2003: Starting with Foreign Trade

Chapter 783 Wei Lai's Million-Unit Production Capacity Plan

"Can you sell 30 vehicles this year?"

The boatman's question was met with eager anticipation from the Beicang District leaders who were accompanying him on the visit.

Tan Jincheng thought for a moment and said, "Let's look at the sales figures for the past two months. If there haven't been any changes in the past two months, it should be about the same."

It's obvious that the boatman was asking about the total sales of all models. Sales in November and December generally decline gradually. In addition, pickup truck sales are generally low at the end of the year, and few consumers buy a pickup truck for the Chinese New Year.

As for buses, these orders are very stable, and they are all placed through a pre-order system. Basically, the amount ordered at the beginning of the year is what it is, and the growth in the middle of the year is very limited.

The actual total should definitely exceed 30 vehicles, but we can't be too sure. The leaders accompanying us are watching with bated breath, and it would be embarrassing if we didn't reach that number.

The boatman glanced at the people around him without making it obvious, and couldn't help but exclaim, "Wow, your sales figures are comparable to Audi's."

He didn't say the other half of what he meant: the gap between them and BYD is only about 10 vehicles. BYD's sales target for this year is 45 vehicles.

Given Tan Jincheng's substantial investment, the Yuechi A3, launched this year, is an outstanding performer as a competitor to the S6 in the same class.

If BYD doesn't seek a breakthrough at this rate, it won't be long before Weilai's sales catch up with BYD's.

Furthermore, we cannot ignore their growing market share in the pickup truck market, and the Tank 300, released this year, is also a highly anticipated new product.

If other OEMs were to enter a niche market, other competitors might not need to pay much attention. However, there are currently two domestic companies that are doing exceptionally well in this niche market, one of which is the emerging car company, Weilai.

These niche markets don't have much competition with BYD, but what makes Boatman Brother most wary are the two new energy vehicles under the Weilai brand. Currently, Weilai's sales of new energy vehicles are not the best, but in terms of reputation, Weilai is definitely number one.

A compact car and a mid-size SUV, the ES6 boasts a novel design language, high-quality materials, and a well-made interior. Most importantly, it showcases many technologies and even marketing strategies that are ahead of its competitors.

Before the ES6 officially went on sale, who would have thought that cars could be sold through a mobile app? This perfect integration with the internet gives Weilai a significant inherent advantage in the internet field.

As for the technology, electric vehicles are not exactly new. The key is technological breakthroughs, and creating some new and innovative technologies.

This is what makes Wei Lai so terrifying: he has the technology, he's good at marketing, and crucially, he has marketing resources.

Looking around, the marketing strategies of the entire domestic automotive industry in the past have been to combine advertising and cooperation with the media. Who would have thought that this guy would directly buy media shares?

He truly put the "Internet thinking" that CEOs of Internet companies often talk about into practice.

This is definitely one of BYD's most important competitors in the future.

"No way, our profits can't compare to Audi's. We still have a long way to go."

With annual sales of 30 vehicles, it is indeed possible to compete with second-tier imported brands such as Audi, Suzuki, and Skoda. However, Tan Jincheng is not so exaggerated as to want to compete with them on profit. How much does an Audi cost, and how much does an A1 cost?

"Don't be modest. You've done a great job controlling costs. Not making money now doesn't mean you won't make money in the future."

Every company analyzes and dissects its competitors, and so does Wanda. They talk a big game about marketing and promotion, but there are no secrets among their peers.

Thanks to the strong industrial chain structure of the Yangtze River Delta, as well as the support of major labor-importing provinces such as Anhui and Henan, Weilai Automobile has done a really good job in cost control. Its core component companies are either self-operated or joint ventures.

In addition, and most importantly, Tan Jincheng has money in his pocket, and can pay in cash with a payment period of up to 60 days. This alone makes many supply chain companies eager to cooperate with Wei, and they can also produce according to the quality requirements given by Wei.

"It's still early. We have a lot to do. Let's take it slow."

If a car company can control costs well and produce cars with a profit margin, then there is no problem. Why did Tesla's electric sports cars sell so easily, but were prepared to be discontinued after only a few years? It's simply because they failed to control costs.

Any product, as long as its gross profit margin is positive, can make money after its sales volume reaches a certain threshold. Many companies have very low gross profit and net profit, but they can still make a fortune.

The reason why the Aion S and ES6 are not profitable now is simply because of insufficient sales. However, currently all new energy vehicles are not profitable; they are just losing money to gain publicity.

In comparison, the profit margin of the Yuechi A1 is quite considerable.

With only one day to spare, the boatman gave a whirlwind tour of Wei Lai’s factory and research institute in Beicang. In the research institute, he also saw many of his former subordinates, some of whom he even recognized.

This left the boatman feeling depressed for quite a while. Although BYD has been struggling in the past two years due to its contraction, it is still the leading domestic independent brand.

This year, Chery's sales should be able to take the lead among domestic independent brands. However, Chery seems to lack a certain quality, the kind of quality that makes people genuinely believe that it is the leader.

In terms of innovation, technology investment and research, and sales volume, Chery is no worse than BYD. This may be largely due to the personality of the company's founder.

Take Weilai Auto as an example; Jin Cheng's personal temperament determines the temperament of this emerging company.

Young, energetic, and full of vitality, and daring to fight, this is evident in both the large sums of money invested and the novel appearance of the cars. We are determined to be a different kind of car company.

The boatman's temperament determines BYD's style, and coupled with its rapid growth over the years, it has reinforced the impression that BYD is the leader among independent brands.

Although it doesn't have the same social status as it did during the boom of new energy, the fact that the CEO of BYD, a leading domestic independent brand, personally visited Beicang still caused quite a stir.

The boatman was coming, and Tan Jincheng definitely informed him in advance. Unlike last time when Little Ma and Lei Jun came, he was not so low-key and notified the district immediately.

"Beicang District is not large, but it is quite convenient for us to invest in and build factories. We welcome Mr. Wang to come and visit us."

The speaker was the district's top leader. At the welcome banquet, the leader adopted a very humble attitude, rising to raise his glass to toast Boss Wang while saying kind words. He said that no matter where a company like BYD sets up a factory, the local government would welcome it.

With the Golden Phoenix project in Weilai, the focus of Beicang District is definitely on Weilai. However, the district is naturally happy to attract more car companies and investors to build factories in Beicang District in order to support the Golden Phoenix project.

Dizi's treatment was average, and his image among migrant workers was somewhat poor, but he was very popular with the local government, and in some ways even more popular than Wei.

The fact that Wei Lai offers such good benefits will greatly influence other companies. Not all bosses are willing to follow the trend and increase employee benefits, or rather, most bosses are like that.

Whether to choose one or a group depends on the local government's choice, depending on the environment and economic situation.

"Yes, as you just saw, Meishan Island and Chunxiao Street here are quite suitable for building a car factory. They are not far from the port and the city center, and land acquisition is not too troublesome. Uncle, if you intend to expand the factory in the future, you can consider our Beicang."

Tan Jincheng was a lobbyist; there was no other way, some things had to be done. Besides, it would be a common practice for car companies to form alliances to build factories in the future.

In his previous life, Luzhou had attracted many car manufacturers, including BYD, JAC, Weilai, and Volkswagen, which complemented each other's resources. Tan Jincheng did not mind other OEMs setting up shop in Beicang.

He was happy to be asked to act as a lobbyist by the Beicang District.

The boatman glanced at Tan Jincheng with some surprise. Apart from big cities, people are still used to the "one city, one car" strategy these days. He didn't understand why this kid would act as an advocate for the local government. Wasn't he afraid of taking away resources?
However, to be fair, although Beicang District is not large, these islands are indeed, as he said, very suitable for car factories. The land is cheap, the government is open-minded, transportation is convenient, and the industrial chain is complete.

However, BYD currently has no plans to build a new factory. They already have vehicle production bases in Changan, Shenzhen, and Xiangcheng, with the Xiangcheng base commencing production in 2009.

The planned annual production capacity is 30 vehicles, the same as the Changan production base. The headquarters Shenzhen production base has a capacity of 35 vehicles. The current capacity of 95 vehicles is more than enough, and even somewhat excessive.

“That’s easy to arrange. I’ll send a team over to investigate later. I’ll trouble you to remember to take them along, Mr. Tan.”

Tan Jincheng politely addressed him as "Uncle," but he couldn't be too casual in formal settings. As for not having plans to build a factory, that didn't matter; setting up a parts company wouldn't be a problem.

The automotive industry chain in the Yangtze River Delta region is indeed becoming increasingly diversified, and we should consider expanding into this area in the future.

Speaking of which, Weilai Automobile now has four major vehicle production bases. The Xiangcheng production base, which was acquired earliest, has an annual production capacity of 5 vehicles and has not been expanded. It mainly produces some diesel Yuechi A1 models and Pajero models left over from the past.

The Pajero doesn't sell many units a year. Now that the model range is becoming more diverse, Tan Jincheng doesn't plan to continue making it and intends to return it to Mitsubishi. The freed-up production capacity will be used to fill the increasing sales gap of the Yuechi A1.

The unassuming Changzhou production base is mainly used to produce buses and other niche models such as forklifts. The forklift business is something they learned from BYD. It's not very profitable, but it meets their own needs. As for production capacity, it's also 5 vehicles.

The Beicang headquarters is the production base that Tan Jincheng values ​​most. It has been gradually put into operation since 2008 and currently has a capacity of 25 vehicles. With the addition of the newly acquired Chunxiao factory with an annual capacity of 20 vehicles, the total annual capacity is 45 vehicles.

The planned annual production capacity of the Beicang production base is 75 vehicles.

As for Luzhou and Chuzhou, since they are relatively close to each other, the Weilai Group has combined and planned them together, and they are also very important.

These two locations bring together Weilai's lithium battery production base, engine plant, pickup truck production base, and new energy vehicle plant, with a planned production capacity of 20 vehicles in the first phase.

If the group's production capacity changes in the future, the adjustments will mainly revolve around these two locations.

Of course, all of this will take time, and it mainly depends on the changes in car sales next year. If the annual sales of BYD can reach the expected 40 vehicles next year, then it is possible to make a production capacity plan of one million vehicles, just like BYD. BYD's plan to reach one million vehicles took seven years, starting from 2003, but it seems to have taken 20 years to actually achieve annual sales of one million vehicles.

Weilai will not be as aggressive as BYD, but its future plans will also be less conservative than before, maintaining annual sales of around 40 to 50 vehicles and planning to increase production capacity to over 80 vehicles.

Be tactically conservative, but have a long-term strategic vision.

Sure enough, people's ambitions are amplified step by step. When Weilai Auto was first established, Tan Jincheng's idea was to maintain sales of 100,000 to 200,000 vehicles a year until 2015.

That's no longer possible.

When did you first set your sights on a production capacity of one million units?

It seems that starting this year, the Yuechi A3 unexpectedly showed the potential to become a blockbuster. In addition, the Yuechi A1 is still very popular after its redesign. What surprised him the most was the ES6, which is completely driven by the terminal sales route.

At the beginning of the launch, Tan Jincheng was even prepared to be ridiculed by various media by the end of the year, just to see if there was a market for high-end electric vehicles that were truly sold purely at the terminal level in this era.

In his impression, although there are no shortage of enthusiasts or groups who like to try new things, there shouldn't be many electric vehicles these days, especially mid-size SUVs like the ES6 which are priced higher.

Who would have thought that this group was actually quite large?

Goodness, a few years ago, selling one or two thousand gasoline-powered mid-size SUVs was considered a good result.

In November, a total of 217 Weilai ES6s were sold, bringing the total annual sales to 2083. In December, another 221 ES6s were sold, bringing the total annual sales to 2304.
This sales volume is enough to put us in the top four for the year!

Among the top three, Weilai Auto still has a presence, with the Aion S ranking third with sales of 2377 units. As for the first and second places, they are occupied by Chery's QQ3 EV and JAC's Aiyi, respectively.

The sales volumes for the two companies were 5305 and 2485 units, respectively.

"I'm a little regretful. I should have followed the same path as you with our E6, focusing solely on end-user sales. In fact, we benefited from the success of your ES6 in the last two months. I really didn't expect the electric vehicle market to be so successful."

I only learned about this data after New Year's Day 2013.

Boatman, who was attending the annual meeting of entrepreneurs in the automotive industry, met Tan Jincheng again and made this remark as soon as they met.

The BYD E6, launched in collaboration with the Shenzhen Public Security Bureau, did benefit from the popularity of the Weilai ES6 in the last few months. The Weilai ES6 remained popular, which in turn boosted the sales of the BYD E6, which is priced similarly.

With sales of 2091 units, it ranked fifth in new energy vehicle sales.

Just like in the stock market, the leading stock drives the concept effect, and those who can't buy the leading stock will look at other stocks in the concept.

Like Wei Lai, they also ranked sixth, with BYD Qin selling 1977 units.

The top six are the only new energy vehicles with decent sales figures. The seventh-ranked Zhongtai sold 845 units, while the eighth-ranked BAIC 150 only sold 644 units.

As for sales starting from ninth place, there was another precipitous drop, from 240 to 100, or even just over 10. In total, only 1421 vehicles were sold (excluding Tesla sports cars, which are imported models).

In the inaugural year of new energy vehicles, the camps were clearly divided, and it was obvious who was strong and who was weak.

"If you're saying I'm benefiting from this, you're flattering me too much. But this year's market really didn't go as planned. It's not wrong for your E6 to cooperate with the government. I just wanted to test the power of the terminal market. I was prepared to be laughed at."

A total of 19629 new energy vehicles were sold throughout the year, an increase of 240.58% compared to last year, which was completely unexpected by the entire automotive industry and even the general public.

Of these, 17455 were pure electric vehicles and 2174 were hybrid vehicles.

Surprisingly, despite the media's constant hype about range anxiety, pure electric vehicles were the most popular during the early days of electric vehicles.

Who knows what happened during the subsidy fraud process in the previous life, leading to everyone developing hybrid and range-extended electric vehicles later on.

Tesla vehicles are all pure electric cars, which is why they sell so well all over the world.

"Don't be too modest in private conversations. Speaking of which, the industry unanimously agrees that the electric vehicle market has seen such great changes this year thanks to your efforts. Your high-quality models and innovative marketing methods have played a significant role."

The boatman patted Tan Jincheng on the shoulder and then laughed, "Speaking of which, we're also planning to make an app, but we really can't make it as perfect as yours. If you need any guidance, please give us some pointers."

When it comes to developing car-related apps, I have to admit that Wei Lai completely outclasses all its competitors in the industry. This is something you can't just do by poaching a few engineers from within the industry.

At first, everyone really oversimplified things, including them.

This led to a significant increase in the collective wealth of the Weilai APP team members, making it possible to poach even a junior programmer from them at a high price.

BYD poached several players, but the results they achieved were disappointing.

At this point, Brother Boatman finally understood the rumors circulating in the internet industry about Tan Jincheng; he really was an excellent product manager.

"Haha, that's easy to say. Uncle, you can entrust our team with the development, just don't try to poach our people from behind our backs anymore. It's not that I'm stingy, but this team is quite rare in the automotive industry right now. Only by working together can we have a future."

If you ask Zhang Yong what caused him the most headache in the third quarter, it would be that Weilai APP was poached by various parties, including Dizi, Chery, and some foreign brands.

Fortunately, his boss had reminded him when the app first became a hit that key members of the team all had stock options.

At the time, he felt that his boss was making a mountain out of a molehill, and that the stock options were being given out too easily.

"Don't even mention it. They're useless. If you don't mind, you can let them go back."

The boatman wasn't embarrassed at all. This kind of thing has become too common in recent years. Just don't go too far. There are quite a few people who switch jobs and then come back.

"Haha, I'm fine with either way, it's up to them."

Tan Jincheng casually mentioned that when Zhang Yong questioned whether he had given out the stock options too easily, he had told Zhang Yong that the process of starting a business is basically a process of realizing a dream.

If you want more and more outstanding people to work for your dreams, you can't be stingy. Besides money, what is the most attractive thing for talent?
It's all about equity and stock options. These days, it's almost impossible for a founder to have sole ownership of a company and still build a successful business.

Why did the "wolf culture" at Chrysanthemum Factory succeed? It's because they actually fed the wolves meat. Without so much internal equity distributed, who the hell would work overtime so hard for you?

"Haha, then I'll go with them. If they really want to go back to your place, I definitely won't stop them."

Tan Jincheng pursed his lips and didn't say anything. It was possible to poach talent, and there would definitely be people who were tempted, but could the working environment in Weilai be compared to that of ordinary companies?

The management of traditional car companies, compared to the management of Wei Lai, who has been taught by Tan Jincheng to have an internet mindset and a user-centric mindset, are really not good enough in terms of product development and actual management capabilities.

Wei Lai wasn't without overtime work, and there were unfair aspects to his work as well, but when you think about his work environment and benefits, even the employees who left couldn't say anything.

"By the way, judging from this year's growth rate, we'll have a lot more competitors next year. Are you confident?"

The combined sales of Weilai's two new energy vehicles don't even match those of Chery's single vehicle, but no one would argue that Chery holds a more prestigious position in the new energy vehicle market than Weilai, at least for now.

The media didn't mention the QQ3 EV either, but instead kept comparing it with BYD and Weihai, as these two companies coincidentally launched two models in the same price range to directly compete with each other.

Despite the seemingly harmonious relationship between Mr. Wang and Mr. Tan on the surface, which might even make them appear like uncle and nephew to those unfamiliar with the business, their marketing strategies are fiercely competitive, bringing a lot of excitement to the otherwise quiet new energy vehicle sector.

The E6 and ES6 even have similar names. One is an MPV and the other is an SUV. Apart from their similar prices, they don't have any direct competition. It's just that there are no other models on the market.

However, the Aion S and BYD Qin are different. They are both A-class cars at the same price point, and their consumers completely overlap, whether they are purchased through the procurement channel or sold directly to end consumers!
It now appears that Aion S has a slight advantage, and what Boatman said can be interpreted as a challenge to Tan Jincheng.

"Haha, who knows? But the market is definitely growing, and I'm not afraid."

On January 4, a large area of ​​central and eastern China experienced smog, with PM2.5 levels in many places reaching "extremely high" levels.

The gray sky reminded Tan Jincheng that the era of the most serious discussions on environmental issues in history had arrived, which had created an environment for the rapid expansion of new energy vehicles.
With all the positive developments coming our way, why fear competition?

"Haha, you're awesome, kid."

It was originally just a little joke during the party, but Tan Jincheng's confident demeanor really ignited the boatman's fighting spirit.

Good grief, I've been in the car business for so many years, do you think I'm afraid of a young upstart like you?
(End of this chapter)