological reserves.

The new products they release each time are even inferior to those of leading brands from one or two years ago, and they are also significantly lagging behind emerging brands. It's like when Apple released an iPhone 13 or even an iPhone 12 in 2023. They can sell, but they can never be considered high-end.

Overall, Nezha has accumulated too many problems. Its brand influence and technological foundation are not worthy of the status of a first-tier brand among emerging brands. Forcibly elevating it to the status of a first-tier brand without a solid foundation in technology is the biggest mistake of CEO Zhang Yong.

It's worth noting that he also serves as the general manager of Nezha Auto's product R&D center, directly managing Nezha's product planning department. The poor product performance is directly related to him.

"has resigned?"

Instead of returning to the hotel, Tan Jincheng went straight to the airport, where he dialed Zhang Yong's private number in the car.

"Yes."

Zhang Yong's voice sounded somewhat low on the other end of the phone.

"Any plans?"

"Let's rest for a while first."

Zhang Yong let out a sigh of relief. The weather in November was already getting cold. He was in the capital city, and the increasingly cold weather seemed to perfectly match his current state of mind. Nezha Auto's problems were serious, but the inability to raise new funds was the main reason for its accelerated demise.

After that supposedly 70 billion yuan financing deal fell through, everything was already set in stone, which was largely due to Tan Jincheng's direct denial at the time.

With nearly 20 years of investment experience, Tan Jincheng is a well-known figure in the investment circle. His words carry a lot of weight, and from Xiaomi to ByteDance, any investment project he personally participated in has yielded considerable results.

During the peak of the BAT (Baidu, Alibaba, Tencent) internet era, he was the only one who managed to secure huge sums of money from all three companies while remaining a nobody. He sold his two apps, 91 Assistant and Wandoujia, to Baidu and Alibaba respectively at their peak valuations, and still managed to get investment from Tencent. It's rare to find someone who can be so successful in all directions without offending anyone.

Tan Jincheng's direct denial led to no further investment from investors. Investors aren't stupid; rather than playing the role of a so-called white knight at this time, they'd rather wait for the company's real problems to surface before entering the market and picking up bargains. Since the first reports of layoffs in early September, Nezha has undergone multiple rounds of layoffs, affecting multiple departments and even including recent graduates. The entire company is in a state of panic, and morale is low.

This time, it was the top management of the group who were being optimized. In fact, many offline dealers have already withdrawn from the network due to losses, no cars to sell, broken after-sales support, and other problems. This is the most fatal blow to Nezha, which is heavily reliant on traditional channels.

The lack of cars to sell is also related to this, namely, the fact that Jinsheng New Era stopped supplying battery cells due to overdue loans. After this news spread, other core suppliers also stopped supplying, directly leading to the shutdown of factory production lines or a significant drop in production capacity.

It can be said that Tan Jincheng and Wei Lai's series of actions accelerated the deterioration of Nezha. Of course, the most important factor was the direct competition between the Star Journey series and the Ocean series, which made the market in which Nezha was located the most fiercely competitive red ocean in the entire market.

Nezha became the biggest cannon fodder.

"It would be good to take a break. My suggestion is to travel abroad, see how things are developing overseas, relax, and spend time with your family."

As a CEO, Zhang Yong was qualified in both Weilai and Nezha. Nezha's technical slowness also reflects Zhang Yong's professionalism to some extent. He strictly adhered to the agreement he signed with Weilai when he left, and did not have any impact on Weilai.

This is also why Tan Jincheng is willing to continue giving him opportunities; it would be a pity to let such a top talent with professional ethics continue like this.

However, from the perspective of his personal career and market predictions, Zhang Yong is not qualified. Whether it was right or wrong for him to give up his job in Weilai to join Nezha is hard to judge, as it involves personal career planning.

However, his market predictions were inadequate. He blindly catered to capital and operated the company solely based on traditional methods such as sales volume, premiumization, financing, and IPO, without considering the company's actual situation.

To be frank, they were a bit too anxious, afraid of being pushed out of the competition, but in the end they were pushed out anyway.

Nezha claims to be a new force, but in terms of both product and technological accumulation, it is far inferior to other new force brands. Its products are not competitive at all, and its best-selling model is still following the path of Wuling Hongguang MINI EV.

While they are cheap, A00-class products are simply not enough to support a new brand. This is also why Leapmotor faced difficulties in its early operations. In fact, any independent car company, without a strong background, will find it difficult to survive by relying solely on A00-class products.

Either you have a major financial backer, or you have other products. In addition to its A00-class products, Wuling not only has a major financial backer, but also other products, which is why it is able to maintain its dominant position in the A00-class market.

Nezha, Leapmotor, and even Zhidou before its acquisition all share this problem. If Zhidou hadn't had a major investor like Wei Lai, it would have followed the same path as Nezha. This is also the main reason why Leapmotor is transforming into the extended-range market.

"Okay, I'll think about it."

Zhang Yong's heart stirred, and he was also somewhat moved.

When he was down on his luck, abandoned and scorned, his former boss was the first person besides his family to call and comfort him, suggesting he go abroad for a while. Although he didn't explicitly say anything, it was a veiled indication that there was a possibility of him returning to Weilai.

This can be seen as providing him with a backup plan, allowing his career to continue.

He said he would consider it, but he had actually already accepted it. However, if he wanted to rejoin Weilai, he would need to prove himself again. After being away from the Weilai system for so many years, he might not be able to adapt to the current Weilai.

Sending him abroad would also allow him to interact more with Wei Lai's overseas team, see how they operate, and understand the current state of the international market. Additionally, it would reduce public attention and allow the matter to cool down.

Flying back to Ningbo from Shenzhen, the story of Nezha and Zhang Yong has become a trending topic on the internet. The rumors of its bankruptcy are almost a fact, and Nezha car owners, especially those who have owned their cars in the last few months, are truly heartbroken.

"Sometimes trying new things comes at a price, especially for a new company's first customers."

Tan Jincheng also sighed. More and more capital players are pouring in, creating all sorts of products, but few companies can survive. This month, in addition to Nezha, another new force has also failed, namely Qoros Auto.

Even with a large company like Chery backing it, Qoros couldn't survive, which shows that trying new things comes at a price.

"Yes, the pace of market reshuffling is getting faster and faster, which is definitely a bad experience for consumers."

“Back when our Yuechi A1 was first launched, consumers had the same mentality. To be honest, we didn’t have the confidence to really make Yuechi a success.”

For every car company and every model, the first batch of owners are often the most loyal, but they are also often the ones who suffer the most. When a new model is launched, apart from the price difference, the main difference is in quality.

These are all unavoidable; of course, the most unfortunate are those companies that have gone bankrupt, which don't even have after-sales service and have become nothing more than lumps of iron.

"Does the boss have something on his mind?"

Wang Fengying, the general manager of Yuechi Automobile, keenly sensed the hidden meaning in Tan Jincheng's words.

In 2023, Yuechi Auto underwent a comprehensive transformation and consolidated its position in various market segments. The Yuechi series fully embraced new energy vehicles, shifted production capacity towards the Xinghe series, and the Tank series continued to maintain its leading position in the hardcore off-road market while accelerating the expansion of its hybrid vehicle portfolio.

The growing pains of transformation are obvious. The Galaxy series has not been able to replicate the blockbuster genes of the A1, but it has maintained its competitiveness, with average monthly sales of 1.2 to 1.5 units. If overseas sales are included, the figure would be even higher.

Overall, the Yuechi series, which has come down from its peak, has been able to maintain its current position during the transition period, and Wang Fengying's ability is crucial. In addition to firmly holding the top spot in the hardcore off-road vehicle market, the Tank series has successfully opened up a new track in the new energy off-road vehicle market, which is one of the biggest highlights of Yuechi Auto in 2023.

It has to be said that the Tank series has been very important for Yuechi Auto in the past two years, and its development has been very smooth. With the addition of Yangzi Pickup, the combination of urban SUV, professional off-road vehicle and pickup truck has made Yuechi Auto, which looks very "tough", quite successful this year.

"I do have some ideas, some reflections on the issues between Nezha and Qoros, and it's also a kind of publicity gimmick."

The fate of Nezha was truly unexpected for users and a blow to the appeal of new energy. Last year's sales champion has failed to survive this year. Who could have imagined it?

Such a fate makes users hesitant when choosing new energy products.

"Is it because of November's sales figures?"

In October, the overall sales of Weilai New Energy Vehicles exceeded 300,000 units for the first time. However, in November, the overall sales were only 70 more units than in October, almost the same as in October. The L series also saw an increase of only 600 units.

It is evident that current market growth is already slowing down. If WILTE wants to stabilize its market position, it needs to do something more. Since the price war began at the beginning of the year, WILTE has been much more low-key in terms of pricing in the second half of the year. Tesla has also frequently lowered its prices, coupled with BYD's counterattack and Seres' resurgence, so the pressure is still considerable.

"Pretty much, but we don't need to engage in a price war anymore; price alone is useless."

"That's true. Just like with houses, the more prices drop, the more people hold their breath and wait."

"Here's what I was thinking: since this is our 15th anniversary, let's do an event."

Weilai's first model, the Yuechi A1, was launched in early 2010. It will be 15 years old by early next year, and the group company will also be 15 years old. Weilai can take this opportunity to give some feedback to users.

"What I mean is this: for the first batch of customers of each of our models, we'd like to offer a limited-time purchase discount. This could be a discount on an existing car, or a direct discount of a certain amount. Please try to come up with a plan as soon as possible."

"As for the specifications, just refer to the level of support I gave to the first batch of users when I was with Flashpoint."

Wang Fengying and Li Xiang were both shocked and exclaimed in unison, "Such a grand gesture?"

Back then, the boss spent over 6000 million yuan at Flashcar, making a name for himself in the two-wheeled electric vehicle industry with his extremely extravagant spending, which established Flashcar's historical status from then on.

"Is this a big deal? If the number of customers wasn't so large, I would have liked to give the first batch of customers a free car replacement. Unfortunately, we can't afford to do that."

The pioneering models, such as the Yuechi A1 and ES6, were relatively easy to deal with. In their first month of delivery, the number of these cars ranged from a few hundred to a few thousand. However, the first batch of owners in the last two years have been paying tens of thousands of yuan.

For every model, offering free car replacements would be too much to sustain with the company's cash flow. The best approach would be to offer trade-ins based on condition, allowing customers to directly exchange their old car for a new one or simply pay a small additional fee to purchase a similar or other model, along with other incentives.

"Oh, by the way, the Exeed series and other models that have been on the market for less than two years will not participate in this event, there's no need for that. However, we can offer these car owners some other preferential policies, such as free maintenance and renewal discounts."

"It's based on the initial sales volume, with a maximum of 10,000 vehicles. The scale can be larger. You can come up with a plan and I'll approve it."

“What about the budget?”

Li Xiang was somewhat excited. It was time to stir things up again. Wei Lai hadn't made any major moves in the second half of the year and needed to withstand pressure from all sides. The boss was also trying to balance the power of various parties for the sake of the group, using alliances and counter-alliances to reduce the pressure.

Now, we can finally stir things up again. For our 15th anniversary celebration, we can't just say we're waging a price war, can we?

Tan Jincheng thought for a moment, "Then let's make it 15 billion, to correspond to the 15th anniversary."

Wei Lai can certainly come up with 15 billion yuan in cash. He can use it to give back to users and also boost sales, achieving the best of both worlds.

(End of this chapter)