2003: Starting with Foreign Trade

Chapter 1081 Inspection of Overseas Regions
"This must be the most abstract Olympics I've ever seen."

Paris was still vibrant at the end of July. Tan Jincheng, dressed casually, appeared on the streets of Paris, strolling leisurely with his entourage.

He has rarely traveled abroad over the years, partly due to environmental reasons, but the main reason is that he himself does not like to go abroad. No matter how much he tries to hide it, he cannot escape the notice of those who are interested.

Unless it involves specific business, he rarely contacts overseas officials and doesn't like to attend forums or conferences held overseas that don't involve industry. Perhaps this is one of the reasons why his business has been able to grow so large.

He understood perfectly well where his foundation lay; besides, he didn't have any bias towards foreigners; of course, the fact that his overseas market share was not high also played a part.

For a long time, overseas sales accounted for a relatively small percentage of total sales for Weilai. This was partly due to the time needed for Weilai to establish its market presence, and partly due to the limited promotion of new energy vehicles at the time.

However, as the proportion of Wei Lai's overseas sales increases, he does need to come out and inspect the situation; he can't let it grow unchecked.

In the first half of this year, the proportion of Welai's overseas sales has risen to 12.6%. According to the current upward trend, Welai's overseas share can be roughly increased to about 15% by next year, which is already a very large market share.

"It is indeed abstract, but that's in line with the French way of thinking; they're naturally this abstract."

Yu Liguo smiled and replied that no country could match our ability to organize such large-scale events. He came from within the system and carried a hint of pride in his voice. Other countries' large-scale events were at most a bit stingy, but something as abstract as this was indeed quite rare.

Beside Yu Liguo was Zhang Yong, who hadn't been seen for a long time. He also smiled; Yu Liguo was considered his former boss.

More than half a year has passed since he was removed from the position of CEO of Nezha. Without the pressure, Zhang Yong's spirits and energy seem to have improved a lot, and he seems to have regained the same enthusiasm he had when he worked at Weilai.

For more than half a year, Zhang Yong lived abroad, traveling around with his family. However, he spent most of his time in Europe, where he had the most contact with Yu Liguo's family. The two families were already familiar with each other, and their occasional gatherings abroad made them even closer.

Hearing that his former boss was coming to inspect overseas, Zhang Yong also came to join in the fun. After leaving Nezha, although he had received some assurances from his former boss, Zhang Yong did not immediately take on Wei Lai's business and focused more on recuperation.

Of course, he didn't completely ignore it; for the past six months, he had been observing Wei Lai's overseas business.

He can't go back to China unless he starts his own business. He's thought it through in the past six months. He does bear some responsibility for the series of problems that have arisen with Nezha. As the CEO, responsible for the overall operation of the business, he should have his own opinions.

The biggest problem is his lack of decisiveness. His boss has reminded him more than once that if he finds himself unable to resolve Nezha's issues, he should get out of the situation as soon as possible to avoid his current "disgrace".

Imagine how glorious it would be to leave at the end of 2022, the year Nezha topped the sales charts among emerging electric vehicle brands, and take an unknown emerging electric vehicle brand to the forefront.

Their professional careers won't just end like that.

"Let's go back to the hotel and talk. Lao Zhang, come along too."

The streets of Paris weren't as romantic as I'd imagined. There were so many tourists around, and he was a well-known figure globally, so just wandering around the streets all the time wasn't a good idea.

Yu Liguo winked at Zhang Yong, who gave an awkward smile.

"So, after a six-month break, are you interested in going back to work?"

Back at the hotel, Tan Jincheng didn't wait for Zhang Yong to speak before speaking for him. He said that Zhang Yong had ruined his reputation in China and it was impossible for him to go back. However, he could still handle some business in the overseas market and help Yu Liguo.

Yu Liguo is getting older and needs to cultivate a successor. If Yu Liguo has thoughts of retiring in a few years, Zhang Yong will be there to help him, so it won't be too hasty. Zhang Yong's abilities are undeniable.

Although Nezha experienced chaos and a significant drop in sales in 2023, this was largely due to its model and competition. However, its overseas business performed quite well in 2023.

If it weren't for the deep-seated problems and numerous issues, Nezha could have developed into a company like Leapmotor, which achieved sales of over 20,000 vehicles in June for the first time and has fully recovered.

Leapmotor has also begun to expand its overseas business. Thanks to Stlantis's extensive sales channels, Leapmotor's start in overseas business is much easier than that of Weilai.

"I do have that idea. Boss, do you think there's anything else I can do?"

They're all old acquaintances, so Zhang Yong didn't need to be coy. He shamelessly came over to watch the Olympics with his boss, wasn't that the reason?

After thinking for a moment, Tan Jincheng said, "Then you can start by assisting Lao Yu. Let Lao Yu decide on the specific job duties. Let's start with France and expand the French market."

Since 2023, the development speed of domestic new energy vehicles has been so astonishing that it has stunned the Europeans. These foreigners have stopped pretending. For example, France has directly excluded Chinese car companies from the subsidy list.

In terms of magnanimity alone, these foreigners are really not as good as us. If they can win, they pretend to be good people; if they can't, they turn on us directly. They are more adept at using local protectionism than anyone else.

The new policies in France are the most unique. This year, Weilai's market share in France has dropped significantly, as Tesla has taken it all away. Not to mention subsidies, in terms of tax rates, Tesla's overall tax rate here is about 7.8%, while Weilai's is 18%.

"Making a breakthrough shouldn't be a big problem. In the future, our vehicle business in the EU will no longer go through domestic channels. As for the German factory, Xingyuan is already ready to start production."

Yu Liguo had no objection to the boss's arrangement, but Zhang Yong would definitely need to prove himself again if he wanted to gain a certain status.

Currently, the production capacity of Weilai's factory in Germany is only 10 vehicles per year, most of which are the ES3 and ET5 models. Small cars are more popular in France, so some production capacity is planned to be shifted to Exeed Wish.

Produced in the EU, the car enjoys preferential tax rates and subsidies. Marketed as a smart and premium compact car, Xingyuan is expected to officially launch in the French market at the end of September.

In overseas markets, all vehicles are branded with the NIO logo. The NIO logo was unveiled at the Geneva Motor Show in March of this year and is quite attractive to users in France.

It's funny, but the best-selling small car in France right now is the Dacia Spring, a small SUV produced by Renault, with a five-seat, six-seat layout.

Well, just look at its specs and you'll know: a 45-horsepower electric motor, a 26.8 kWh battery, and a range of 220 kilometers, which is equivalent to the level in China around 2019, and it's still an entry-level model.

In 2024 in China, this thing would be equivalent to a slightly more advanced electric vehicle for the elderly. If any car company were to release such a configuration this year, they would be laughed at to death.

However, this car, which looks like a minivan for the elderly, has a starting price of 1.69 euros, which is about 13 yuan.

It's like a wild boar that's never eaten fine bran.

Even if the Star Wish model is downgraded, it can still crush this model in a fair environment. In terms of configuration, the Star Wish produced by Weilai in Germany has not been downgraded, and its intelligent features also meet EU standards.

Of course, Tan Jincheng was unwilling to be ripped off, so the starting price would definitely be much higher than the Dacia Spring. If it were sold at such a low price, these foreigners might not be happy.

Taking into account all costs, the starting price of Wish Star in France is roughly between 2.19 euros and 2.69 euros, which is about 17 to 20 yuan, with a gross profit margin of around 20%.

Competitors include models such as the Dacia Spring and Citroën C3. With the exemption of tariffs, it is highly competitive, and optimistically, it may achieve sales of 1000 to 2000 units per month at most.

The Star Wish model boasts monthly sales exceeding 5 units in China. Introducing this advanced model to the EU, along with some marketing efforts and the established brand appeal of Wynn in the EU, presents a promising opportunity.

Don't underestimate the sales volume of 2000 vehicles in a single month. In France, a country that is essentially a province, the total sales volume of passenger cars in June was only 18.17 vehicles, and the total sales volume of pure electric vehicles was only 2.98 vehicles.

Car sales in France have declined significantly after the cancellation of environmental incentives for pure electric vehicles produced outside Europe and the expiration of the previously implemented social leasing program.

A0-class cars hold a very important position in the French car market, accounting for about 20% of the overall market share. Establishing a foothold in this segment is crucial for the company's market expansion in France.

“Your task is not easy. StarWish is one of our key initiatives in Europe, and opening up the French market is of paramount importance.”

A car that sells for 60,000 to 70,000 yuan in China can sell for over 160,000 yuan overseas. Although most of that is taxed, consumers don't care about that. It just sounds so appealing.

Back in the day, we bought cars that cost more than others; now it's time to let foreigners experience it too.

As long as domestic promotion is done well, coupled with the increase in overseas market share, it will be a very good stabilizer for domestic sales.

"I understand, I will get it as soon as possible."

Zhang Yong nodded, not saying much more. This was a test for him, but also an opportunity. Of course, the boss wouldn't fire him if he failed to complete the task; he could certainly get a comfortable, retirement-like position in the overseas branch, but he shouldn't even think about advancing further. "Alright, then you guys handle the arrangements here. I need to go check out other regions; I can't stay here for long."

He has been in Europe for a few days now, and recently he has been mainly active in Germany, the UK, France and other places to investigate the market. The factories in Germany are already on track.

Under Robin's leadership, the Heysel factory in the UK has also been transferred to Weilai to produce new energy vehicles, but the production capacity is limited and most of the vehicles are only supplied to the UK.

Even if workers in old industrial areas are starving, they still have to put on a show. Tan Jincheng's side doesn't plan to expand production capacity; being able to supply the British Isles is enough, which saves a lot of trouble.

In Europe, WIL does have plans to expand its production capacity, but it doesn't intend to keep it in Germany anymore. It is currently exploring countries in Eastern Europe to diversify its production capacity, which would be much safer under the current circumstances.

"Uh, you're leaving already? Not going back to Germany?"

Yu Liguo was somewhat surprised. He wanted to introduce some people to his boss. Currently, Wei Lai has considerable assets overseas, especially in Germany, which has solved many local employment and tax issues. Tan Jincheng's visit is a major event.

They can solve problems related to employment and taxation, and are always welcome guests wherever they go.

Tan Jincheng shook his head: "There's no time. I have too many countries and regions to visit, but I can't stay abroad all the time. After all, our roots are in China."

"That's true. Then I won't keep you any longer. I'll treat the boss to a meal, and then we'll part ways."

As the market share in overseas markets increases year by year, the market share in the European region will inevitably decline. There are too many problems in the EU and subsidies have been eliminated. Therefore, since last year, Weilai has been vigorously expanding into other regional markets.

Compared to the EU, other regions still have a lot of subsidies, such as the Middle East. Speaking of Wei Lai's exports this year, what surprised him the most was the L series. He did not expect that the L series, as a range-extended electric vehicle, would be so popular in overseas markets.

In the first half of the year, through parallel exports, the L series exported a total of 1.89 vehicles, accounting for 10% of total sales, mainly to the Middle East, Central Asia and Russia.

So-called parallel exports are not conducted through official overseas sales channels, but are mainly completed by traders. Traders buy new cars in China, register them, and then export them to overseas markets as "used cars".

This is what is commonly referred to in China as zero-kilometer used cars. Parallel export has its advantages and disadvantages. The advantage is that the cost is low. Traders make a one-time purchase and then handle the rest themselves, so there is not much to worry about.

The downsides are also obvious. It will have a certain impact on the pricing system of the L series. In addition, since they are used cars, the after-sales service system overseas is not up to par, which will also have a certain impact on the brand.

Most car manufacturers currently tacitly approve of this export model, and Wei Lai is no exception. However, Wei Lai has some restrictions on parallel export regions, such as Mao Xiong. He has no plans to develop the market there, and he doesn't care what the traders do.

In addition, this matter is difficult to manage. Where there is market demand, there will be various commercial activities. However, now that the scale has become large, we need to pay attention to it. In the first half of the year alone, more than 3000 vehicles were exported to the Russian region through the parallel export model, which is already a considerable scale.

Since range-extended electric vehicles are quite popular in the Middle East and Central Asia, Weilai cannot ignore this situation. Currently, Weilai's plan is to gradually shift the overseas business of the L series from parallel production in the Middle East to branding.

Tan Jincheng also doesn't intend to abandon those traders. He will cooperate with them as a supplement to the Weilai channel, and take over the after-sales service system. This will also help to make up for the shortcomings before the brand image is affected.

Tan Jincheng's inspection tour this time was mainly to address these issues. With 10% of sales coming from overseas, the L series alone generates tens of billions in revenue annually from exports. It's definitely not acceptable to ignore these problems.

Besides the Middle East, Tan Jincheng also needs to go to Malaysia, Brazil, Australia and other regions. These are also the key development areas for Wei Lai, and he needs to understand them in detail.

After traveling around the world, Tan Jincheng returned to China in August. Having celebrated his 39th birthday, he appeared more composed. After disappearing from the internet for nearly a month, he seemed to have a clear understanding of his career.

Despite disappearing for a month, the domestic internet market remains incredibly vibrant. It must be said that the buzz generated by Xiaomi's car has significantly contributed to the growth of the new energy vehicle market, with the market penetration rate exceeding 50% since June.

This is much earlier than the predictions of various institutions. However, the penetration rate of over 50% also indicates that the market competition is fierce. Traditional car companies are no longer resorting to large-scale price cuts as before, since they don't have much effect anyway, so they might as well make money honestly.

"See? Here's the problem, isn't it?"

Ningbo was still incredibly hot. Tan Jincheng, who was lying in the shade of a tree in the small courtyard, chuckled at Zhang Xupeng. The two had made a bet before about Xiaomi's overheated marketing.

Zhang Xupeng rolled his eyes but didn't reply. His eyes were currently on a watch, a gift that Tan Jincheng had brought him from abroad.

"Actually, you can also try some marketing, but don't be so direct. For example, find some ordinary people to shoot short videos, etc. Also, pay attention to comments from ordinary users about the Flash brand online."

"If it's a warm and welcoming atmosphere, we can follow up promptly, after all, we've been a brand for over ten years."

Tan Jincheng continued speaking to himself, saying that electric vehicles have not sold as well as they have during the special period in the past two years. Since the shipment volume exceeded 10 million units in 2020, and reached 1386 million units in 2021, the shipment volume of Flash has basically remained in the range of 14 million to 16 million units in the past two years.

The growth rate has clearly slowed down significantly, and the market saturation is already very high. To maintain a certain sales volume, some improvements need to be made in marketing. Over-marketing is naturally not good, but not marketing at all is also not good.

"I know that, I've already made arrangements, and I've been studying Xiaomi's marketing methods recently."

Since June, although the SU7 has remained popular and its monthly delivery volume has long exceeded 10,000, its reputation has become polarized. As a phenomenal internet sensation product, any problem will be magnified infinitely.

After the test drive, Tan Jincheng knew that this was a model with both outstanding strengths and weaknesses. He had already expected the polarized reviews. Those who liked this car would really like it, after all, it was really cool and it made them feel very prestigious.

However, in terms of actual performance, it does have quite a few flaws, especially in terms of intelligent assisted driving. Incidentally, after several car companies have been promoting it, the official promotion of intelligent assisted driving has been significantly tightened.

Previously, the SU7's intelligent driving promotion did not use any words related to "assistance". However, in July, it quietly changed its intelligent driving marketing, revising it twice to officially change "intelligent driving" to "intelligent assisted driving".

Of course, the attitude of the official after-sales service is very important after the customer raises a question. For example, the windshield was questioned for affecting the cell phone signal inside the car. The official initially denied it, but later admitted it. Although they provided a solution of free replacement of the windshield or installation of a signal amplifier, it still made the user feel uncomfortable.

Xiaomi faces multiple challenges in terms of vehicle quality control, the stability of intelligent driving systems, and the responsiveness of after-sales service. Four months have passed, and tens of thousands of vehicles have been on the market. It's time to calm down and think things through.

Intensive marketing and promotion in the early stages of a vehicle's launch are neither right nor wrong; Xingyuan also did this in the early stages of its launch. However, after four months of delivery, the market has already entered a stable period. If they continue to push the market too hard, the subsequent backlash will be severe.

Unless, of course, your car has absolutely no problems.

In addition, there was a recall warning on August 15th, due to a software logic defect in the electronic stability control series, which could lead to an extended braking distance in extreme cases.

To put it simply, it's a brake issue. There's nothing wrong with a recall; there are many recalls worldwide every year. Xiaomi's issue this time doesn't involve many vehicles, so it's not a big deal.

However, if the hype is amplified, it will have a certain impact on a model that has been on the market for less than five months. In this case, it is best to actively reduce the hype.

Unfortunately, given the current situation, Lei Jun, who has set his sights too high, can't stop even if he wanted to.

In his speech in July, instead of trying to reduce the hype, he once again pushed the popularity of Xiaomi Auto to its peak by officially announcing the Ultra version prototype.

In addition, several traffic accidents involving the SU7 that occurred in the second half of the year were widely publicized, and the occupants and cabin remained intact, which objectively reinforced the "safety" label of Xiaomi cars.

However, the active dissemination by the official team and public relations team after the incident has also sparked huge controversy, with criticisms of exploiting the accident and using tragedy for marketing, raising questions about business ethics.

"According to what you've said, it is indeed possible by the end of the year."

In late June, major automakers began adding the word "assistance" to their marketing terminology and emphasized auxiliary functions at their product launches. This was clearly not a sudden change of heart from the automakers, but rather a response to the prevailing circumstances.

"We've done everything we could; now it's up to the higher-ups."

From initially mentioning the word "support" to being rejected by various companies due to commercial interests, and now fully embracing the word "support," Tan Jincheng has contributed a lot to this process. To be honest, even Da Zui, who works with him, is reluctant to mention the word "support."

However, in Tan Jincheng's view, if the market wants to develop healthily and maintain the survival of the fittest, the old internet marketing approach can no longer be used. Just look at the reputation of internet companies today.

The internet has a memory, especially since netizens nowadays like to revisit history.

(End of this chapter)