2003: Starting with Foreign Trade

Chapter 670 Second Appearance at the Guangzhou Auto Show

Changzhou.

This is Tan Jincheng's second visit to the Huanghai Automobile Factory.

"Currently, Huanghai Automobile's production line is not capable of producing new energy buses. If we want to produce new energy buses, we need to modify the production line."

Tan Jincheng nodded. A certain car company that started here used the qualifications and some technology of a certain company, but it would be nonsense to say that a certain company could manufacture new energy vehicles.

Why? Just because his steering wheel isn't even facing the driver?

Huanghai Automobile's existing technology is insufficient to manufacture hybrid or pure electric buses. However, Hangxin Era has been established for several years and has been working hard to improve its technological accumulation.

Moreover, Hangxin Times has some advantages in the bus sector. It has maintained close cooperation with Dongfeng Motor in recent years and has accumulated certain experience in electric vehicles.

What Huanghai Auto doesn't have, Hangxindai does.

Hangxin Era provides powertrains and battery components, while Huanghai Automobile modifies the platform, allowing the two parties to form a cooperative relationship. The plans made several years ago have finally come in handy.

"Then let's set aside one production line and upgrade it. Let's start with hybrid technology and develop hybrid buses."

In the field of new energy vehicles, Weilai still has a great opportunity.

Although European, American, and Japanese car brands started researching and developing new energy vehicles quite early, only a few companies have actually achieved significant results. Internationally, there are companies like Tesla, while domestically, there's BYD. BYD is not lagging behind in new energy technology.

Why do traditional European and American automakers struggle to make breakthroughs in new energy technologies? Simply put, it's because making money is too easy, and there's no need to invest in uncertain industries.

Just like the iPhone, it introduced various innovations during the years it seized the market, but after it dominated the market, it had no more highlights.

This is a common problem for large companies as they grow, and it's also a common problem in human nature.

After a lifetime of hard work, can't we at least enjoy ourselves?

"There are still plenty of opportunities. Let's start with the government procurement projects and try to get some government orders. But more importantly, let's develop our technology."

Starting in 2009, the government launched the "Ten Cities, Thousand Vehicles" promotion project for new energy vehicles.

By providing financial subsidies, the plan is to develop 10 cities each year over a period of about three years, with each city launching 1000 new energy vehicles for demonstration operation, covering public transportation, taxis, government vehicles, municipal services, postal services, and other fields in these large and medium-sized cities.

The main purpose of this plan is to promote new energy vehicles and strive to achieve a 10% market share for new energy vehicles by 2012.

The government spends money and time cultivating the market, so of course we have to seize such a good opportunity. If we have the conditions, we should go for it; if we don't, we should create the conditions.

"It is indeed worth a try. Currently, Huanghai Automobile's annual production capacity of 6000 vehicles is actually not usable. It is entirely feasible to set aside a production line for renovation."

Zhang Yong nodded. The boss liked new energy, so what else could he do but give it a try?

Huanghai Auto's current production capacity is indeed somewhat wasteful. After Wei took over, even with the boss's connections, they couldn't sell 6000 vehicles a year. I don't know what they were designing it for; it's such a waste.

During the critical period of Yuechi A1 sales, the actual controller and manager of Weilai Auto actually took time out of their schedules to inspect the Changzhou factory before the Guangzhou Auto Show, which attracted the attention of many people in the automotive industry.

In terms of status, Weilai Auto is nothing in the automotive industry, but in terms of sales, even the CRV has to use discounts and promotions to block the Yuechi A1 during a season when sales are not a problem. This makes people take Weilai's actions seriously.

"Is this a move to deeply penetrate the SUV market? Following the path of Great Wall Motors?"

A few days ago, an article appeared in the news about the leaders of Beicang District inspecting the Weilai Automobile Factory. The video footage mentioned the new model. Subsequently, Tan Jincheng and Zhang Yong appeared in Changzhou.

While inspecting Huanghai Automobile, Tan Jincheng will certainly also visit the construction site of Mitsubishi's factory under construction. The main model produced at Mitsubishi's Changzhou factory is the ASX.

This inevitably leads to speculation.

In terms of product line, Mitsubishi doesn't have any well-known sedan series in China, and its main focus is on the SUV segment. The ASX produced at the Changzhou plant is a compact SUV.

To some extent, the ASX is also one of the competitors of the Yuechi, while the Outlander, due to its different pricing and positioning, can hardly be considered to be in the same category.

The SUV market will be even more competitive next year and beyond.

Upon hearing the news, the leadership team in CZ City also sent people over to see what Boss Tan's intentions were. Yuechi was selling so well, but their current production capacity seemed to be not very good.

Only with three shifts can production capacity be barely maintained.

With so many businesses in Changzhou, Tan Jincheng couldn't easily brush off the other party. He would need their cooperation in the future and hoped to gain more benefits in the future.

"New energy buses?"

Representatives from Changzhou lost interest upon hearing it was this kind of thing. While policy support is important, in many places, beyond subsidies, there's more talk than action. The vast majority of automakers are unwilling to increase investment in new energy vehicles, simply because everyone knows the development cycle is too long.

The government's heavy subsidies were merely aimed at achieving a 10% market share for new energy vehicles by 2012; they were not making any money at all.

Even local governments have a very ambiguous attitude towards new energy.

"Yes, the main purpose is to inspect the Huanghai factory and prepare to transform a production line for research and development of new energy buses. There are no plans to expand production at the moment, as Wei Lai simply does not have much energy at the moment."

The Beicang plant's production capacity of 25 vehicles can last for at least several years, so there is really no need for blind expansion.

Furthermore, the way things are done in Jiangsu Province is different from that in Zhejiang Province. The incident of the "Yaxing Bus" in Shoumacheng a few years ago is still fresh in our minds.

The shares of Yaxing Bus, which were acquired for over 4 million yuan, were taken back by GZW (a subsidiary of Shouma City) for 1.65 million yuan in less than three years. At that time, Yaxing's share price was 5.91 yuan, while the acquisition price was only 1.431 yuan, which was far below the market price.

Two days before the acquisition, the actual controller of Yaxing was arrested on charges of falsifying financial statements, making false capital contributions, and misappropriating assets.

Isn't that a coincidence?
The market environment is complex, and Tan Jincheng cannot stop investing in a certain place because of this. He still has to make the money he should make, but he doesn't want to maintain too much contact. These days, the name of foreign capital is useful. He can use the name of the Mitsubishi joint venture factory to make a big splash, but it may not be useful in the future.

Maintaining cooperation while keeping a distance is Tan Jincheng's current attitude.

"Okay, then I won't bother you any longer, Mr. Tan. I'll go back and report first."

There's not much potential in new energy vehicles for the time being, so the person in charge has lost interest. Boss Tan prefers to cooperate with local government financing vehicles, a fact that is well known to many local governments.

I thought Wei Lai was here to expand production in Changzhou, so the city investment company could take the opportunity to discuss equity investment.

Chuzhou City Investment's experience is the envy of many local city investment companies. It acquired 10% of Weilai's shares for only 6000 million yuan. In less than a year, Weilai, which was valued at 6 million yuan at the time, is now worth at least 15 billion yuan.

They just got incredibly lucky.

Zhang Yong went directly from Changzhou to Guangzhou, while Tan Jincheng went back to Beicang first.

The Guangzhou Auto Show will run from Tuesday, November 24th to the 30th of this month, lasting for a week.

However, you need to go at least two days in advance, as the 23rd is Media Day, which is a very important promotional channel for major manufacturers.

Pazhou International Convention and Exhibition Center.

As the year-end highlight of the domestic automotive industry in 2009, the Guangzhou Auto Show, themed "Technological Trends and New Lifestyles," attracted a total of 70 vehicle manufacturers and more than 600 auto parts and accessories manufacturers.

"Wow, so many people. I wonder how many of them actually bought tickets to get in."

When Tan Jincheng, wearing his work badge, entered the venue, there were already many people there. He arrived on the 24th, but missed the media day on the 23rd due to scheduling conflicts. Zhang Yong was in charge of the media day's publicity.

Tickets are 60 yuan for professional visitors and 40 yuan for the general public. I heard that hundreds of thousands of people will visit this auto show. If everyone buys a ticket to enter, the company will make a fortune.

"That's right. I heard there were more than 70 new car launches; by the way, your Yuechi is included too. There were more than 50 press conferences yesterday, and the reporters were extremely busy."

"Wouldn't that mean you'd strike it rich?"

"You're really shameless, saying anything you want, but it's true, haha."

Entering the venue alongside Tan Jincheng was Boss Ding. Pig Farm is considered a local enterprise in Guangzhou. Boss Ding happened to be working in Guangzhou recently, and Pig Farm also had a large team covering this auto show.

Before Tan Jincheng came to Guangzhou, Boss Ding called him on a whim.

"Your home is in Hall 2, but how about we start from Hall 1 first?"

"Okay, it seems like Hall 1 is full of joint venture brands, right? Let's see what new models they've launched."

Tan Jincheng had seen the layout of this auto show. Hall 1 mainly featured joint venture brands including Volkswagen, Citroën, and Skoda, showcasing most of the best-selling sedan models on the market.

The second exhibition hall, where Wei Lai was located, concentrated most of the domestic brands, including BYD, Geely, FAW Bestune, Changan Automobile, and so on.

Besides Geely, another of Weilai Auto's two neighbors is its old friend Changfeng Motors.

Changfeng Motors' booth was very small, with only four models: Cheetah Black King Kong, Feiteng, CS6, and CS7. It looked very shabby. Last year, they had a Pajero to display, but this year the Pajero no longer belongs to them.

Conversely, his neighbor, the newly popular Weilai Auto, although it also doesn't have many models, has a very large booth area. The Yuechi A1, which made its official debut at the auto show for the first time, was also rated by the media as one of the most anticipated models at this Guangzhou Auto Show.

Li Jianxin, who came all the way to attend the auto show, chatted with Zhang Yong while looking at the large Weilai exhibition area, feeling that things had changed.

(End of this chapter)